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PRICING SUPPLEMENT NO. 5 DATED JANUARY 8, 1998 RULE 424(b)(3)
FILE NO. 33-55953
(TO PROSPECTUS DATED MAY 24, 1995 AND
PROSPECTUS SUPPLEMENT DATED JUNE 27, 1995)
AVCO FINANCIAL SERVICES, INC.
MEDIUM-TERM NOTES, SERIES G
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<TABLE>
<S> <C>
Trade Date: January 8, 1998 Interest Rate: Prior to January 23, 2001 - 5.75%.
Original Issue Date: January 23, 1998 On and after January 23, 2001, as
Principal Amount: $200,000,000 described on the Attachment under
"Interest Rate and Interest Payment Dates"
Issue Price: 99.796% Form: [X] Book-Entry [ ] Certificated
Maturity Date: January 23, 2006, subject Interest Payment
to mandatory repayment of principal to Dates: January 23 and July 23 of
existing holders pursuant to the Call each year, commencing July 23, 1998
Option and Put Option described on
the Additional Terms Attachment to this
Pricing Supplement (the "Attachment")
CUSIP No.: 05353CCB9
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Call Option: Repayment/Put Option:
The Notes may be called by the The Notes may be repaid pursuant to the
Callholders prior to maturity, as Put Option prior to maturity as described on
described on the Attachment under "Call the Attachment under "Call Option; Put
Option; Put Option" Option"
Original Issue Discount Note: / / Yes /X/ No
</TABLE>
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Agents: Morgan Stanley & Co. Incorporated
UBS Securities LLC
Citicorp Securities, Inc.
Agent acting in the capacity as indicated below:
/ / Agent /X/ Principal
If as principal:
/ / The Notes are being offered at varying prices related to
prevailing market prices at the time of resale.
/X/ The Notes are being offered at a fixed initial public offering
price of 99.796% of principal amount. See under "Underwriting"
on the Attachment
On January 8, 1998, the Company increased the authorized amount of Medium-Term
Notes, Series G, from $700,000,000 to $1,100,000,000 (based upon the aggregate
initial public offering price or purchase price and subject to further increase
from time to time to such larger amount as may be authorized by the Company),
of which an aggregate of $700,000,000 of such Notes has been issued prior to
the date of this Pricing Supplement.
Other Provisions: See the Attachment
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
NOTES. SUCH TRANSACTIONS MAY INCLUDE THE PURCHASE OF NOTES TO STABILIZE THEIR
PRICE, THE PURCHASE OF NOTES TO COVER SYNDICATE SHORT POSITIONS AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
ADDITIONAL TERMS ATTACHMENT
This Additional Terms Attachment constitutes a part of Pricing
Supplement No. 5 dated January 8, 1998 of Avco Financial Services, Inc. and
contains a description of additional terms and provisions applicable to the
tranche of Medium-Term Notes, Series G (the "Notes"). The Notes are described
in the Prospectus and the Prospectus Supplement for the Medium-Term Notes,
Series G, referenced above, and reference is made thereto for a detailed
summary of additional provisions of the Notes. The Notes are Fixed Rate Notes
as described in the Prospectus Supplement, subject to and as modified by the
Coupon Reset Process and other provisions described below. The description of
the particular terms of the Notes set forth in this Pricing Supplement
supplements, and to the extent inconsistent therewith replaces, the description
of the terms and provisions of the "Debt Securities" in the Prospectus and the
"Notes" in the Prospectus Supplement. Capitalized terms used but undefined
herein shall have the meanings given such terms in such Prospectus and
Prospectus Supplement.
