<PAGE>
FILED PURSUANT TO RULE NO. 424(b)(5)
REGISTRATION NO. 333-9817
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 13, 1997
$500,000,000
SEARS ROEBUCK ACCEPTANCE CORP.
7% NOTES DUE JUNE 15, 2007
----------------
The Notes are offered for sale in the United States and Europe.
Interest on the Notes is payable on June 15 and December 15 of each year,
commencing December 15, 1997. The Notes are not redeemable prior to maturity,
except that the Notes may be redeemed in whole but not in part at any time at
100% of their principal amount plus accrued interest in the event of certain
developments affecting United States taxation as set forth herein under
"Description of Notes--Redemption and Purchase." The Notes will be represented
by one or more global Notes registered in the name of the nominee of the
Depository Trust Company ("DTC"). Beneficial interests in the global Notes
will be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants including the Depositaries for Cedel
and Euroclear. Except as described herein, Notes in definitive form will not
be issued. The Notes will be issued only in registered form in denominations
of $1,000 and integral multiples thereof. See "Description of Notes."
Application has been made to list the Notes on the Luxembourg Stock
Exchange.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING COMPANY
OFFERING PRICE (1) DISCOUNT (2) (1)(3)
------------------ ------------ -----------
<S> <C> <C> <C>
Per Note.......................... 99.637% 0.450% 99.187%
Total............................. $498,185,000 $2,250,000 $495,935,000
</TABLE>
- --------
(1) Plus accrued interest, if any, from July 1, 1997.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deduction of expenses payable by the Company, estimated to be
$175,000.
----------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Notes will be ready for delivery in book-entry form only through the
facilities of DTC, Cedel and Euroclear, on or about July 1, 1997, against
payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES LTD.
MORGAN STANLEY DEAN WITTER
UBS SECURITIES
----------------
The date of this Prospectus Supplement is June 25, 1997.
<PAGE>
THE COMPANY HAS WARRANTED TO THE UNDERWRITERS THAT THIS PROSPECTUS
SUPPLEMENT AND PROSPECTUS DO NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED HEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE, NOT MISLEADING. THE COMPANY HAS TAKEN ALL REASONABLE CARE TO
ASCERTAIN SUCH FACTS AND TO VERIFY THE ACCURACY OF ALL SUCH STATEMENTS. THE
COMPANY ACCEPTS RESPONSIBILITY ACCORDINGLY.
----------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MADE HEREBY MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
NOTES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS
IN SUCH NOTES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE LUXEMBOURG STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THE UNDERWRITERS AND THE COMPANY HAVE AGREED THAT THE CLOSING OF THE SALE OF
THE NOTES TO THE UNDERWRITERS WILL OCCUR FOUR BUSINESS DAYS AFTER THE DATE OF
THIS PROSPECTUS SUPPLEMENT.
S-2
<PAGE>
INTERIM SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of
Sears Roebuck Acceptance Corp. (the "Company" or "SRAC") for the three-month
periods ended March 29, 1997 and March 30, 1996. The summary information is
unaudited, but in the opinion of management, all adjustments (consisting only
of normal recurring accruals) necessary to present fairly the results of
operations of the Company have been included. The operating results for the
three-month period ended March 29, 1997 are not necessarily indicative of
results to be expected for the full year. The summary information should be
read in conjunction with the financial statements incorporated in the
Prospectus by reference.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
(UNAUDITED)
-------------------
MARCH 29, MARCH 30,
1997 1996
--------- ---------
(DOLLARS IN
MILLIONS)
<S> <C> <C>
Operating Results
Total revenues............ $ 208 $ 149
Interest and related
expenses................. 166 117
Total expenses............ 167 118
Income taxes.............. 14 11
Net income................ 27 20
Financial Position
Assets
Notes of Sears.......... $12,525 $8,824
Commercial receivable
balances purchased from
Sears.................. 79 69
Total assets............ 12,713 9,338
Liabilities
Commercial paper........ $ 3,625 $4,381
Agreements with bank
trust departments...... 92 124
Intermediate-term loans. 715 870
Medium-term notes....... 4,822 1,894
Discrete underwritten
debt................... 1,603 748
Total liabilities....... 11,000 8,073
Sears, Roebuck and Co.
investment in the Company
Capital stock (including
capital in excess of
par value)............. $ 385 $ 35
Retained income......... 1,328 1,230
Other Pertinent Data
Contractual Credit
Facilities (quarter-end). $ 5,000 $5,720
</TABLE>
During the first quarter of 1997, the Company's revenues increased 40% to
$208 million from $149 million in the comparable 1996 period. The increase in
revenue is attributable to a $3.2 billion or 34% increase in SRAC's average
earning assets compared to the first quarter of 1996 in response to Sears
funding requirements.
The Company's interest and related expenses increased 42% to $166 million
from $117 million for the first quarter of 1996 due to an increase in average
outstanding long-term debt. The Company's cost of short-term funds averaged
5.47% compared to 5.57% for the same period in 1996. The Company's short-term
borrowings averaged $3.9 billion compared to $4.8 billion for the first
quarter of 1996. The Company's long-term debt averaged $6.9 billion compared
with $3.2 billion in the first quarter of 1996.
The Company's net income of $27 million for the first quarter of 1997
reflects an increase of 35% over the comparable 1996 period amount of $20
million. The Company's ratio of earnings to fixed charges was 1.25 for the
first quarter of 1997 compared to 1.26 for the comparable 1996 period.
On May 16, 1997, the Company issued $300 million of its 6.95% Notes due May
15, 2002.
S-3
<PAGE>
CAPITALIZATION OF SEARS ROEBUCK ACCEPTANCE CORP.
The following table sets forth the capitalization of the Company at March
29, 1997, and as adjusted to give effect to issuance of the Notes being
offered hereby and the application of the net proceeds therefrom.
<TABLE>
<CAPTION>
MARCH 29, 1997
-----------------------
AS
OUTSTANDING ADJUSTED(1)
----------- -----------
(U.S. DOLLARS IN
MILLIONS)
<S> <C> <C>
Debt payable within one year(2)......................... $ 3,717 $ 3,221
Term debt............................................... 7,140 7,636
Stockholder's equity(3)................................. 1,713 1,713
------- -------
Total capitalization(4) ................................ $12,570 $12,570
======= =======
</TABLE>
- --------
(1) Assumes the issuance of the Notes and use of the net proceeds of U.S.
$495,935,000 initially to retire short-term debt.
(2) Excluding the current portion of term debt, which is included in term
debt.
(3) The Company has 500,000 authorized shares of common stock, $100 par value.
There were 350,000 shares of common stock outstanding as of March 29,
1997.
(4) There has been no material change in the capitalization of the Company
since March 29, 1997.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Prospectus as the "Offered Debt Securities")
supplements the description of the general terms and provisions of Debt
Securities set forth in the accompanying Prospectus, to which description
reference is hereby made. Reference should be made to the Prospectus and the
Indenture under which the Notes will be issued for the definitions of certain
capitalized terms used herein.
The Notes are to be issued under an Indenture, dated as of May 15, 1995,
between the Company and The Chase Manhattan Bank as Trustee. A copy of the
Indenture has been filed with the Commission and is hereby incorporated by
reference as part of the Registration Statement. The obligations of the
Company under the Notes will constitute direct, unsecured and unsubordinated
obligations of the Company and will rank pari passu with all other unsecured
and unsubordinated indebtedness of the Company.
