<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 13, 1998
$1,000,000,000
SEARS ROEBUCK ACCEPTANCE CORP.
6% NOTES DUE MARCH 20, 2003
------------------------
The Notes are offered for sale in the United States and Europe.
Interest on the Notes is payable on March 20 and September 20 of each year,
commencing September 20, 1998. 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 depositories for Cedel and
Euroclear. Except as described herein, Notes in certificated 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>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Per Note........................... 99.342% .350% 98.992%
Total.............................. $993,420,000 $3,500,000 $989,920,000
</TABLE>
- ---------------
(1) Plus accrued interest, if any, from March 20, 1998.
(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
$375,000.
------------------------
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 March 20, 1998 against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. J.P. MORGAN & CO.
BEAR, STEARNS INTERNATIONAL LIMITED
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
------------------------
The date of this Prospectus Supplement is March 13, 1998.
<PAGE> 2
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 FIVE BUSINESS DAYS AFTER THE DATE OF
THIS PROSPECTUS SUPPLEMENT.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of
Sears Roebuck Acceptance Corp. (the "Company" or "SRAC") for the fiscal years
ended January 3, 1998 and December 28, 1996. The summary information should be
read in conjunction with the financial statements incorporated in the Prospectus
by reference.
<TABLE>
<CAPTION>
1997 1996
---- ----
(DOLLARS IN MILLIONS)
<S> <C> <C>
Operating Results
Total revenues.............................................. $ 960 $ 689
Interest and related expenses............................... 763 546
Total expenses.............................................. 767 548
Income taxes................................................ 68 49
Net income.................................................. 125 92
Financial Position (year-end)
Assets
Notes of Sears............................................ $16,561 $11,609
Receivable balances purchased from Sears.................. 89 76
Total assets.............................................. 16,716 12,004
Liabilities
Commercial paper.......................................... 5,249 3,324
Agreements with bank trust departments.................... -- 82
Intermediate-term loans................................... 50 715
Medium-term notes......................................... 6,033 4,834
Discrete underwritten debt................................ 3,099 1,298
Total liabilities......................................... 14,554 10,317
Sears investment in the Company
Capital stock (including capital in excess of par
value)................................................. 735 385
Retained income........................................... 1,427 1,302
Other Pertinent Data
Contractual Credit Facilities (year-end).................... $ 5,540 $ 5,000
</TABLE>
During the year ended January 3, 1998, the Company's revenues increased 39%
to $960 million from $689 million in 1996. The increase in revenue is
attributable to an increase in SRAC's average earning assets compared to 1996 in
response to Sears funding requirements.
For the year ended January 3, 1998, the Company's interest and related
expenses increased 40% to $763 million from $546 million in the year ended
December 28, 1996. The Company's cost of short-term funds averaged 5.60%
compared to 5.50% for 1996. The Company's short-term borrowings averaged $4.0
billion compared to the 1996 level of $4.5 billion. The Company's long-term debt
averaged $7.9 billion compared to $4.7 billion in 1996.
The Company's net income of $125 million for 1997 reflects an increase of
36% over the 1996 amount of $92 million. The Company's ratio of earnings to
fixed charges was 1.25 for 1997 compared to 1.26 for 1996.
S-3
<PAGE> 4
CAPITALIZATION OF SEARS ROEBUCK ACCEPTANCE CORP.
The following table sets forth the capitalization of the Company at January
3, 1998, and as adjusted to give effect to issuance of the Notes being offered
hereby and the application of the net proceeds therefrom.
<TABLE>
<CAPTION>
JANUARY 3, 1998
--------------------------
AS
OUTSTANDING ADJUSTED(1)
----------- -----------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C>
Debt payable within one year(2)............................. $ 5,249 $ 4,259
Term debt................................................... 9,182 10,172
Stockholder's equity(3)..................................... 2,162 2,162
------- -------
Total capitalization(4)..................................... $16,593 $16,593
======= =======
</TABLE>
- ---------------
(1) Assumes the issuance of the Notes and use of the net proceeds of U.S.
$989,920,000 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 January 3, 1998.
(4) There has been no material change in the capitalization of the Company since
January 3, 1998.