SUPPLEMENTAL DESCRIPTION OF THE NOTES
INTEREST RATE AND INTEREST PAYMENT DATES
The Notes will bear interest at the rate of 5.75% from January 23, 1998
to but excluding January 23, 2001 (the "Coupon Reset Date"). Interest on the
Notes is payable semi-annually on January 23 and July 23 of each year,
commencing July 23, 1998 (each an "Interest Payment Date"). Interest will be
calculated based on a 360 day year consisting of twelve 30 day months. On each
Interest Payment Date, interest shall be payable to the persons in whose name
the Notes are registered on the fifteenth calendar day (whether or not a
Business Day) immediately preceding the related Interest Payment Date (a
"Record Date"). If a Callholder (as defined below) elects to purchase an
applicable principal amount of Notes pursuant to its Call Option, the
Calculation Agent (as defined below) will reset the interest rate effective on
the Coupon Reset Date for such Notes, pursuant to the Coupon Reset Process
described below. In such circumstance, (i) the applicable principal amount of
Notes will be purchased by such Callholder at 100% of the principal amount
thereof on the Coupon Reset Date, on the terms and subject to the conditions
described herein (interest accrued to but excluding the Coupon Reset Date will
be paid by the Company on such date to the holders on the most recent Record
Date), and (ii) on and after the Coupon Reset Date, such Notes will bear
interest at the rate determined by the Calculation Agent in accordance with the
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procedures set forth under "--Coupon Reset Process if Notes are Called" below.
"Business Day" means any day other than a Saturday, a Sunday or a day on which
banking institutions in The City of New York are authorized or required by law
or regulation to be closed.
MATURITY DATE
The Notes will mature on January 23, 2006 (the "Maturity Date"). On
January 23, 2001, holders of the Notes will be entitled to receive 100% of the
principal amount thereof from (i) a Callholder, if such Callholder purchases an
applicable principal amount of Notes pursuant to its Call Option or (ii) the
Company, by exercise of the Put Option by the Trustee for and on behalf of the
holders of the remaining Notes, if the Callholder does not purchase such Notes
pursuant to the Call Option. If the Call Option is not exercised or the Call
Price is not paid, the Trustee is required to exercise the Put Option without
the consent of, or notice to, the holders of the Notes. See "--Call Option; Put
Option."
FOR PERSONS HOLDING THE NOTES (OR AN INTEREST THEREIN) ON OR PRIOR TO
JANUARY 23, 2001, THE EFFECT OF THE OPERATION OF THE CALL OPTION AND PUT OPTION
WILL BE THAT SUCH HOLDERS WILL RECEIVE 100% OF THE PRINCIPAL AMOUNT OF SUCH
NOTES ON JANUARY 23, 2001.
CALL OPTION; PUT OPTION
(i) Call Options. The "Callholder" will be Morgan Stanley & Co.
Incorporated with respect to $125,000,000 principal amount of the Notes and
will be Union Bank of Switzerland, London Branch, with respect to $75,000,000
principal amount of the Notes. Pursuant to the terms of the Notes, each
Callholder, by giving notice to the Trustee (a "Call Notice") has the right to
purchase the applicable principal amount of Notes, such applicable principal
amount to be purchased in whole but not in part by such Callholder, on the
Coupon Reset Date (a "Call Option"), at a price equal to 100% of the principal
amount thereof (a "Call Price") (interest accrued to but excluding the Coupon
Reset Date to be paid by the Company on such date to the holders on the most
recent Record Date). Such Call Notice shall be given to the Trustee, in
writing, prior to 4:00 p.m., New York time, no later than fifteen calendar days
prior to the Coupon Reset Date for the Notes.
In the event a Callholder exercises its rights under the Call Option,
unless terminated in accordance with its terms, (i) not later than 2:00 p.m.,
New York time on the Business Day prior to the Coupon Reset Date, such
Callholder shall deliver the Call Price in immediately available funds to the
Trustee for payment of the Call Price on the Coupon Reset Date and (ii) the
holders of the applicable principal amount of Notes will be required to deliver
and will be deemed to have delivered such Notes to the applicable Callholder
against payment therefor on the Coupon Reset Date through the facilities of the
Depositary. In the event that less than all the Notes are subject to the
exercise of the Call Option, thereupon the Trustee shall select, by lot, or in
any manner it shall deem fair, the Notes to be so called. No holder of any
Notes or any interest therein shall have any right or claim against a
Callholder as a result of such Callholder purchasing or not purchasing the
Notes.