The Notes will mature on June 15, 2007 (the "Maturity Date") at par and will
be limited in aggregate principal amount to $500,000,000. The Notes will
constitute a single series of Debt Securities under the Indenture. The Notes
will be issued in fully registered book-entry form only, without coupons, in
denominations of $1,000 and integral multiples thereof. Each Note will bear
interest at the rate per annum shown on the cover page of this Prospectus
Supplement from and including July 1, 1997 or from and including the most
recent Interest Payment Date to which interest has been paid or provided for,
payable semi-annually on June 15 and December 15 of each year, commencing
December 15, 1997 (each, an "Interest Payment Date"), to the person in whose
name the Note is registered (the "Holder") at the close of business on the
June 1 or December 1, respectively, next preceding such Interest Payment Date
(the "Regular Record Date"). Interest payable on December 15, 1997 for the
period from and including July 1, 1997 to and excluding December 15, 1997 on
each $1,000 Note will be $31.89. For so long as the Notes are held solely in
book-entry form through the facilities of Cedel Bank, societe anonyme
("Cedel") and the Euroclear System, the only registered Holder of Notes will
be Cede & Co., as nominee for DTC.
If any Interest Payment Date falls on a day that is not a Business Day, the
interest payment shall be made on the next day that is a Business Day, and no
interest on such payment shall accrue for the period from and after the
Interest Payment Date. Interest on the Notes will be computed on the basis of
a 360-day year of twelve 30-day months.
S-4
<PAGE>
Payments of principal will be made to DTC by wire transfer (or, if
Definitive Notes (as defined below) are issued, to holders of Definitive Notes
by check unless proper wire transfer instructions are on file with the Trustee
or are received at presentment) upon presentation and surrender of such Note
on or before the Maturity Date (or the redemption date, if applicable).
Payments of interest will be made to DTC by wire transfer (or, if Definitive
Notes are issued, to holders of Definitive Notes by check unless proper wire
transfer instructions are on file with the Trustee).
The Company has initially appointed the Trustee at its corporate trust
office in the City of New York and Chase Manhattan Bank Luxembourg S.A., 5 rue
Plaetis, L-2338 Luxembourg as paying agents. The Company may at any time
terminate the appointment of any paying agent and appoint additional or other
paying agents, provided that so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of the Luxembourg Stock Exchange so require, the
Company will maintain a paying agency in Luxembourg for payments on the Notes.
Notice of any termination or appointment and of any change in the office
through which any paying agent will act will be given in accordance with
"Notices" below.
REDEMPTION AND PURCHASE
The Notes are not redeemable prior to maturity except as provided under this
heading. The Notes will be paid by the Company in full at maturity on June 15,
2007 if they have not been otherwise redeemed as described herein.
The Notes may be redeemed at the option of the Company, as a whole but not
in part, at any time prior to maturity, upon the giving of a notice of
redemption as described below, at a redemption price equal to 100% of the
principal amount of the Notes, together with accrued interest to the date
fixed for redemption, if the Company determines that as a result of (A) any
change in or amendment to the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or any change in the application, official
interpretation or enforcement of such laws, regulations or rulings, including
a decision rendered by a court of competent jurisdiction in the United States
or any political subdivision thereof, whether or not such decision was
rendered with respect to the Company; or (B) any action taken by a taxing
authority which action is generally applied or is taken with respect to the
Company, which change, amendment, action, decision or memorandum is
promulgated on or after July 1, 1997, there is substantial probability that
the Company has or will become obligated to pay Additional Amounts with
respect to the Notes as described herein under "Payment of Additional
Amounts," and the Company cannot avoid such obligation by taking reasonable
measures available to it. Prior to the publication of any notice of redemption
of the Notes pursuant to the foregoing, the Company shall deliver to the
Trustee an opinion of legal counsel to the Company stating that the Company is
entitled to effect such redemption and a certificate setting forth facts
showing that the conditions precedent to the right of the Company to so redeem
have occurred.
Notice of redemption will be given by the Company in the manner described
below under "Notices" not less than 30 nor more than 60 days prior to the date
fixed for redemption, which date and redemption price will be specified in the
notice.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to the exceptions and limitations set forth below,
pay such additional amounts (the "Additional Amounts") to the holder of any
Note who is a United States Alien as may be necessary in order that every net
payment of the principal of or interest on such Note after deduction or
withholding for or on account of any present or future tax, assessment or
governmental charge imposed by the United States (or any political subdivision
or taxing authority thereof or therein) upon, or as a result of, such payment,
will not be less than the amount provided for in such Note to be then due and
payable. However, the Company will not be required to make any payment of
Additional Amounts to any such holder for or on account of:
S-5
<PAGE>
(a) any such tax, assessment or other governmental charge which would not
have been so imposed but for the existence of any present or former
connection between such holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such holder, if such
holder is an estate or trust, or a partner or shareholder of such holder,
if such holder is a partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power, partner or shareholder) being or
having been a citizen or resident thereof or being or having been engaged
in a trade or business or present therein or having, or having had, a
permanent establishment therein;
(b) any estate, inheritance, gift, sales, transfer or personal property
tax or any similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason of
such holder's past or present status as a personal holding company, foreign
personal holding company, controlled foreign corporation, passive foreign
investment company, private foundation or other tax exempt organization in
each case with respect to the United States, or as a corporation which
accumulates earnings to avoid United States federal income tax;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments on or in respect of any Note;
(e) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal or interest on
any Note, if such payment can be made without such withholding by any other
paying agent;
(f) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with any certification,
identification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the
United States of the holder or beneficial owner of such Note, if such
compliance is required by statute or by regulation of the United States or
of any political subdivision or taxing authority thereof as a precondition
to relief or exemption from such tax, assessment or other governmental
charge;
(g) any tax, assessment or other governmental charge imposed by reason of
such holder's past or present status as the actual or constructive owner of
10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote;
(h) any holder who is a fiduciary or partnership or other than the sole
beneficial owner of the Note, but only to the extent that a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner of the Note would not have been entitled to the payment of
an additional amount had such beneficiary, settlor, member or beneficial
owner been the holder of such Note; or
(i) any combination of terms (a), (b), (c), (d), (e), (f), (g) or (h).
The term "United States" means the United States of America, the
Commonwealth of Puerto Rico and each territory and possession of the United
States of America and area subject to its jurisdiction and the term "United
States Alien" means any person who, for United States federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which, as to the United States, is a
foreign corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust.
NOTICES
Notices to Holders shall be mailed by the Trustee, first class postage
prepaid, at their last addresses as they appear in the Security Register. In
addition, notices to holders of the Notes, so long as the Notes are listed on
the Luxembourg Stock Exchange and the rules of such Exchange shall so
S-6
<PAGE>
require, will be given by publication in a daily newspaper of general
circulation in Luxembourg. If publication in Luxembourg is not practical, such
publication shall be made elsewhere in Europe. Such publication is expected to
be made in the Luxemburger Wort. Such notices will be deemed to have been
given on the date of such publication. If publication as described above shall
become impossible, then alternate publication shall be considered sufficient
if it approximates the terms and conditions of the publication in lieu of
which it is given.
GOVERNING LAW
The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of Delaware.
BOOK-ENTRY REGISTRATION
The information in this section concerning DTC, Cedel and Euroclear and
their book-entry systems and procedures will apply to the Notes and has been
obtained from sources that SRAC believes to be reliable, but SRAC takes no
responsibility for the accuracy of the information in this section.