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 March 20, 2003 (the "Maturity Date") at par and
will be limited in aggregate principal amount to $1,000,000,000. 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 March 20, 1998 or from and including the most
recent Interest Payment Date to which interest has been paid or provided for,
payable semi-annually on March 20 and September 20 of each year, commencing
September 20, 1998 (each, an "Interest Payment Date"), to the person in whose
name the Note is registered (the "Holder") at the close of business on the March
5 or September 5, respectively, next preceding such Interest Payment Date (the
"Regular Record Date"). Interest payable on September 20, 1998 for the period
from and including March 20, 1998 to and excluding September 20, 1998 on each
$1,000 Note will be $30.00. For so long as the Notes are held solely in
book-entry form through the facilities of DTC, 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 or the Maturity Date (or the redemption date,
if applicable) falls on a day that is not a Business Day, the interest or
principal payment shall be made on the next day that
S-4
<PAGE> 5
is a Business Day, and no interest on such payment shall accrue for the period
from and after the Interest Payment Date (or the redemption date, if
applicable). Interest on the Notes will be computed on the basis of a 360-day
year of twelve 30-day months. As used herein, "Business Day" will mean each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a legal holiday for
banking institutions in any of the City of Wilmington, Delaware, the City of
Chicago, the City of New York, the City of Luxembourg, or the city in which the
principal corporate trust office of the Trustee is located.
Payments of principal will be made to DTC by wire transfer (or, if
Certificated Notes (as defined below) are issued, to holders of Certificated
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 Certificated
Notes are issued, to holders of Certificated Notes by check unless proper wire
transfer instructions are on file with the Trustee). If Certificated Notes are
issued, a holder of a Certificated Note may request that payments be made by
wire transfer to an account maintained by such holder at the offices of the
paying agent in Luxembourg.
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 March
20, 2003 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 March 20,
1998, 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.
S-5
<PAGE> 6
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:
(a) any such tax, assessment or other governmental charge that 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 that 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
S-6
<PAGE> 7
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 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.
MEETINGS OF HOLDERS
Meetings of Holders of the Notes may be called at any time to take any
action authorized to be taken by or on behalf of the Holders of any specified
aggregate principal amount of the Notes under any provision of the Indenture, or
authorized or permitted by law. Notice of such meetings shall be given as set
forth under "Notices" above.
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 Note Owners (as defined below) may hold their Notes through DTC
(in the United States) or Cedel or Euroclear (in Europe). The Notes initially
will be represented by one or more global notes (the "Global Notes") and
registered in the name of the nominee of DTC except as set forth below. 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 registered Holder of the Notes. The Notes will be available
for purchase in book-entry form in minimum denominations of $1,000 and integral
multiples thereof. Unless and until Certificated Notes (as defined below) are
issued under the limited circumstances described herein, no person acquiring the
Notes (a "Book-Entry Note Owner") will be entitled to receive a certificate
representing that person's interest in the Notes. All references herein to
actions by Holders will refer to actions taken by DTC upon instructions from its
Participants (as defined below), and all references herein or in the Prospectus
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 Note Owners in accordance with DTC procedures.
S-7
<PAGE> 8
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the 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. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others, such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
direct Participant, either directly or indirectly ("Indirect Participants"). The
Rules applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
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.
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 Note Owners that are not Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Notes may do so only through Participants and Indirect
Participants. In addition, Book-Entry Note Owners will receive all payments of
principal and interest from the Trustee through Participants and, if applicable,
Indirect Participants. Under a book-entry format, Book-Entry Note Owners may
experience some delay in their receipt of payments, because the payments will be
forwarded by the Trustee to Cede, as nominee for DTC. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Book-Entry Note Owners. It is anticipated that the only Holder
will be Cede, as nominee of DTC. Book-Entry Note Owners will not be recognized
by the Trustee as "Holders," as that term is used in the Indenture, and
Book-Entry Note Owners will only be permitted to exercise the rights of Holders
indirectly through DTC and its Participants.
S-8
<PAGE> 9
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 payments of principal of and interest on the Notes.
Participants and Indirect Participants with which Book-Entry Note 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 Note 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
Note Owner to pledge Notes to persons or entities that do not participate in the
DTC system, or otherwise take actions in respect of such Notes, may be limited
due to the lack of a physical certificate for such 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 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.