Each Call Option with respect to an aggregate principal amount of Notes
provides for certain circumstances under which such Call Option may be
terminated. If a Call Option terminates or if the applicable Callholder fails to
pay the Call Price to the Trustee at or prior to the required time, the
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Trustee shall exercise the Put Option described below. The Trustee shall send
notice to the holders that it is exercising the Put Option as required by the
Note.
(ii) Put Option. If the applicable Callholder does not exercise its
Call Option or fails for any reason to purchase the applicable principal amount
of Notes on the Coupon Reset Date, the Trustee will be obligated to exercise
the right of the holders of such Notes to require the Company to purchase such
Notes, in whole but not in part (a "Put Option"), on the Coupon Reset Date at a
price equal to 100% of the principal amount thereof (a "Put Price"), plus
accrued but unpaid interest to but excluding such Coupon Reset Date in each
case, to be paid by the Company to the holders on the Coupon Reset Date. If the
Trustee exercises the Put Option then the Company shall deliver the Put Price
in immediately available funds to the Trustee by no later than 12:00 p.m. New
York time on the Coupon Reset Date and the holders of the Notes will be
required to deliver and will be deemed to have delivered the Notes to the
Company against payment therefor on the Coupon Reset Date through the
facilities of the Depositary. By its purchase of Notes, each holder irrevocably
agrees that the Trustee shall exercise the Put Option relating to such Notes
for or on behalf of such Notes as provided herein. No holder of any Notes or
any interest therein has the right to consent or object to the exercise of the
Trustee's duties under the Put Option.
The transactions described above will be executed on the Coupon Reset
Date through the Depositary in accordance with the procedures of the
Depositary, and the accounts of participants will be debited and credited and
the Notes delivered by book-entry as necessary to effect the purchases and
sales thereof. For further information with respect to the transfers and
settlement through the Depositary, see "Description of the Notes--Book-Entry
Notes" in the above-referenced Prospectus Supplement.
COUPON RESET PROCESS IF NOTES ARE CALLED
The following discussion describes the steps to be taken in order to
determine the interest rate to be paid on Notes to new holders on and after
the Coupon Reset Date in the event the Call Option has been exercised with
respect to such Notes.
Under the Notes and pursuant to a Calculation Agency Agreement, Morgan
Stanley & Co. Incorporated has been appointed the calculation agent for Notes
subject to its Call Option and Union Bank of Switzerland, London Branch, has
been appointed the calculation agent for Notes subject to its Call Option (in
such capacity as calculation agent, each a "Calculation Agent"); provided, that
such Calculation Agents shall act jointly on all matters in the event that
both Callholders exercise their Call Options and the entire principal amount of
the Notes are so called. If a Callholder for the applicable principal amount
of Notes has exercised the Call Option as set forth above under "Call Option;
Put Option", then the following steps (the "Coupon Reset Process") shall be
taken in order to determine the interest rate to be paid on such Notes from and
including such Coupon Reset Date to the Maturity Date. The Company and the
applicable Calculation Agent shall use reasonable efforts to cause the actions
contemplated below to be completed in as timely a manner as possible.
(a) The Company shall provide the applicable Calculation Agent
with a list (the "Dealer List"), no later than seven Business Days prior
to the Coupon Reset Date, containing the names and addresses of five
dealers, one of which shall be Morgan Stanley & Co.
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Incorporated in the event it exercises its Call Option and one of which
shall be UBS Securities LLC in the event Union Bank of Switzerland,
London Branch, exercises its Call Option, from which the Company desires
the applicable Calculation Agent to obtain the Bids (as defined below)
for the purchase of such Notes.
(b) Within one Business Day following receipt by the Calculation
Agent of the Dealer List, the applicable Calculation Agent shall provide
to each dealer ("Dealer") on the Dealer List (i) a copy of the Pricing
Supplement No. 5 dated January 8, 1998, together with the Prospectus
Supplement dated June 27, 1995 and Prospectus dated May 24, 1995,
relating to the offering of the Notes (collectively, the "Pricing
Supplement"), (ii) a copy of the form of Notes and (iii) a written
request that each such dealer submit a Bid to the Calculation Agent by
12:00 noon, New York time, on the third Business Day prior to the Coupon
Reset Date (the "Bid Date"). "Bid" shall mean an irrevocable written
offer given by a Dealer for the purchase of all of the Notes subject to
the exercise of the Call Option, settling on the Coupon Reset Date, and
shall be quoted by such Dealer as a stated yield to maturity on Notes
("Yield to Maturity"). Each Dealer shall also be provided with (i) the
name of the Company, (ii) an estimate of the Purchase Price (which shall
be stated as a US Dollar amount and be calculated by the Calculation
Agent in accordance with clause (c) below), (iii) the principal amount
of the Notes subject to the exercise of the Call Option and maturity of
such Notes and (iv) the method by which interest will be calculated on
such Notes.