Book-Entry Owners (as defined below) may hold their Notes through DTC (in
the United States) or Cedel or Euroclear (in Europe). The Notes will be
registered in the name of the nominee of DTC. Cedel and Euroclear will hold
omnibus positions on behalf of the Cedel Participants (as defined below) and
the Euroclear Participants (as defined below), respectively, through
customers' securities accounts in Cedel's and Euroclear's names on the books
of their respective depositaries (collectively, the "Depositaries") which in
turn will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC. SRAC has been informed by DTC that
DTC's nominee will be Cede & Co. ("Cede"). Accordingly, Cede is expected to be
the holder of record of the Notes. The Notes will be available for purchase in
book-entry form in minimum denominations of $1,000 and integral multiples
thereof. No person acquiring the Notes (each, a "Book-Entry Owner") will be
entitled to receive a certificate representing that person's interest in the
Notes. Unless and until Definitive Notes (as defined below) are issued under
the limited circumstances described herein, all references herein to actions
by Holders will refer to actions taken by DTC upon instructions from its
Participants, as hereinafter defined, and all references herein to
distributions and notices to Holders will refer to distributions and notices
to DTC or Cede, as the registered holder of the Notes, for distribution to
Book-Entry Owners in accordance with DTC procedures.
DTC is a limited-purpose trust company organized under New York Banking Law,
a "banking organization" within the meaning of New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of securities certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations, and may
include certain other organizations some of which (and/or their
representatives) own DTC. Indirect access to the DTC system also is available
to others such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly ("Indirect Participants").
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their applicable rules and operating procedures.
S-7
<PAGE>
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other hand, will be effected by
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedel Participants and Euroclear Participants may not deliver
instructions directly to the Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing will be reported to the
relevant Cedel Participant or Euroclear Participant on such business day. Cash
received in Cedel or Euroclear as a result of sales of securities by or
through a Cedel Participant or a Euroclear Participant to a DTC Participant
will be received with value on the DTC settlement date but will be available
in the relevant Cedel or Euroclear cash account only as of the business day
following settlement in DTC.
Book-Entry Owners that are not Participants or Indirect Participants may
purchase, sell or otherwise transfer ownership of, or other interests in, the
Notes only through Participants and Indirect Participants. In addition, Book-
Entry Owners will receive all distributions of principal and interest from the
Trustee through the Participants. Under a book-entry format, Book-Entry Owners
may experience some delay in their receipt of payments, since the payments
will be forwarded by the Trustee to Cede, as nominee for DTC. DTC will forward
the payments to its Participants, which thereafter will forward them to
Indirect Participants or Book-Entry Owners. It is anticipated that the only
Holder will be Cede, as nominee of DTC. Book-Entry Owners will not be
recognized by the Trustee as "Holders," as that term is used in the Indenture,
and Book-Entry Owners will only be permitted to exercise the rights of Holders
indirectly through the Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers
among Participants on whose behalf it acts with respect to the Notes and is
required to receive and transmit distributions of the principal of and
interest on the Notes. Participants and Indirect Participants with which Book-
Entry Owners have accounts with respect to the Notes similarly are required to
make book-entry transfers and receive and transmit such payments on behalf of
their respective Book-Entry Owners.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Book-Entry
Owner to pledge Notes to persons or entities that do not participate in the
DTC system, or otherwise take actions in respect of those Notes, may be
limited due to the lack of a physical certificate for those Notes.
DTC has advised SRAC that it will take any action permitted to be taken by a
Holder under the Indenture only at the direction of one or more Participants
to whose account with DTC the Notes are credited.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations or
customers ("Cedel Participants") and facilitates the clearance and settlement
of securities transactions between Cedel Participants through electronic book-
entry changes in accounts of Cedel Participants, thereby eliminating the need
for physical movement of certificates. Transactions may now be settled in
Cedel in any of 36 currencies, including
S-8
<PAGE>
United States dollars. Cedel provides to its Cedel Participants, among other
things, services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing. Cedel
interfaces with domestic markets in several countries. As a professional
depository, Cedel is subject to regulation by the Luxembourg Monetary
Institute. Cedel Participants are recognized financial institutions around the
world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations and may
include the Underwriters. Indirect access to Cedel is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Cedel Participant, either directly
or indirectly.
The Euroclear System was created in 1968 to hold securities for participants
of the Euroclear System ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Transactions may now be settled in any of 34 currencies,
including United States dollars. The Euroclear System includes various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries generally similar to the arrangements
for cross-market transfers with DTC described above. The Euroclear System is
operated by Morgan Guaranty Trust Company of New York through its Brussels,
Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and
all Euroclear securities clearance accounts and Euroclear cash accounts are
accounts with the Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the Underwriters. Indirect access to the Euroclear System is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions
govern transfers of securities and cash within the Euroclear System,
withdrawal of securities and cash from the Euroclear System, and receipts of
payments with respect to securities in the Euroclear System. All securities in
the Euroclear System are held on a fungible basis without attribution of
specific certificates to specific securities clearance accounts. The Euroclear
Operator acts under the Terms and Conditions only on behalf of Euroclear
Participants and has no record of or relationship with persons holding through
Euroclear Participants.
Distributions with respect to Notes held through Cedel or Euroclear will be
credited to the cash accounts of Cedel Participants or Euroclear Participants
in accordance with the relevant system's rules and procedures, to the extent
received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
Cedel or the Euroclear Operator, as the case may be, will take any other
action permitted to be taken by a Holder under the Indenture on behalf of a
Cedel Participant or Euroclear Participant only in accordance with its
relevant rules and procedures and subject to its Depositary's ability to
effect such actions on its behalf through DTC.
S-9
<PAGE>
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Notes among participants of DTC, Cedel and
Euroclear, they are under no obligation to perform or continue to perform such
procedures and such procedures may be discontinued at any time.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds or the equivalent. Secondary market
trading between DTC Participants will occur in accordance with DTC rules and
will be settled in immediately available funds using DTC's Same-Day Funds
Settlement System. Secondary market trading between Cedel Participants and
Euroclear Participants will occur in accordance with the applicable rules and
operating procedures of Cedel and Euroclear and will be settled using the
procedures applicable to conventional eurobonds in immediately available
funds.
DEFINITIVE NOTES
The Notes will be issued in fully registered, certificated form to Book-
Entry Owners or their nominees ("Definitive Notes"), rather than to DTC or its
nominee only if (i) SRAC advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as Depositary with
respect to the Notes, and the Trustee or SRAC is unable to locate a qualified
successor, or (ii) SRAC, at its option, elects to terminate the book-entry
system through DTC.
Upon the occurrence of either of the events described in the immediately
preceding paragraph, the Trustee is required to notify all Book-Entry Owners
of the availability through DTC of Definitive Notes. Upon surrender by DTC of
a global note representing the Notes and instructions for re-registration, the
Trustee will issue the Definitive Notes, and thereafter the Trustee will
recognize the registered holders of such Definitive Notes as Holders under the
Indenture.
UNITED STATES TAX CONSIDERATIONS
The following summary of the principal United States federal income tax
consequences to an initial investor of the ownership of Notes is based upon
the opinion, set forth in full below, of Baker & McKenzie, special United
States tax counsel to SRAC. For purposes of this discussion of United States
Tax Considerations, the term "Holder" refers to Book-Entry Owners. The
discussion deals only with Notes held as capital assets and does not deal with
special tax situations, such as dealers in securities or currencies, Holders
whose functional currency is not the United States dollar, or persons holding
Notes as a hedge against currency risks or as part of a larger integrated
financial transaction. Persons considering the purchase of Notes should
consult their own tax advisors concerning the application of United States
federal income tax laws to their particular situations and any consequences
arising under the laws of any other taxing jurisdiction.