S-9
<PAGE> 10
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 depository. 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 depository's ability to effect such actions on its behalf
through DTC.
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.
CERTIFICATED NOTES
The Notes in fully registered certificated form ("Certificated Notes") will
be issued to Book-Entry Note Owners or their nominees, rather than to DTC or its
nominees only if (i) SRAC advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository 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 Participants of the
availability through DTC of Certificated Notes. Upon surrender by DTC of a
Global Note representing the Notes and instructions for re-registration, the
Trustee will issue the Notes in the form of Certificated Notes, and thereafter
the Trustee will recognize the registered holders of such Certificated 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 Note Owners. The
discussion
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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 (unless, in the case of a
partnership, future Treasury regulations otherwise provide) 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.
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 under the
"portfolio interest" exception of the Code as defined below, provided in the
case of interest that (i) the beneficial owner of the Note, or a partnership in
which the beneficial owner of the Note is a member, 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) the beneficial owner of the Note
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 SRAC or its agent can reliably
associate with the beneficial owner, which certifies that the beneficial owner
is not a United States Person and provides the beneficial owner's name and
address, (B) a securities clearing organization, bank (including, after December
31, 1998, certain regulated United States branches of a foreign bank or a
foreign insurance company) 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) after December 31, 1998, a specified
withholding partnership or qualified intermediary provides a duly completed
withholding certificate to SRAC or its agent and the withholding partnership or
qualified intermediary has received such a statement that it can reliably
associate with the beneficial owner. A statement described in this paragraph is
generally 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 (or, for statements provided after December 31, 1998,
the three) immediately succeeding calendar years.
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<PAGE> 12
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.
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.
Under temporary Treasury regulations currently effective, 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, 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 penalties of perjury that it is not a United States Person and
provides its name and address or otherwise establishes an exemption.
Under Treasury regulations effective January 1, 1999, in the case of
payments of principal of and interest on Notes after December 31, 1998, to
Holders who are not United States Persons that
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<PAGE> 13
qualify for the "portfolio interest" exception to United States withholding tax
as described in "United States Tax Considerations -- Foreign Holders -- U.S.
Withholding Tax" above, backup withholding and information reporting will not
apply, regardless of the identity of the payor and regardless of whether the
payment is collected by a United States or foreign office of a custodian,
nominee or other agent acting on behalf of the Holders.
Under Treasury regulations currently effective, 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 penalties of perjury that it is not a United States Person and
provides its name and address or otherwise establishes an exemption.
Under Treasury regulations effective January 1, 1999, 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 that is a "U.S. payor" or a "U.S.
middleman" (including a person who is a United States Person, a controlled
foreign corporation for United States federal income tax purposes, a foreign
partnership if at any time during the year it is either more than 50% owned by
United States Persons or engaged in a United States trade or business, 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) will be subject to information
reporting and, except in certain cases, backup withholding, 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 has no actual knowledge or reason to believe that
such evidence is unreliable.
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
(the "Code"), 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.
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. ................................ $ 370,000,000
J.P. Morgan Securities Inc. ......................... 370,000,000
Bear, Stearns International Limited.................. 65,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated... 65,000,000
Morgan Stanley & Co. International Limited........... 65,000,000
Salomon Brothers Inc ................................ 65,000,000
--------------
Total............................................. $1,000,000,000
==============
</TABLE>
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<PAGE> 14
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
0.20% of the principal amount of the Notes. 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.
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 that 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.
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<PAGE> 15
USE OF PROCEEDS
The net proceeds of U.S. $989,920,000 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 auditors 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
November 8, 1996 and December 22, 1997.
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 the Company since January 3, 1998
and (b) there is no pending litigation against the Company that is not disclosed
herein or in the documents incorporated by reference that 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 8557551 and an ISIN number of US812404BC47.
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> 16
SEARS ROEBUCK ACCEPTANCE CORP.
DEBT SECURITIES
------------------------------
Sears Roebuck Acceptance Corp. ("SRAC") from time to time may offer up to
$3,547,200,000 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
SECURITIES 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 March 13, 1998.
