<PAGE> 1
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT AN
OFFER TO SELL THESE SECURITIES IN ANY STATE AND SRAC IS NOT SOLICITING OFFERS TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Issued April 28, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 23, 1999)
$750,000,000
SEARS ROEBUCK ACCEPTANCE CORP.
% NOTES DUE , 2009
------------------------
Sears Roebuck Acceptance Corp., or "SRAC," and the Underwriters will offer
the Notes for sale in the United States and Europe.
SRAC will pay interest on the Notes semiannually on and of
each year, commencing on , 1999. SRAC may not redeem the Notes before
, 2009 except for tax reasons. If SRAC redeems the Notes for tax reasons,
SRAC will pay you 100% of the principal amount of your Notes plus accrued
interest. If SRAC redeems any of the Notes, it must redeem all of the Notes.
SRAC will issue the Notes as global Notes registered in the name of the
nominee for The Depository Trust Company, or "DTC." DTC and its participants,
including the depositaries for Cedelbank and the Euroclear System, will record
your interest in the Notes in their records. You may only transfer your interest
in the Notes through DTC and its participants. SRAC will not issue Notes to you
in certificated form except as described in this prospectus supplement under the
heading "Book-Entry Registration." You may purchase Notes in denominations of
$1,000 and integral multiples of $1,000.
SRAC has applied to list the Notes on the Luxembourg Stock Exchange, in
accordance with the rules of the Luxembourg Stock Exchange, to facilitate
trading in non-U.S. markets.
------------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price(1).......................... % $
Underwriting Discount............................. % $
Proceeds, before expenses, to SRAC................ % $
</TABLE>
(1) You must pay accrued interest from , 1999, if settlement
occurs after that date.
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have these organizations
determined if this prospectus supplement or the prospectus is accurate and
complete. Any representation to the contrary is a criminal offense.
SRAC and the Underwriters expect to deliver the Notes in book-entry form
only through the facilities of DTC, Cedelbank and Euroclear, on or about
, 1999.
------------------------
JOINT BOOKRUNNERS
GOLDMAN, SACHS & CO. J.P. MORGAN & CO.
------------------------
The date of this prospectus supplement is , 1999.
<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Financial Information....................................... S-4
Financial Changes........................................... S-4
Capitalization of Sears Roebuck Acceptance Corp............. S-5
The Notes................................................... S-5
Redemption for Tax Reasons................................ S-6
Tax Gross Up.............................................. S-7
Notices................................................... S-8
Meeting of Holders........................................ S-8
Governing Law............................................. S-8
Book-Entry Registration..................................... S-8
The Depository Trust Company.............................. S-9
Cedelbank................................................. S-9
The Euroclear System...................................... S-10
Book-Entry Format......................................... S-11
Transfers within and among Book-Entry Systems............. S-11
Same-Day Settlement and Payment........................... S-12
Certificated Notes........................................ S-12
United States Tax Considerations............................ S-12
United States Holders..................................... S-13
Definition of a United States Holder................... S-13
Payments of Interest................................... S-13
Sale, Redemption or other Disposition of Notes......... S-13
Foreign Holders........................................... S-13
U.S. Withholding Tax................................... S-13
U.S. Income Tax........................................ S-14
U.S. Estate Tax........................................ S-15
Backup Withholding and Information Reporting.............. S-15
General Rules.......................................... S-15
Exceptions Applicable to Non-United States Persons and
Exempt Recipients..................................... S-15
Underwriting................................................ S-17
Conditions................................................ S-17
Terms..................................................... S-17
Stabilization............................................. S-17
Indemnification........................................... S-17
Expenses.................................................. S-18
Listing................................................... S-18
Representations........................................... S-18
Stamp Taxes............................................... S-18
</TABLE>
S-2
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Other Information......................................... S-18
Use of Proceeds............................................. S-18
Legal Opinions.............................................. S-18
Listing and General Information............................. S-18
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
General Terms............................................. 6
Certain Restrictions...................................... 8
Defaults.................................................. 8
Modification or Amendment of the Indenture................ 9
Defeasance................................................ 9
Termination of Certain Obligations..................... 9
Discharge of the Indenture............................. 10
Regarding the Trustee..................................... 11
Plan of Distribution........................................ 11
Legal Opinion............................................... 11
Experts..................................................... 12
</TABLE>
SRAC has warranted to the Underwriters that this prospectus supplement and
the prospectus do not contain any untrue statement of a material fact or omit
any material fact necessary to make the statements in this prospectus supplement
and the prospectus not misleading in light of the circumstances under which
these statements were made. SRAC has taken all reasonable care to ascertain the
facts and to verify the accuracy of these statements. SRAC accepts
responsibility accordingly.