(c) The purchase price to be paid by any Dealer for the Notes
subject to the exercise of the Call Option (the "Purchase Price") shall
be equal to (i) the principal amount of the Note subject to the exercise
of the Call Option, plus (ii) a premium (the "Notes Premium") which
shall be equal to the excess, if any, of (A) the discounted present
value to the Coupon Reset Date of a bond with a maturity of January 23,
2006 which has an interest rate of 5.45%, semi-annual interest payments
on each January 23 and July 23, commencing July 23, 2001, and a
principal amount equal to the principal amount of Notes subject to the
exercise of the Call Option, and assuming a discount rate equal to the
Treasury Rate over (B) such principal amount of Notes. The "Treasury
Rate" means the per annum rate equal to the offer side yield to maturity
of the current on-the-run five-year United States Treasury Security per
Telerate page 500 at 11:00 a.m., New York time on the Bid Date (or such
other date that may be agreed upon by the Company and the applicable
Calculation Agent) or, if such rate does not appear on Telerate page 500
at such time, the rates on GovPx End-of-Day Pricing at 3:00 p.m., New
York time on the Bid Date.
(d) The applicable Calculation Agent shall provide written
notice to the Company by 12:00 p.m., New York time on the Bid Date,
setting forth (i) the names of each of the Dealers from whom such
Calculation Agent received Bids on the Bid Date, (ii) the Bid submitted
by each such Dealer and (iii) the Purchase Price as determined pursuant
to paragraph (c) hereof. Except as provided below, the applicable
Calculation Agent shall thereafter select from the Bids received the Bid
with the lowest Yield to Maturity (the "Selected Bid") and set the
Coupon Reset Rate equal to the interest rate which would amortize the
Notes Premium fully over the term of the Notes at the Yield to Maturity
indicated by the Selected Bid; provided, however, that if such
Calculation Agent has not received a timely Bid from a Dealer on or
before the Bid Date, the Selected Bid shall be the lowest of all Bids
received by such time
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and; provided further that if any two or more of the lowest Bids
submitted are equivalent, the Company shall in its sole discretion
select any of such equivalent Bids (and such selected Bid shall be the
Selected Bid). The applicable Calculation Agent will notify the Dealer
that submitted the Selected Bid by 4:00 p.m., New York time on the Bid
Date.
(e) Immediately after calculating the Coupon Reset Rate for the
Notes subject to the exercise of the Call Option, the applicable
Calculation Agent shall provide written notice to the Company and the
Trustee, setting forth such Coupon Reset Rate. The Coupon Reset Rate for
such Notes will be effective from and including the Coupon Reset Date.
(f) The applicable Callholder shall sell such Notes to the
Dealer that made the Selected Bid at the Purchase Price; such sale to be
settled on the Coupon Reset Date in immediately available funds.
The Calculation Agency Agreement provides that the applicable
Calculation Agent for the Notes may resign at any time as Calculation Agent,
such resignation to be effective ten Business Days after the delivery to the
Company and the Trustee of notice of such resignation. In such case, the
Company may appoint a successor Calculation Agent for the applicable principal
amount of Notes.
Each Calculation Agent, in its individual capacity, may buy, sell, hold
and deal in the Notes and may exercise any vote or join in any action which any
holder of the Notes may be entitled to exercise or take as if it were not the
Calculation Agent. Each Calculation Agent, in its individual capacity, may also
engage in any transaction with the Company as if it were not the Calculation
Agent.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States Federal income tax
considerations relating to the purchase, ownership and disposition of the Notes
by an initial holder of the Notes who purchases the Notes on the Original
Issue Date. This summary is based upon laws, regulations, rulings and decisions
currently in effect, all of which are subject to change. The discussion does
not deal with all Federal tax considerations applicable to all categories of
investors, some of which may be subject to special rules. In addition, this
summary is limited to investors who will hold the Notes as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code").