UNITED STATES HOLDERS
As used herein, "United States Holder" means a Holder of a Note who is, or
which is, a United States Person. A "United States Person" is (i) a citizen or
resident of the United States of America (including the States and the
District of Columbia), its territories, possessions and other areas subject to
its jurisdiction, including the Commonwealth of Puerto Rico (the "United
States"), (ii) a corporation or partnership created or organized in the United
States or under the laws of the United States or of any State and (iii) an
estate or trust, the income of which is subject to United States federal
income taxation regardless of its source.
Payments of Interest. Stated interest on a Note will be taxable to a United
States Holder as ordinary interest income at the time it accrues or is paid in
accordance with the United States Holder's method of accounting for tax
purposes.
S-10
<PAGE>
Purchase, Sale and Redemption of Notes. A United States Holder's tax basis
in a Note will be its U.S. dollar cost. Upon the sale or redemption of a Note,
a United States Holder will recognize capital gain or loss equal to the
difference between the amount realized on the sale or redemption of the Note
and the tax basis of the Note, and such gain or loss will be long-term capital
gain or loss if at the time of the sale or redemption the Note has been held
for more than one year.
FOREIGN HOLDERS
U.S. Withholding Tax. Under United States federal income tax laws now in
effect, and subject to the discussion of backup withholding which follows,
payments by SRAC or any paying agent thereof (in its capacity as such) of
principal of and interest on a Note to a Holder who is not a United States
Person will not be subject to United States federal withholding tax, provided
in the case of interest that (i) such Holder does not actually or
constructively own 10 percent or more of the total combined voting power of
all classes of stock of SRAC entitled to vote; (ii) such Holder is not a
controlled foreign corporation for United States tax purposes with respect to
which SRAC is a "related person" as defined in the Code; and (iii) (A) the
beneficial owner of the Note provides a signed written statement to SRAC or
its agent, under penalties of perjury, that certifies that it is not a United
States Person and provides its name and address, (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution") and holds the Note on behalf of the beneficial owner provides an
intermediary certificate to SRAC or its agent under penalties of perjury that
such a statement has been received from the beneficial owner by it or by a
Financial Institution between it and the beneficial owner and furnishes the
payor with a copy thereof, or (C) a securities clearing organization that is
the last intermediary in the chain before SRAC or its agent (a "qualified
clearing organization") electronically provides an intermediary certificate to
SRAC or its agent under penalties or perjury that such a statement has been
received from the beneficial owner by it or by an intermediary that is a
member of the qualified clearing organization and agrees to furnish (or to
cause the relevant member intermediary to furnish) promptly upon the request
of SRAC or the Internal Revenue Service such statement. A statement described
in this paragraph is effective only with respect to interest payments made to
the certifying Holder after the issuance of the statement in the calendar year
of its issuance and the two immediately succeeding calendar years.
U.S. Income Tax. Except for the possible imposition of United States
withholding tax (see "United States Tax Considerations--Foreign Holders--U.S.
Withholding Tax") and backup withholding tax (see "United States Tax
Considerations--Backup Withholding"), payments of principal of and interest on
a Note to a Holder who is not a United States Person will not be subject to
United States federal income tax, and gains from the sale, redemption or other
disposition of a Note will not be subject to United States federal income tax,
provided that none of the conditions specified in paragraphs (a) or (c) under
"Payment of Additional Amounts" exists.
If a Holder who is not a United States Person is engaged in a trade or
business in the United States and interest, gain or income in respect of a
Note of such Holder is effectively connected with the conduct of such trade or
business, the Holder, although exempt from the withholding tax discussed in
the preceding paragraphs, may be subject to United States income tax on such
interest, gain or income at the statutory rates provided for United States
Persons after deduction of deductible expenses allocable to such effectively
connected interest, gain or income. In addition, if such a Holder is a foreign
corporation, it may be subject to a branch profits tax equal to 30% of its
effectively connected earnings and profits for the taxable year, as adjusted
for certain items, unless a lower rate applies under a United States income
tax treaty with the Holder's country of residence. For this purpose, interest,
gain or income in respect of a Note will be included in earnings and profits
subject to the branch tax if the interest, gain or income is effectively
connected with the conduct of the United States trade or business of the
Holder.
S-11
<PAGE>
BACKUP WITHHOLDING
A 31% "backup" withholding tax and information reporting requirements apply
to certain payments of principal of and interest on an obligation, and to
proceeds of the sale of an obligation before maturity, to certain noncorporate
United States Holders, if such Holders fail to provide correct taxpayer
identification numbers and other information or fail to comply with certain
other requirements. SRAC, its paying agent, or a broker, as the case may be,
will be required to withhold from any payment that is subject to backup
withholding, a tax equal to 31% of such payment unless the Holder furnishes
its taxpayer identification number in the manner prescribed in applicable
Treasury regulations and certain other conditions are met.
In the case of payments of principal of and interest on Notes by SRAC or
paying agents of SRAC to Holders who are not United States Persons, temporary
Treasury regulations provide that backup withholding and information reporting
will not apply if the Holder has provided the required certification of its
non-United States status under penalties of perjury or has otherwise
established an exemption (provided that neither SRAC nor its paying agent has
actual knowledge that the Holder is a United States Person or the conditions
of any other exemption are not in fact satisfied). In addition, if payment is
collected by a foreign office of a custodian, nominee or other agent acting on
behalf of an owner of a Note, such custodian, nominee or other agent will not
be required to apply backup withholding to its payments to such owner.
However, in such case if the custodian, nominee or other agent is a United
States Person, a controlled foreign corporation for United States federal
income tax purposes, or a foreign person 50% or more of whose gross income is
from a United States trade or business for a specified three-year period, such
custodian, nominee or other agent will be subject to certain information
reporting requirements with respect to such payment unless such custodian,
nominee or other agent has evidence in its records that the Holder is not a
United States Person and no actual knowledge that such evidence is false or
the Holder otherwise establishes an exemption or is an exempt recipient. An
exempt recipient includes a bank, corporation or Financial Institution.
Payment on a Note by the United States office of a custodian, nominee or other
agent of a Holder of such Note will be subject to information reporting and
backup withholding unless such Holder certifies under penalty of perjury that
it is not a United States Person and provides its name and address or
otherwise establishes an exemption.
Under current regulations, payments of the proceeds of the sale of a Note by
a Holder who is not a United States Person to or through a foreign office of a
broker will not be subject to backup withholding. Payments by foreign offices
of a broker that is a United States Person, a controlled foreign corporation
for United States federal income tax purposes or a foreign person 50% or more
of whose gross income is from a United States trade or business for a
specified three-year period are currently subject to certain information
reporting requirements, unless the Holder is an exempt recipient or the broker
has evidence in its records that the Holder is not a United States Person and
no actual knowledge that such evidence is false. Payments of the proceeds of a
sale to or through the United States office of a broker will be subject to
information reporting and backup withholding unless the Holder certifies under
penalty of perjury that it is not a United States Person and provides its name
and address or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules from a payment to a
Holder will be allowed as a refund or a credit against such Holder's United
States federal income tax, provided that the required information is furnished
to the United States Internal Revenue Service.
The foregoing is based on the Internal Revenue Code of 1986, as amended,
regulations, rulings, administrative pronouncements and judicial decisions as
of the date hereof. Subsequent developments in these areas could have a
material effect on this opinion.
S-12
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions of the Underwriting Agreement
and Pricing Agreement dated the date hereof, the Company has agreed to sell to
each of the Underwriters named below, and each of the Underwriters, for whom
Goldman, Sachs & Co. are acting as representatives, has severally agreed to
purchase from the Company, the respective principal amounts of Notes set forth
opposite its name in the table below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- ------------
<S> <C>
Goldman, Sachs & Co............................................ $360,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................... 35,000,000
J.P. Morgan Securities Ltd..................................... 35,000,000
Morgan Stanley & Co. International Limited..................... 35,000,000
UBS Securities LLC............................................. 35,000,000
------------
Total...................................................... $500,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
to pay for and accept delivery of the Notes are subject to approval of certain
legal matters by their counsel and to certain other conditions. The
Underwriters are committed to take and pay for all of the Notes if any are
taken.