SRAC and the Underwriters have agreed that they will close the sale of the
Notes to the Underwriters five business days after the date of this prospectus
supplement.
S-3
<PAGE> 4
FINANCIAL INFORMATION
The following table contains summary financial information regarding SRAC
for the fiscal years ended January 2, 1999, and January 3, 1998. You should read
this summary information in conjunction with SRAC's financial statements that
are incorporated by reference in the prospectus.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------
JANUARY 2, 1999 JANUARY 3, 1998
--------------- ---------------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C>
Operating Results
Total revenues.............................................. $ 1,234 $ 960
Interest expense and amortization of debt
discount/premium.......................................... 979 763
Total expenses.............................................. 983 767
Income taxes................................................ 88 68
Net income.................................................. 163 125
Financial Position
Assets
Notes of Sears, Roebuck and Co. .......................... $17,990 $16,561
Receivable balances purchased from Sears, Roebuck and
Co. ................................................... 90 89
Total assets.............................................. $18,247 $16,716
Liabilities
Commercial paper.......................................... $ 4,243 $ 5,249
Intermediate-term loans................................... -- 50
Medium-term notes......................................... 5,976 6,033
Discrete underwritten debt................................ 5,084 3,099
Total liabilities......................................... $15,472 $14,554
Stockholder's Equity
Capital stock (including capital in excess of par
value)................................................. $ 1,185 $ 735
Retained income........................................... 1,590 1,427
Total stockholder's equity................................ $ 2,775 $ 2,162
Other Pertinent Data
Contractual credit facilities (period end).................. 6,100 5,540
</TABLE>
FINANCIAL CHANGES
This discussion compares SRAC's financial results for the fiscal year ended
January 2, 1999, which is referred to below as the "current period," with its
results for the fiscal year ended January 3, 1998, which is referred to below as
the "prior period."
SRAC generated revenues of $1,234 million during the current period. This
is an increase of 29% from the $960 million in revenues it generated during the
prior period. SRAC attributes the increase in revenue to a $4.2 billion increase
in SRAC's average earning assets in the current period over the prior period.
Average earning assets increased in response to the funding requirements of
SRAC's parent company, Sears, Roebuck and Co.("Sears").
SRAC incurred $979 million in interest and related expenses during the
current period. This is an increase of 28% from the $763 million SRAC incurred
during the prior period. SRAC attributes most of this increase in interest and
related expenses to increases in its average long-term debt. SRAC's average
long-term debt of $10.6 billion in the current period reflects an increase of
34% over its average long-term debt of $7.9 billion in the prior period. SRAC's
average short-term borrowings also increased in the current period to $4.5
billion from $4.0 billion during the prior period. During the current period,
SRAC's cost of short-term funds averaged 5.58%, while it averaged 5.60% during
the prior period.
S-4
<PAGE> 5
SRAC's net income of $163 million for the current period is a 30% increase
over its net income of $125 million for the prior period. SRAC's ratio of
earnings to fixed charges for the current period was 1.26 compared to 1.25 for
the prior period.
CAPITALIZATION OF SEARS ROEBUCK ACCEPTANCE CORP.