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES RELATING TO THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES.
Prospective investors should note that no rulings have been or are
expected to be sought from the Internal Revenue Service (the "Service") with
respect to any of the Federal income tax considerations discussed below, and no
assurance can be given that the Service will not take contrary positions.
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TREATMENT OF NOTES
Although there is no authority on point characterizing instruments
such as the Notes, and the matter is not free from doubt, the Company believes
the Notes should be treated as fixed rate debt instruments that mature on the
Coupon Reset Date and the Company currently intends to so treat the Notes for
Federal income tax purposes. So viewed, each holder should include in gross
income the interest paid or accrued on the Notes in accordance with its usual
method of accounting. Upon the sale, exchange, redemption or other disposition
by a holder of Notes, the holder should recognize capital gain or loss equal to
the difference between the amount realized from the disposition of the Notes
(exclusive of amounts attributable to the payment of accrued interest not
previously included in income, which will be taxable as ordinary income) and
the holder's adjusted tax basis in the Notes at the time of the sale, exchange,
redemption or other disposition. A holder's adjusted tax basis in the Notes
generally will equal the holder's purchase price for such Notes. Pursuant to
recently enacted legislation, in the case of a holder who is an individual, any
capital gain recognized on the disposition of the Notes will generally be
subject to U.S. Federal income tax at a rate of (i) 20%, if the holder's
holding period in the Notes was more than 18 months at the time of such sale,
exchange, redemption or other disposition, or (ii) 28%, if the holder's holding
period in such Notes was more than one year, but not more than 18 months, at
the time of such sale, exchange, redemption, or other disposition. The ability
to use capital losses to offset ordinary income in determining taxable income
is generally limited.
It is possible that, the Notes could be treated by the Service or a
court as maturing on the Maturity Date rather than the Coupon Reset Date.
Because of the Coupon Reset Process, if the Notes were treated as maturing on
the Maturity Date, holders would be subject to certain Treasury Regulations
dealing with contingent payment debt instruments (the "Contingent Debt
Regulations"). Under the Contingent Debt Regulations, each holder would be
required (regardless of such holder's usual method of accounting) to include in
gross income original issue discount for each interest accrual period in an
amount equal to the product of the adjusted issue price of the Notes at the
beginning of each interest accrual period and a projected yield to maturity of
the Notes. The projected yield to maturity would be based on the "comparable
yield" (i.e., the yield at which the Company would issue a fixed rate debt
instrument maturing on the Maturity Date, with terms and conditions otherwise
similar to those of the Notes), which will be higher than the stated interest
rate on the Notes prior to the Coupon Reset Date. In addition, the character of
any gain or loss recognized on the sale, exchange, retirement or other
disposition of the Notes could differ from that set forth in the preceding
paragraph. For example, if the Contingent Debt Regulations applied, any gain
recognized on the sale of the Notes would be treated as interest income, while
any losses would generally be ordinary to the extent of previously accrued
original issue discount, and any excess would be capital loss. The ability to
use capital losses to offset ordinary income in determining taxable income is
generally limited.
FOREIGN HOLDERS OF NOTES
Interest paid to a holder that is not a United States person (a
"Foreign Holder") generally will not be subject to the 30% withholding tax
generally imposed with respect to U.S. source interest paid to such persons,
provided that such holder is not engaged in a trade or business in the United
States in connection with which it holds such Notes, does not bear certain
relations to the Company and
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fulfills certain certification requirements. Under such certification
requirements, the holder must certify, under penalties of perjury, that it is
not a "United States person" and is the beneficial owner of the Notes, and must
provide its name and address. For this purpose, "United States person" means a
citizen or resident of the United States, a corporation, partnership, or other
entity created or organized in or under the laws of the United States or any
State thereof (including the District of Columbia), an estate the income of
which is includible in gross income for United States Federal income tax
purposes, regardless of its source, or a trust subject to the primary
supervision of a court within the United States and the control of one or more
U.S. persons with respect to all substantial decisions.