The Company has been advised by the Underwriters that they propose to offer
part of the Notes directly to the public at the initial public offering price
and on the terms set forth on the cover page of this Prospectus Supplement and
part to certain dealers at a price that represents a concession not in excess
of 0.30% of the principal amount of the Notes. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of 0.125% of the
principal amount of the Notes to certain other dealers. After the initial
offering of the Notes, the offering price and other selling terms may be
varied by the representatives.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the representatives of the Underwriters that
the representatives intend to make a market in the Notes but are not obligated
to do so and may discontinue market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the
Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover syndicate short positions
created in connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Notes; and syndicate short positions involve the
sale by the Underwriters of a greater aggregate principal amount of Notes than
they are required to purchase from the Company in the offering. The
Underwriters also may impose a penalty bid, whereby selling concessions
allowed to syndicate members or other broker-dealers in respect of the Notes
sold in the offering for their account may be reclaimed by the syndicate if
such Notes are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Notes, which may be higher than the price that might
otherwise prevail in the open market; and these activities, if commenced, may
be discontinued at any time. These transactions may be effected on the
Luxembourg Stock Exchange, in the over-the-counter market or otherwise.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.
S-13
<PAGE>
In the ordinary course of business, certain of the Underwriters and their
affiliates have engaged and may engage in the future in transactions with the
Company and its affiliates.
Each Underwriter hereby represents that (a) it has not offered or sold, and,
prior to the date six months after the date of issue of the Notes, will not
offer or sell any Notes to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (b) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of
Great Britain with respect to anything done by it in relation to the Notes in,
from or otherwise involving the United Kingdom; and (c) it has only issued or
passed on, and will only issue or pass on, in the United Kingdom any document
received by it in connection with the issuance of the Notes to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 of Great Britain or is a
person to whom the document may otherwise lawfully be issued or passed on.
Purchasers of the Notes may be required to pay stamp taxes and other charges
in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page hereof.
USE OF PROCEEDS
The net proceeds of U.S. $495,935,000 to be received by SRAC from the sale
of the Notes offered hereby will be added to its general funds and initially
used to reduce short-term indebtedness. See "Use of Proceeds" in the
Prospectus.
LEGAL OPINIONS
The legality of the Notes is being passed upon for the Company by Nancy K.
Bellis, an Assistant General Counsel of Sears. The legality of the Notes is
being passed upon for the Underwriters by Cleary, Gottlieb, Steen & Hamilton.
Cleary, Gottlieb, Steen & Hamilton from time to time performs legal services
for Sears.
LISTING AND GENERAL INFORMATION
Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application on the Luxembourg Stock
Exchange, the Restated Certificate of Incorporation of the Company and a legal
notice relating to the issuance of the Notes will have been deposited prior to
listing with the Chief Registrar of the District Court of Luxembourg, where
copies thereof may be obtained on request. So long as any of the Notes remain
outstanding, copies of the Restated Certificate of Incorporation of the
Company and the Indenture will be made available for inspection, and annual
financial statements, and annual and quarterly reports of the Company may be
obtained, at the office of Chase Manhattan Bank Luxembourg S.A. in the City of
Luxembourg.
The independent accountants of the Company are Deloitte & Touche LLP.
The resolutions relating to the execution of the Indenture and the sale and
issuance of the Notes were adopted by the Board of Directors of the Company on
March 26, 1995 and November 2, 1996.
Except as may be set forth in this Prospectus Supplement and the Prospectus,
in the judgment of the management of the Company, (a) there has been no
material adverse change in the condition of
S-14
<PAGE>
the Company since March 29, 1997 and (b) there is no pending litigation
against the Company which is not disclosed herein or in the documents
incorporated by reference which is likely to result in a material adverse
effect on the consolidated financial position of the Company.
The Notes have been accepted for clearance through Euroclear and Cedel with
a common code of 7786727 and an ISIN number of US812404AV3-7.
Copies of the documents described under "Available Information" and
"Incorporation of Certain Documents by Reference" in the Prospectus will be
available without charge at the office of Banque Generale du Luxembourg, S.A.,
50 Avenue J.F. Kennedy, L-2951 Luxembourg and Chase Manhattan Bank Luxembourg
S.A., 5 rue Plaetis, L-2338 Luxembourg.
S-15
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
DEBT SECURITIES
----------------
Sears Roebuck Acceptance Corp. ("SRAC") from time to time may offer up to
$1,964,185,000 aggregate initial offering price of its debt securities
consisting of debentures, notes and/or other unsecured evidences of
indebtedness (the "Debt Securities"). If so provided in the accompanying
Prospectus Supplement, the Debt Securities of any series may be represented in
whole or in part by one or more Global Securities ("Global Securities")
registered in the name of a depository's nominee and, if so represented,
beneficial interests in such Global Securities will be shown on, and transfers
thereof will be effected only through, records maintained by the depository
and its participants. The Debt Securities may be offered as separate series in
amounts, at prices and on terms to be set forth in supplements to this
Prospectus. It is anticipated that SRAC will sell Debt Securities directly to
institutional investors and may sell Debt Securities to or through
underwriters, and also may sell Debt Securities directly to other purchasers
or through agents. See "Plan of Distribution." The accompanying Prospectus
Supplement or Prospectus Supplements (the "Prospectus Supplement") sets forth
the names of any underwriters or agents involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the
principal amounts, if any, to be purchased by underwriters and the
compensation, if any, of such underwriters or agents.
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations, maturity, premium, if
any, rate (which may be fixed or variable) and time of payment of interest, if
any, terms for redemption at the option of SRAC or the Holder, terms for
sinking fund payments, the initial public offering price, the names of, and
the principal amounts, if any, to be purchased by underwriters and the
compensation of such underwriters, deferred pricing arrangements, if any, and
the other terms in connection with the offering and sale of the Debt
Securities in respect of which this Prospectus is being delivered, are set
forth in the accompanying Prospectus Supplement.
As used herein, Debt Securities shall include securities denominated in U.S.
dollars or, at the option of SRAC if so specified in the applicable Prospectus
Supplement, in any other currency or in composite currencies or in amounts
determined by reference to an index.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 13, 1997
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH THEY RELATE OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF OR THAT THE INFORMATION IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Reports to Holders of Debt Securities...................................... 3
Incorporation of Certain Documents by Reference............................ 3
Sears Roebuck Acceptance Corp.............................................. 4
Use of Proceeds............................................................ 4
Summary Financial Information.............................................. 5
Ratio of Earnings to Fixed Charges......................................... 6
Description of Debt Securities............................................. 6
Plan of Distribution....................................................... 10
Legal Opinion.............................................................. 10
Experts.................................................................... 10
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
SRAC and Sears, Roebuck and Co. ("Sears"), SRAC's parent, are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and in accordance therewith file reports and other
information with the Securities and Exchange Commission (the "Commission").
Sears also files proxy statements with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, in Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York
10048; and Suite 1400, Citicorp Center, 500 W. Madison Street, Chicago,
Illinois 60661-2511; and copies of such materials can be obtained from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission
(http://www.sec.gov). Reports and other information concerning SRAC can also
be inspected at the office of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Reports, proxy statements and other
information concerning Sears can also be inspected at the offices of the New
York Stock Exchange, Inc., the Chicago Stock Exchange Incorporated, 440 South
LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange, Inc.,
301 Pine Street, San Francisco, California 94104.
Additional information regarding SRAC, Sears and the Debt Securities is
contained in the Registration Statement and the exhibits relating thereto,
filed with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). For further information pertaining to SRAC, Sears and the
Debt Securities, reference is made to the Registration Statement, and the
exhibits thereto, which may be inspected without charge at the office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
thereof may be obtained from the Commission at prescribed rates.