The following table sets forth SRAC's capitalization as of January 2, 1999
and as adjusted to reflect the issuance of the Notes, assuming that SRAC uses
the net proceeds of $ that SRAC will receive from issuing the Notes to
retire short-term debt.
<TABLE>
<CAPTION>
JANUARY 2, 1999
--------------------------
AS
OUTSTANDING ADJUSTED
------------- ----------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C>
Debt payable within one year(1)............................. $ 4,243 $
Term debt................................................... 11,060
Stockholder's equity(2)..................................... 2,775
------- -------
Total capitalization(3)..................................... $18,078
======= =======
</TABLE>
- ---------------
(1) "Debt payable within one year" excludes the current portion of term debt,
which the table includes under "Term debt."
(2) SRAC has 500,000 authorized shares of common stock at a par value of $100.
SRAC had 350,000 shares of common stock outstanding as of January 2, 1999.
(3) SRAC's capitalization has not changed materially since January 2, 1999.
THE NOTES
The following description supplements the "Description of Debt Securities"
in the prospectus.
SRAC will issue the Notes under the indenture dated as of May 15, 1995,
between SRAC and The Chase Manhattan Bank. SRAC has filed a copy of the
indenture with the Securities and Exchange Commission. The indenture is
incorporated into this prospectus supplement and the prospectus by reference.
The Notes will be direct, unsecured and unsubordinated obligations of SRAC, and
will rank equally with all of SRAC's other unsecured and unsubordinated debt.
The Notes will mature on , 2009, at par and will constitute a
single series of debt securities under the indenture. SRAC will issue the Notes
in fully registered book-entry form only, without coupons, in denominations of
$1,000 and integral multiples of $1,000. Each Note will bear interest at the
rate of % per year. SRAC will pay the interest semiannually on and
of each year, commencing , 1999, to the registered
holder of the Note at the close of business on the date fifteen days before the
interest payment date. SRAC will pay $ of interest on each $1,000 Note
on , 1999 for the period from and including , 1999 to
and excluding , 1999. As long as the Notes are held through the
facilities of DTC, Cedelbank and the Euroclear System, solely in book-entry
form, the only registered holder of the Notes will be DTC's nominee, Cede & Co.
If an interest payment date or the maturity date of the Notes is not a
business day, SRAC will pay interest or principal on the next business day.
However, interest on the payment will not accrue for the period from the
original interest payment date (or maturity date) to the date SRAC makes the
payment. SRAC will calculate the interest based on a 360-day year of twelve
30-day months. (A "business day" is a Monday, Tuesday, Wednesday, Thursday or
Friday that is not a legal holiday for banking institutions in the City of
Wilmington, Delaware, the City of Chicago, the City of New York, the City of
Luxembourg, or the city in which the trustee's principal corporate trust office
is located.)
SRAC will pay interest on the Notes to DTC by wire transfer on the interest
payment dates. SRAC will pay the principal of the Notes to DTC by wire transfer
if DTC presents and surrenders the
S-5
<PAGE> 6
Notes on or before the redemption or maturity date of the Notes. If you hold
Notes in certificated form, SRAC will pay the interest and principal on your
Notes to you by check unless you have given proper wire transfer instructions to
the trustee. If you hold Notes in fully certificated form, you may request that
payments be made by wire transfer to an account you maintain at the offices of
the paying agent in Luxembourg. See "Book-Entry Registration -- Certificated
Notes" for further information on holding Notes in certificated form.
SRAC has initially appointed the trustee at its corporate trust office in
New York City and Chase Manhattan Bank Luxembourg S.A., 5 rue Plaetis, L-2338
Luxembourg as paying agents. SRAC may terminate the appointment of a paying
agent at any time. SRAC may also appoint additional or other paying agents at
any time. For as long as SRAC lists the Notes on the Luxembourg Stock Exchange
and the rules of the Luxembourg Stock Exchange require SRAC to maintain a paying
agency in Luxembourg for payments on the Notes, SRAC will comply with these
rules. SRAC will give notice of any termination or appointment of a paying agent
or any change in a paying agent's office as described below under the heading
"Notices."