A Foreign Holder generally will not be subject to Unites States Federal
income tax with respect to any gain recognized upon the disposition of Notes
unless (i) such gain is effectively connected with the conduct by the Foreign
Holder of a trade or business in the United States, (ii) in the case of any
individual holder, such Foreign Holder is present in the United States for 183
days or more in the taxable year during which the disposition occurs and certain
other conditions are met or (iii) the Notes are treated as subject to the
Contingent Debt Regulations and the holder fails to satisfy the certification
requirements of the preceding paragraph.
BACKUP WITHHOLDING
Payments made on the Notes and proceeds from the sale of Notes will not
be subject to a "backup" withholding tax of 31% unless, in general, the holder
fails to comply with certain reporting procedures and is not an exempt recipient
under applicable provisions of the Code.
Recently issued Treasury regulations (the "Final Withholding
Regulations"), which are generally effective with respect to payments made after
December 31, 1998, consolidate and modify the current certification requirements
and means by which holders may claim exemption from United States federal income
tax withholding on foreign persons and from backup withholding. Foreign Holders
claiming benefits under an income tax treaty may be required to obtain a
taxpayer identification number and to certify their eligibility under the
treaty's limitation of benefits article in order to comply with the Final
Withholding Regulations. Because the application of the Final Withholding
Regulations will vary depending upon a holder's particular circumstances, all
holders are urged to consult their own tax advisors regarding the application of
the Final Withholding Regulations to them.
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UNDERWRITING
Subject to the terms and conditions set forth in a Distribution
Agreement, as amended and supplemented by a Terms Agreement (collectively, the
"Distribution Agreement"), the Company has agreed to sell to each of the several
Agents named below, and each of the Agents has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
AGENT PRINCIPAL AMOUNT OF NOTES
<S> <C>
Morgan Stanley & Co. Incorporated ........ $75,000,000
UBS Securities LLC ....................... $75,000,000
Citicorp Securities, Inc. ............... $50,000,000
Total ............................ $200,000,000
============
</TABLE>
Under the terms of the Distribution Agreement, the Agents are committed
to take and pay for all of the Notes, if any are taken. The Distribution
Agreement provides that the obligations of the Agents are subject to, among
other things, the approval of certain legal matters by its counsel and to
certain other conditions.
The Company has been advised by the Agents that they propose to offer
the Notes directly to the public initially at the public offering price set
forth on the front cover page of this Pricing Supplement. After the initial
public offering of the Notes, the offering price and other selling terms may be
changed by the Agents.
The Company has been advised by the Agents that the Agents intend to
make a market in the Notes, but they are not obligated to do so and may
discontinue market-making at any time without notice.
The Company will indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or
contribute to payments the Agents may be required to make in respect thereof.
The Agents may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the Notes in accordance with Regulation M under the Securities Exchange Act of
1934, as amended. Over-allotment transactions involve syndicate sales in excess
of the offering size creating a syndicate short position. Stabilizing
transactions permit bids to purchase the Notes so long as the bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
Notes in the open market after the distribution has been completed in order to
cover syndicate short positions. Penalty bids permit the Agents to reclaim a
selling concession from a syndicate member when the Notes originally sold by
such syndicate member are purchased in a syndicate covering transaction. Such
over-allotment transactions, stabilizing transactions, syndicate covering
transactions and penalty bids may cause prices of the Notes to be higher than
they would otherwise be in the absence of
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such transactions. Neither the Company nor the Agents make any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Notes. In addition,
neither the Company nor the Agents make any representation that the Agents will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
In the ordinary course of their respective businesses, affiliates of
UBS Securities LLC and Citicorp Securities, Inc. have engaged, and may in the
future engage, in commercial banking transactions with the Company and
its affiliates.
The settlement date for the purchase of the Notes will be January 23,
1998, as agreed upon by the Company and the Agents pursuant to Rule 15c6-1
under the Exchange Act.
9