REPORTS TO HOLDERS OF DEBT SECURITIES
Holders of Debt Securities will receive annual reports containing
information, including financial information that has been audited and
reported on by independent public accountants, about SRAC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Reports on Form 10-K for the year ended December 28, 1996 filed
by SRAC and Sears, the Quarterly Reports on Form 10-Q for the quarter ended
March 29, 1997 filed by SRAC and Sears, and the Current Reports on Form 8-K
for January 7, January 23, April 10, June 3, June 5 and June 11, 1997 filed by
Sears and for February 25 and May 9, 1997 filed by SRAC with the Commission
pursuant to Section 13 of the Exchange Act, are incorporated in and made part
of this Prospectus by reference.
All documents filed by SRAC or Sears with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the Debt
Securities (other than those portions of such documents described in
paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated by the
Commission) shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
SRAC WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (NOT
INCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). WRITTEN OR TELEPHONE REQUESTS
FOR SUCH COPIES SHOULD BE DIRECTED TO SEARS ROEBUCK ACCEPTANCE CORP., 3711
KENNETT PIKE, GREENVILLE, DELAWARE 19807, ATTENTION: VICE PRESIDENT (302/888-
3100).
3
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
SRAC is a wholly-owned subsidiary of Sears and was incorporated in 1956
under the laws of Delaware. Its general offices are located at 3711 Kennett
Pike, Greenville, Delaware 19807 (302/888-3100). SRAC raises funds primarily
from the direct placement of commercial paper with corporate and institutional
investors and through intermediate-term loans, discrete underwritten debt and
medium-term notes. SRAC uses borrowing proceeds to acquire short-term notes of
Sears and purchase outstanding customer receivable balances from Sears. Sears,
which is a multi-line retailer that conducts domestic and international
merchandising operations, uses the funds obtained from SRAC for general
funding purposes. SRAC, and not Sears, will be the sole obligor on the Debt
Securities.
SRAC's income is derived primarily from the earnings on its investment in
the notes and commercial receivable balances of Sears. The interest rate on
Sears notes is presently calculated so that SRAC maintains an earnings to
fixed charges ratio of at least 1.25. The yield on the investment in Sears
notes is related to SRAC's borrowing costs and, as a result, SRAC's earnings
fluctuate in response to movements in interest rates and changes in Sears
short-term borrowing requirements. Subject to the provisions of the Indenture
relating to the Debt Securities, SRAC will be required to maintain a ratio of
earnings to fixed charges (determined in accordance with Item 503(d) of
Regulation S-K promulgated by the Commission) of not less than 1.10 for any
fiscal quarter and cause Sears to maintain ownership of all voting stock of
SRAC as long as any Debt Securities are outstanding, and Sears has agreed to
pay SRAC such amounts as may be necessary for such purpose and to maintain
such ownership. See "Description of Debt Securities--Certain Restrictions."
At May 31, 1997, SRAC had nine employees.
USE OF PROCEEDS
The net proceeds to be received by SRAC from the sale of the Debt Securities
offered hereby will be added to its general funds and initially used to reduce
short-term indebtedness. As indicated under "Sears Roebuck Acceptance Corp.,"
SRAC's principal business is the purchase of short-term notes of Sears; also,
on occasion, SRAC purchases commercial receivable balances from Sears domestic
credit operations. SRAC expects to incur additional indebtedness, but the
amount and nature thereof have not yet been determined and will depend on
economic conditions and certain capital requirements of Sears. It is
anticipated that Sears and its subsidiaries will continue their practice of
short-term borrowing and will, from time to time, incur additional long-term
debt and engage in securitization programs in which interests in pools of
credit card receivables are sold in public or private transactions. Sears also
may, from time to time, issue equity securities.
4
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of SRAC
for the five fiscal years ended December 28, 1996. The summary information
should be read in conjunction with the financial statements of SRAC and the
notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------- ------ ------ ------ -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Operating Results
Total revenues....................... $ 689 $ 510 $ 283 $ 338 $ 697
Interest and related expenses........ 546 405 219 236 483
Total expenses....................... 548 407 221 277 532
Income taxes......................... 49 36 22 21 56
Net income........................... 92 67 40 40 108
Financial Position
Assets
Notes of Sears..................... $11,609 $8,397 $6,843 $3,404 $10,494
Commercial receivable balances
purchased from Sears.............. 76 81 82 88 963
Total assets....................... 12,004 8,635 7,031 4,146 12,415
Liabilities
Commercial paper................... $ 3,324 $4,451 $4,913 $2,475 $ 8,515
Agreements with bank trust
departments....................... 82 137 87 140 398
Intermediate-term loans............ 715 895 845 -- --
Medium-term notes.................. 4,834 1,384 -- -- --
Discrete underwritten debt......... 1,298 499 -- -- --
Loan agreements with Sears Overseas
Finance, N.V...................... -- -- -- 380 332
Total liabilities.................. 10,317 7,390 5,854 3,008 9,287
Sears, Roebuck and Co. investment in
SRAC
Capital stock (including capital in
excess of par value).............. $ 385 $ 35 $ 35 $ 35 $ 365
Retained income.................... 1,302 1,210 1,143 1,103 2,763
Debt as percentage of equity......... 608% 592% 496% 263% 296%
Other Pertinent Data
Commercial paper
Average daily outstandings......... $ 4,387 $4,963 $3,615 $3,812 $ 9,328
Agreements with bank trust
departments
Average daily outstandings......... 98 154 124 402 747
Contractual credit facilities (year-
end)................................ 5,000 5,720 5,132 4,200 10,812
</TABLE>
5
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for SRAC for the three-month period
ended March 29, 1997 was 1.25 and for the years ended December 28, 1996,
December 30, 1995, and December 31, 1994, 1993 and 1992 was 1.26, 1.26, 1.29,
1.26 and 1.34, respectively. Earnings consist of net income plus fixed charges
and income taxes. Fixed charges consist of interest costs and amortization of
debt discount and expense; rental expense is insignificant with no effect on
the calculation. The interest rate paid by Sears to SRAC on its investment in
Sears notes is presently calculated to produce earnings sufficient to cover
SRAC's fixed charges at least 1.25 times.
The ratio of income to fixed charges for Sears and its consolidated
subsidiaries for the three-month period ended March 29, 1997 was 1.87 and for
the years ended December 28, 1996, December 30, 1995, and December 31, 1994
and 1993 was 2.40, 2.15, 2.06 and 1.66, respectively. For the year ended
December 31, 1992, earnings did not cover fixed charges by $2,870 million. In
the computation of the ratio of income to fixed charges for Sears and its
consolidated subsidiaries, income consists of income from continuing
operations less undistributed net income of unconsolidated subsidiaries plus
fixed charges (excluding capitalized interest) and federal and state income
taxes. Fixed charges consist of interest costs plus the portion of operating
lease rentals which is estimated to represent the interest element in such
rentals.
DESCRIPTION OF DEBT SECURITIES
The following descriptions of the terms of the Debt Securities set forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating
to such Offered Debt Securities.