REDEMPTION FOR TAX REASONS
SRAC may not redeem your Notes before they mature on , 2009,
except for the tax reasons described below. If SRAC does not redeem your Notes,
SRAC will pay your Notes in full on , 2009.
SRAC may redeem your Notes if a change in the U.S. tax laws results in a
substantial probability that:
- it will have to pay additional amounts to certain foreign holders of the
Notes, as described below under the heading "Tax Gross Up"; and
- it cannot avoid making these payments by taking reasonable measures
available to it.
A change in the U.S. tax laws includes:
- any change in or amendment to the laws of the United States, any
political subdivision of the United States or any taxing authority within
the United States, or regulations or rulings promulgated under those
laws;
- any change in the way those laws, rulings or regulations are interpreted,
applied or enforced;
- any action taken by a taxing authority that applies to SRAC;
- any court decision; or
- any technical advice memorandum, letter ruling or administrative
pronouncement issued by the United States Internal Revenue Service, based
on a fact pattern substantially similar to SRAC's.
SRAC may only redeem your Notes if it:
- delivers to the trustee a legal opinion stating that SRAC may exercise
its right to redeem the Notes and a certificate giving the factual basis
for the legal opinion;
- gives notice, as described below under the heading "Notices," not less
than 30 nor more than 60 days before the date SRAC will redeem the Notes;
and
- pays you 100% of the principal amount of your Notes plus accrued
interest.
S-6
<PAGE> 7
TAX GROSS UP
If, for United States federal income tax purposes, you are:
- a foreign corporation;
- a nonresident alien individual;
- a nonresident alien fiduciary of a foreign estate or trust; or
- a foreign partnership with at least one partner that is a foreign
corporation (as to the United States), a nonresident alien individual or
a nonresident alien fiduciary of a foreign estate or trust;
then SRAC will pay you additional amounts as necessary to make every net payment
of principal or interest on your Notes, after deduction or withholding relating
to any present or future tax, assessment or governmental charge imposed by the
United States (or any political subdivision or taxing authority of the United
States), equal to the amount then due and payable on your Notes. However, SRAC
will not pay you any additional amounts for or on account of:
- any tax, assessment or other governmental charge imposed because you, or
any of your fiduciaries, settlors or beneficiaries, partners or
shareholders or persons holding power over you, have or have had a
connection with the United States, such as
(A) being or having been a citizen or resident of the United States;
(B) being or having been present in the United States for 183 days or more
in a taxable year;
(C) being or having been engaged in a trade or business in the United
States; or
(D) having, or having had, a permanent establishment in the United States;
- any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or other governmental charge;
- any tax, assessment or other governmental charge imposed because of your
past or present status as
(A) a personal holding company;
(B) a foreign personal holding company (with respect to the United
States);
(C) a controlled foreign corporation (with respect to the United States);
(D) a passive foreign investment company (with respect to the United
States);
(E) a private foundation;
(F) a tax exempt organization; or
(G) a corporation that accumulates earnings to avoid United States federal
income tax;
- any tax, assessment or governmental charge that is payable in a manner
other than through withholding from the principal or interest payments on
your Notes;
- any tax, assessment or governmental charge that a paying agent must
withhold from the interest and principal payments on your Notes, if
another paying agent can make the interest or principal payments on the
Notes without withholding;
- any tax, assessment or governmental charge imposed because you failed to
fulfill any of the reporting, certification, taxpayer identification or
other requirements that would have exempted you from the tax;
S-7
<PAGE> 8
- any tax, assessment or governmental charge imposed because you, or a
partnership you are a member of, actually or constructively own ten
percent or more of the combined voting power of all classes of SRAC's
stock entitled to vote;
- any tax, assessment or governmental charge imposed on any holder that is
a fiduciary, a partnership or not the sole beneficial owner, but only to
the extent that any beneficiary, settlor, partner or beneficial owner, as
applicable, would not have been entitled to additional amounts; or
- any tax, assessment or governmental charge imposed on or resulting from
any combination of the above.