<PAGE> 17
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> 18
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 January 3, 1998 filed by
SRAC and Sears and the Current Reports on Form 8-K for January 22 and February
18, 1998 filed by Sears and for January 8 and February 23, 1998 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 (I) 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, FINANCE
(302/888-3100).
3
<PAGE> 19
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 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 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 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."
As of February 28, 1998, SRAC had eight 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 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> 20
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of
SRAC for the five fiscal years ended January 3, 1998. The summary information
should be read in conjunction with the financial statements of SRAC and the
notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Operating Results
Total revenues................................ $ 960 $ 689 $ 510 $ 283 $ 338
Interest and related expenses................. 763 546 405 219 236
Total expenses................................ 767 548 407 221 277
Income taxes.................................. 68 49 36 22 21
Net income.................................... 125 92 67 40 40
Financial Position
Assets
Notes of Sears.............................. $16,561 $11,609 $8,397 $6,843 $ 3,404
Receivable balances purchased from Sears.... 89 76 81 82 88
Total assets................................ 16,716 12,004 8,635 7,031 4,146
Liabilities
Commercial paper............................ $ 5,249 $ 3,324 $4,451 $4,913 $ 2,475
Agreements with bank trust departments...... -- 82 137 87 140
Intermediate-term loans..................... 50 715 895 845 --
Medium-term notes........................... 6,033 4,834 1,384 -- --
Discrete underwritten debt.................. 3,099 1,298 499 -- --
Loan agreements with Sears Overseas Finance,
N.V. .................................... -- -- -- -- 380
Total liabilities........................... 14,554 10,317 7,390 5,854 3,008
Sears investment in SRAC
Capital stock (including capital in excess
of par value)............................... $ 735 $ 385 $ 35 $ 35 $ 35
Retained income............................. 1,427 1,302 1,210 1,143 1,103
Debt as percentage of equity.................. 667% 608% 592% 496% 263%
Other Pertinent Data
Commercial paper
Average daily outstandings.................. $ 3,952 $ 4,388 $4,963 $3,615 $ 3,812
Agreements with bank trust departments
Average daily outstandings.................. 55 98 154 124 402
Contractual credit facilities (year-end)...... 5,540 5,000 5,720 5,132 4,200
</TABLE>
5
<PAGE> 21
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for SRAC for the years ended January
3, 1998, December 28, 1996, December 30, 1995, and December 31, 1994 and 1993
was 1.25, 1.26, 1.26, 1.29 and 1.26, 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 years ended January 3, 1998, December 28, 1996, December
30, 1995, and December 31, 1994 and 1993 was 2.34, 2.40, 2.15, 2.06 and 1.66,
respectively. 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, 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 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
6
<PAGE> 22
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)
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
7
<PAGE> 23
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 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
8
<PAGE> 24
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 Xl)
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> 25
PLAN OF DISTRIBUTION
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
Securities 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 that 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 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports incorporated by reference herein. Such financial
statements have been incorporated by reference in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
10
<PAGE> 26
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY
SEARS ROEBUCK ACCEPTANCE CORP.
3711 KENNETT PIKE
GREENVILLE, DELAWARE 19807
INDEPENDENT AUDITORS TO THE COMPANY
DELOITTE & TOUCHE LLP
Two Prudential Plaza
180 North Stetson Avenue
Chicago, Illinois 60601
1700 Market Street
Philadelphia, Pennsylvania 19103
LEGAL ADVISERS
To the Company
BAKER & MCKENZIE
Special Tax Counsel
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
NANCY K. BELLIS
Assistant General Counsel
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
LATHAM & WATKINS
5800 Sears Tower
Chicago, Illinois 60606
To the Underwriters
CLEARY, GOTTLLEB, 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.
5 rue Plaetis
L-2338 Luxembourg
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, NY 10001-2697
LISTING AGENT
BANQUE GENERALE DU LUXEMBOURG, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
<PAGE> 27
================================================================================
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>
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-15
Legal Opinions........................... S-15
Listing and General Information.......... S-15
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>
$1,000,000,000
SEARS ROEBUCK
ACCEPTANCE CORP.
6% NOTES DUE
MARCH 20, 2003
------------------------
PROSPECTUS SUPPLEMENT
------------------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
BEAR, STEARNS INTERNATIONAL LIMITED
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
================================================================================