The Debt Securities are to be issued under one of the Indentures (each, an
"Indenture") referred to in the following sentence, a copy of the form of
which has been filed as an exhibit to the Registration Statement. SRAC has
entered into an Indenture with The Chase Manhattan Bank, N.A., as Trustee, and
may enter into Indentures with one or more other Trustees eligible to act as
Trustee (each, a "Trustee") under an Indenture pursuant to the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). The particular Indenture
under which any series of Debt Securities is to be issued, and the identity of
the Trustee under such Indenture, will be identified in the Prospectus
Supplement relating to such series of Debt Securities. The following summaries
of certain provisions of the Debt Securities and the Indenture do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Indenture, including the definitions
therein of certain terms. Whenever particular provisions or defined terms in
the Indenture are referred to herein, such provisions or defined terms are
incorporated by reference.
GENERAL
The Debt Securities will be unsecured obligations of SRAC.
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of
the Offered Debt Securities: (i) the title of the Offered Debt Securities;
(ii) any limit on the aggregate principal amount of the Offered Debt
Securities; (iii) the date or dates on which the Offered Debt Securities will
mature; (iv) the price (expressed as a percentage of the aggregate principal
amount thereof) at which the Offered Debt Securities will be
6
<PAGE>
issued; (v) the rate or rates (which may be fixed or variable) per annum at
which the Offered Debt Securities will bear interest, if any; (vi) the date
from which such interest, if any, on the Offered Debt Securities will accrue,
the dates on which such interest, if any, will be payable, the date on which
payment of such interest, if any, will commence and the Regular Record Dates
for such Interest Payment Dates, if any; (vii) the date or dates, if any,
after or on which and the price or prices at which the Offered Debt Securities
may, pursuant to any optional or mandatory redemption, conversion or exchange
provisions, be redeemed, converted or exchanged at the option of SRAC or of
the Holder thereof and the other detailed terms and provisions of such
optional or mandatory redemption; (viii) any subordination provisions; (ix)
the dates, if any, on which and the price or prices at which the Offered Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund provisions, be redeemed by SRAC, and the
other detailed terms and provisions of such sinking fund; (x) if other than
the principal amount thereof, the amount of Offered Debt Securities which
shall be payable upon declaration of acceleration of the Maturity thereof;
(xi) the terms of any warrants attached to the Offered Debt Securities; (xii)
the currency or currencies, including European Currency Units or other
composite currencies, in which Offered Debt Securities may be purchased and in
which principal, premium, if any, and interest, if any, on the Offered Debt
Securities will be payable; (xiii) any index used to determine the amount of
payments of principal, premium, if any, and interest, if any, on the Offered
Debt Securities; (xiv) whether the Offered Debt Securities are issuable in
whole or in part as one or more Global Securities and, in such case, the name
of the Depository for such Global Security or Global Securities; (xv) the
place or places, if other than as set forth in the Indenture, where the
principal, premium, if any, and interest, if any, on the Offered Debt
Securities will be payable; and (xvi) any other terms relating to the Offered
Debt Securities not inconsistent with the Indenture but which may modify or
delete any provision of the Indenture insofar as it applies to such series;
provided that no term thereof shall be modified or deleted if imposed under
the Trust Indenture Act and that any modification or deletion of the rights,
duties or immunities of the Trustee shall have been consented to in writing by
the Trustee.
Principal, premium, if any, and interest, if any, will be payable, and the
Debt Securities (other than Debt Securities represented by Global Securities)
will be transferable, at the office or agency of SRAC maintained for such
purposes in the Borough of Manhattan of the City of New York, and at such
other places, if any, in the city in which the principal executive offices of
SRAC or the city in which the principal corporate trust office of the Trustee
are located, as SRAC may designate, which, except as otherwise specified in
the Prospectus Supplement relating to a particular series of Offered Debt
Securities, will initially include the principal corporate trust office of the
Trustee in the Borough of Manhattan of The City of New York and the principal
executive offices of SRAC in Greenville, Delaware. Unless other arrangements
are made, interest on the Debt Securities (other than Debt Securities
represented by Global Securities) will be paid by checks mailed to the Holders
at their registered addresses. (Sections 2.5, 3.1, 3.2) Information with
respect to payment of principal, premium, if any, and interest, if any, on,
and transfers of beneficial interests in, Debt Securities represented by
Global Securities will be set forth in the Prospectus Supplement relating
thereto.
If the principal, premium, if any, and interest, if any, will be payable in
a currency other than U.S. dollars, including European Currency Units or
another composite currency, and such currency is not available for payment due
to the imposition of exchange controls or other circumstances beyond the
control of SRAC, SRAC shall satisfy its payment obligations in U.S. dollars on
the basis of the Market Exchange Rate for such currency on the latest date for
which such rate was established on or before the date on which payment is due.
(Section 2.12)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any registration of transfer or exchange of
the Offered Debt Securities, but SRAC may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Sections 2.2, 2.5)
7
<PAGE>
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security which provides for an amount less than
the principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of a default and the
continuation thereof.
CERTAIN RESTRICTIONS
The Indenture provides that SRAC will maintain a Fixed Charge Coverage Ratio
for any fiscal quarter of not less than 1.10 and that SRAC will cause Sears to
maintain ownership of all the voting stock of SRAC. "Fixed Charge Coverage
Ratio" means SRAC's ratio of earnings to fixed charges determined in
accordance with Item 503(d) of Regulation S-K promulgated by the Commission,
as in effect on the date of the Indenture. Pursuant to letter agreements
between SRAC and Sears (the "Fixed Charge Coverage and Ownership Agreement"),
Sears has agreed, for the benefit of holders of outstanding Debt Securities,
that, (i) as long as SRAC is so required to maintain such Fixed Charge
Coverage Ratio, Sears will pay SRAC such amounts which, together with any
other earnings available therefor, are sufficient for SRAC to maintain such
Fixed Charge Coverage Ratio, and (ii) as long as SRAC is so required to cause
Sears to maintain ownership of SRAC, Sears will maintain such ownership. The
Indenture provides that SRAC (i) will cause Sears to observe and perform in
all material respects all covenants or agreements of Sears contained in the
Fixed Charge Coverage and Ownership Agreement and (ii) will not amend, waive,
terminate or otherwise modify any provision of the Fixed Charge Coverage and
Ownership Agreement. (Section 3.6)
DEFAULTS
The following are defaults with respect to any series of Debt Securities:
(a) failure to pay the principal amount (and premium, if any) on such series
when due and payable; (b) failure to pay any interest on such series when due,
continued for 30 days (unless the entire amount of such payment is deposited
by SRAC with the Trustee or with a paying agent prior to the expiration of 30
days); (c) failure to perform any other covenant of SRAC in the Indenture
(other than a covenant included in the Indenture solely for the benefit of any
series of Debt Securities other than that series), continued for 60 days after
written notice; (d) acceleration of $100,000,000 or more in principal amount
of indebtedness for borrowed money of SRAC (including acceleration with
respect to Debt Securities other than that series) or Sears under the terms of
the instrument under which such indebtedness is issued or secured (including
the Indenture), if such indebtedness shall not have been discharged or such
acceleration is not annulled within 30 days after written notice or prior to
the time principal owed on the outstanding Debt Securities of that series
shall be declared due and payable, except as a result of compliance with
applicable laws, orders or decrees; and (e) certain events of bankruptcy,
insolvency, or reorganization. In addition, a particular series of Debt
Securities may provide for additional events of default, as may be described
in the Prospectus Supplement. If a default shall occur and be continuing with
respect to any series of Debt Securities, the Trustee or the Holders of a
majority in principal amount of the outstanding Debt Securities of that series
may declare the principal amount of such series (or, if the Debt Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) due and
payable immediately, which declaration may, in certain instances, be annulled
by the Holders of a majority of the principal amount of outstanding Debt
Securities of that series. In the case of such declaration, there would become