"United States" means the United States of America and any area subject to
its jurisdiction.
NOTICES
The trustee will mail notices by first class mail, postage prepaid, to each
registered holder's last known address as it appears in the security register
that the trustee maintains. The trustee will only mail these notices to Cede &
Co., as the registered holder of the Notes, unless SRAC reissues the Notes to
you or your nominees in fully certificated form, as explained below under the
heading "Book-Entry Registration -- Certificated Notes."
In addition, as long as:
- the Notes are listed on the Luxembourg Stock Exchange; and
- the rules of the Luxembourg Stock Exchange require notice by publication;
the trustee will publish notices regarding the Notes in a daily newspaper of
general circulation in Luxembourg. SRAC expects that this newspaper will be the
Luxemburger Wort. If publication in Luxembourg is not practical, the trustee
will publish these notices elsewhere in Europe. Published notices will be deemed
to have been given on the date they are published. If publication as described
above becomes impossible, then the trustee may publish sufficient notice by
alternate means that approximate the terms and conditions described in this
paragraph.
MEETING OF HOLDERS
Either the trustee or registered holders of a majority of the aggregate
principal amount of the Notes may call a meeting of the Note holders at any
time. These meetings may be for any purpose stated in the indenture or
authorized by law. The trustee will give notice of the meetings in the manner
described above under the heading "Notices." You will not be entitled to call
these meetings or to vote at them unless SRAC reissues the Notes to you or your
nominees in fully certificated form, as explained below under the heading
"Book-Entry Registration -- Certificated Notes."
GOVERNING LAW
The laws of the State of Delaware will govern the indenture and the Notes.
BOOK-ENTRY REGISTRATION
SRAC has obtained the information in this section concerning DTC, Cedelbank
and Euroclear and their book-entry systems and procedures from sources that SRAC
believes to be reliable, but SRAC takes no responsibility for the accuracy of
this information.
SRAC will initially issue the Notes in registered form only, without
coupons, as book-entry Notes represented by one or more global Notes registered
in the name Cede & Co., as the nominee for DTC. You may purchase Notes in
book-entry form in minimum denominations of $1,000 and integral multiples of
$1,000.
S-8
<PAGE> 9
You may hold your Notes in the United States through DTC or in Europe
through Cedelbank or Euroclear. Cedelbank and Euroclear will hold omnibus
positions on behalf of their respective participating organizations or
customers, through customers' securities accounts in Cedelbank's and Euroclear's
names on the books of their respective depositaries (the "Depositaries") which
in turn will hold those positions in customers' securities accounts in the
Depositaries' names on the books of DTC.
Unless and until SRAC issues the Notes in fully certificated form under the
limited circumstances described below under the heading "Book-Entry
Registration -- Certificated Notes":
- you will not be entitled to receive a certificate representing your
interest in the Notes;
- all references in this prospectus supplement or in the prospectus to
actions by holders will refer to actions taken by DTC upon instructions
from its Direct Participants (as defined below); and
- all references in this prospectus supplement or the prospectus to
payments and notices to holders will refer to payments and notices to DTC
or Cede & Co., as the registered holder of the Notes, for distribution to
you in accordance with DTC procedures.
THE DEPOSITORY TRUST COMPANY
DTC is:
- a limited-purpose trust company organized under the New York Banking Law;
- a "banking organization" under the New York Banking Law;
- a member of the Federal Reserve System;
- a "clearing corporation" under the New York Uniform Commercial Code; and
- a "clearing agency" registered under the provision of Section 17A of the
Securities Exchange Act of 1934.
DTC holds securities that its Direct Participants deposit with DTC. DTC
also facilitates the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Direct Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" of DTC include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations.
"Indirect Participants," such as securities brokers and dealers, banks and trust
companies, can also access the DTC system if they maintain a custodial
relationship with a Direct Participant. If you are not a Direct Participant or
an Indirect Participant and you wish to purchase, sell or otherwise transfer
ownership of, or other interests in, Notes, you must do so through a Direct
Participant or an Indirect Participant. 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. The
Securities and Exchange Commission has on file a set of the rules applicable to
DTC and its Direct Participants.
CEDELBANK
Cedelbank was incorporated as a limited company under Luxembourg law. Cedel
International, societe anonyme, owns Cedelbank. Cedel International's
shareholders are banks, securities dealers and financial institutions. Cedel
International currently has approximately 100 shareholders, including U.S.
financial institutions or their subsidiaries. No single entity may own more than
twenty percent of Cedel International's stock.
Cedelbank holds securities for its customers and facilitates the clearance
and settlement of securities transactions between Cedelbank customers through
electronic book-entry changes in
S-9
<PAGE> 10
accounts of Cedelbank customers, thus eliminating the need for physical movement
of certificates. Cedelbank provides to its customers, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Cedelbank interfaces with domestic markets in over 30 countries. Cedelbank has
established an electronic bridge with Morgan Guaranty Trust Company of New York,
the operator of the Euroclear System, to facilitate settlement of trades between
Cedelbank and Euroclear. Cedelbank currently accepts over 110,000 securities
issues on its books.
As a registered bank in Luxembourg, Cedelbank is subject to regulation by
the Luxembourg Commission for the Supervision of the Financial Sector. Cedelbank
customers are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies and
clearing corporations. Currently, Cedelbank has approximately 2,000 customers
located in over 80 countries, including all major European countries, Canada and
the United States. In the United States, Cedelbank customers are limited to
securities brokers and dealers. Cedelbank customers may include the
Underwriters. Other institutions that maintain a custodial relationship with a
Cedelbank customer may obtain indirect access to Cedelbank. Cedelbank is an
Indirect Participant in DTC.
THE EUROCLEAR SYSTEM
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-entry
delivery against payment, thus eliminating the need for physical movement of
certificates and 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 below. The Euroclear System is operated by Morgan Guaranty Trust
Company of New York through its Brussels, Belgium office (the "Euroclear
Operator"), under contract with Euroclear Clearance System, S.C., a Belgian
cooperative corporation (the "Cooperative"). The Euroclear Operator conducts all
operations, 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.
Euroclear is an Indirect Participant in DTC.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. The Board of
Governors of the Federal Reserve System, the New York State Banking Department
and the Belgian Banking Commission regulate and examine the Euroclear Operator.
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") govern securities clearance accounts
and cash accounts with the Euroclear Operator. Specifically, 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
S-10
<PAGE> 11
and Conditions only on behalf of Euroclear participants and has no record of or
relationship with persons holding securities through Euroclear participants.
BOOK-ENTRY FORMAT
Under the book-entry format, the trustee will pay interest or principal to
Cede & Co., as nominee of DTC. DTC will forward the payment to the Direct
Participants, who will then forward the payment to the Indirect Participants
(including Cedelbank or Euroclear) or to you as the beneficial owner. You may
experience some delay in receiving your payments under this system.
DTC is required to make book-entry transfers on behalf of its Direct
Participants and is required to receive and transmit payments of principal,
premium, if any, and interest on the Notes. Any Direct Participant or Indirect
Participant with which you have an account is similarly required to make book-
entry transfers and to receive and transmit payments with respect to the Notes
on your behalf.