due and payable such principal amount plus any accrued interest or other
periodic payments. (Section 6.1)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder previously shall have given to the Trustee
written notice of a default and unless also the Holders of a majority of the
principal
8
<PAGE>
amount of outstanding Debt Securities of that series shall have made written
request upon the Trustee, offering reasonable indemnity, to institute such
proceeding as Trustee, and the Trustee shall have neglected or refused to
institute such proceeding within a reasonable time. However, the right of any
Holder of any Debt Security of that series to enforce the payment of principal
and interest on such Debt Security, on or after the due dates expressed in
such Debt Security, may not be impaired or affected. (Section 6.7)
SRAC is required to furnish annually to the Trustee statements as to the
performance or fulfillment of its covenants, agreements or conditions in the
Indenture and as to the absence of default. (Section 3.4)
MODIFICATION OR AMENDMENT OF THE INDENTURE
Modifications and alterations of the Indenture may be made by SRAC with the
consent of the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of each series affected by the modification or
alteration, provided that no such change shall be made without the consent of
the Holders of each Debt Security then outstanding affected thereby which will
(a) permit the extension of the time of payment of any payment on any such
Debt Security, or a reduction in any such payment, or (b) reduce the above-
stated percentage of Holders of any series of Debt Securities whose consent is
required to modify or alter the Indenture. (Article XI)
DEFEASANCE
Unless otherwise provided for in the accompanying Prospectus Supplement,
SRAC may discharge the Indenture with respect to Debt Securities of any series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, replace mutilated, destroyed, lost and stolen Debt
Securities of such series, maintain paying agencies and hold moneys for
payment in trust) upon the deposit with the Trustee or a paying agent, in
trust, of (1) money in an amount sufficient, or (2) U.S. Government
Obligations (if the Debt Securities are denominated in U.S. dollars) or
Eligible Obligations (if the Debt Securities are denominated in a Foreign
Currency) which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient, or (3) any combination thereof in an amount sufficient, to pay the
principal, premium, if any, and each installment of interest on the Debt
Securities of such series on the dates such payments are due in accordance
with the terms of the Indenture and such Debt Securities. Such a trust may
only be established if, among other things, SRAC has received a ruling from
the Internal Revenue Service or an opinion of recognized counsel who is not an
employee of SRAC based on a change of law, in either case to the effect that,
among other things, the Holders of the Debt Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance of the Indenture and will be subject to federal
income tax on the same amount and in the same manner and at the same times, as
would have been the case if such deposit and defeasance had not occurred.
Notwithstanding such deposit, the obligations of SRAC under the Indenture to
pay interest and principal shall remain in full force and effect until the
Debt Securities of such series have been paid in full. (Section 13.4)
If and when a ruling from the Internal Revenue Service or an opinion of
recognized counsel can be provided without reliance upon the continuation of
SRAC's obligations regarding the payment of interest and principal, then such
obligations of SRAC shall cease upon delivery to the Trustee of such ruling or
opinion and compliance with the other conditions precedent provided for in the
Indenture. (Section 13.4) Under present ruling positions of the Internal
Revenue Service, such a ruling is not obtainable.
REGARDING THE TRUSTEE
The Chase Manhattan Bank, which is a Trustee under an Indenture, performs
other services for SRAC.
9
<PAGE>
PLAN OF DISTRIBUTION
General. SRAC may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. It is
anticipated that SRAC will offer Debt Securities directly to brokers or
dealers, investment companies, insurance companies, banks, savings and loan
associations, trust companies or similar institutions, and trusts for which a
bank, savings and loan association, trust company or investment adviser is the
trustee or authorized to make investment decisions.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Offered Debt Securities.
In connection with the sale of Debt Securities, underwriters may receive
compensation from SRAC or from purchasers of Debt Securities for whom they may
act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act
as agent. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts, commissions or concessions received by them and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts
and commissions under the Act. Any such underwriter or agent will be
identified, and any such compensation will be described, in the Prospectus
Supplement.
Under agreements that may be entered into by SRAC, underwriters, dealers and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by SRAC against certain liabilities, including liabilities
under the Securities Act.
LEGAL OPINION
Unless otherwise specified in the accompanying Prospectus Supplement, the
legality of the Debt Securities is being passed upon for SRAC by Nancy K.
Bellis, an Assistant General Counsel of Sears.
EXPERTS
The annual financial statements incorporated by reference in this prospectus
and the financial statements from which the Summary Financial Information
included in this Prospectus have been derived have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports incorporated by
reference herein, and with respect to the Summary Financial Information has
been included as Exhibit 99 to the Registration Statement. Such financial
statements and Summary Financial Information have been incorporated by
reference and included herein, respectively, in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information contained in the
Quarterly Reports on Form 10-Q for Sears and SRAC, which are incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Quarterly Reports on Form
10-Q for Sears and SRAC and incorporated by reference herein, they did not
audit and they did not express an opinion on such interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche LLP are not subject to the liability
provisions of Section 11 of the Securities Act for their reports on the
unaudited interim financial information because those reports are not
"reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Securities Act.
10
<PAGE>
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY
SEARS ROEBUCK ACCEPTANCE CORP.
3711 KENNETT PIKE
GREENVILLE, DELAWARE 19807
INDEPENDENT ACCOUNTANTS TO THE COMPANY
DELOITTE & TOUCHE LLP
Two Prudential Plaza 1700 Market Street
180 North Stetson Avenue Philadelphia, Pennsylvania 19103
Chicago, Illinois 60601
LEGAL ADVISERS
To the Company
BAKER & MCKENZIE NANCY K. BELLIS LATHAM & WATKINS
Special Tax Counsel Assistant General Counsel 5800 Sears Tower
815 Connecticut Avenue, Sears, Roebuck and Co. Chicago, Illinois 60606
N.W. 3333 Beverly Road
Washington, D.C. 20006 Hoffman Estates, Illinois
60179
To the Underwriters
CLEARY, GOTTLIEB, STEEN & HAMILTON
One Liberty Plaza
New York, New York 10006
TRUSTEE
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
PAYING AGENTS
CHASE MANHATTAN BANK LUXEMBOURG S.A. THE CHASE MANHATTAN BANK
5 rue Plaetis 450 West 33rd Street, 15th Floor
L-2338 Luxembourg New York, NY 10001-2697
LISTING AGENT
BANQUE GENERALE DU LUXEMBOURG, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Interim Summary Financial Information...................................... S-3
Capitalization of Sears Roebuck Acceptance Corp............................ S-4
Description of Notes....................................................... S-4
Book-Entry Registration.................................................... S-7
United States Tax Considerations........................................... S-10
Underwriting............................................................... S-13
Use of Proceeds............................................................ S-14
Legal Opinions............................................................. S-14
Listing and General Information............................................ S-14
PROSPECTUS
Available Information...................................................... 3
Reports to Holders of Debt Securities...................................... 3
Incorporation of Certain Documents by Reference............................ 3
Sears Roebuck Acceptance Corp.............................................. 4
Use of Proceeds............................................................ 4
Summary Financial Information.............................................. 5
Ratio of Earnings to Fixed Charges......................................... 6
Description of Debt Securities............................................. 6
Plan of Distribution....................................................... 10
Legal Opinion.............................................................. 10
Experts.................................................................... 10
</TABLE>
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$500,000,000
SEARS ROEBUCK
ACCEPTANCE CORP.
7% NOTES DUE
JUNE 15, 2007
-----------
PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES LTD.
MORGAN STANLEY DEAN WITTER
UBS SECURITIES
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