The trustee will not recognize you as a holder under the indenture, and you
can only exercise the rights of a holder indirectly through DTC and its Direct
Participants. DTC has advised SRAC that it will only take action regarding a
Note if one or more of the Direct Participants to whom the Note is credited
direct DTC to take such action. DTC can only act on behalf of its Direct
Participants. Your ability to pledge Notes to non-Direct Participants, and to
take other actions, may be limited because you will not possess a physical
certificate that represents your Notes. Cedelbank or Euroclear will credit
payments to the cash accounts of Cedelbank customers or Euroclear participants
in accordance with the relevant system's rules and procedures, to the extent
received by its Depositary. These payments will be subject to tax reporting in
accordance with relevant United States tax laws and regulations. Cedelbank 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 Cedelbank customer or
Euroclear participant only in accordance with its relevant rules and procedures
and subject to its Depositary's ability to effect those actions on its behalf
through DTC.
DTC, Cedelbank and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of the Notes among participants of DTC, Cedelbank
and Euroclear. However, they are under no obligation to perform or continue to
perform those procedures, and they may discontinue those procedures at any time.
TRANSFERS WITHIN AND AMONG BOOK-ENTRY SYSTEMS
Transfers between DTC's Direct Participants will occur in accordance with
DTC rules. Transfers between Cedelbank customers and Euroclear participants will
occur in accordance with their applicable rules and operating procedures.
DTC will effect cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or indirectly through
Cedelbank customers or Euroclear participants, on the other hand, in accordance
with DTC rules on behalf of the relevant European international clearing system
by its Depositary. However, cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in that 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, instruct its Depositary 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. Cedelbank customers and Euroclear participants may not deliver instructions
directly to the Depositaries.
Because of time-zone differences, credits of securities in Cedelbank or
Euroclear resulting from a transaction with a DTC Direct Participant will be
made during the subsequent securities settlement processing, dated the business
day following the DTC settlement date. Those credits or any transactions in
those securities settled during that processing will be reported to the relevant
S-11
<PAGE> 12
Cedelbank customer or Euroclear participant on that business day. Cash received
in Cedelbank or Euroclear as a result of sales of securities by or through a
Cedelbank customer or a Euroclear participant to a DTC Direct Participant will
be received with value on the DTC settlement date but will be available in the
relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC.
SAME-DAY SETTLEMENT AND PAYMENT
The Underwriters will settle the Notes in immediately available funds. SRAC
will make principal and interest payments on the Notes in immediately available
funds or the equivalent. Secondary market trading between DTC Direct
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 Cedelbank customers and Euroclear participants
will occur in accordance with the applicable rules and operating procedures of
Cedelbank and Euroclear and will be settled using the procedures applicable to
conventional eurobonds in immediately available funds.
CERTIFICATED NOTES
SRAC will re-issue Notes to you or your nominees, in fully certificated
registered form, rather than to DTC or its nominees, only if:
- SRAC advises the trustee in writing that DTC is no longer willing or able
to discharge its responsibilities properly, and the trustee or SRAC is
unable to locate a qualified successor; or
- SRAC, at its option, elects to terminate the book-entry system through
DTC.
If either of the two above events occurs, DTC is required to notify all
Direct Participants that Notes in fully certificated registered form are
available through DTC. DTC will then surrender the global note representing the
Notes along with instructions for re-registration. The trustee will re-issue the
Notes in fully certificated registered form and will recognize the registered
holders of the certificated Notes as holders under the indenture.
UNITED STATES TAX CONSIDERATIONS
The following summary of the principal United States federal income tax
consequences of purchasing, owning and disposing of Notes applies to you only if
you are the initial holder of the Notes and you acquire them for a price equal
to the initial issue price of the Notes.
This summary is based upon the opinion of Baker & McKenzie, SRAC's special
United States federal income tax counsel. For purposes of this summary, with
respect to book-entry Notes, the term "holder" refers to you if you acquire a
beneficial ownership interest in those Notes through the book-entry systems of
DTC, Cedelbank and/or Euroclear, and with respect to certificated Notes, the
term "holder" refers to you if those Notes are registered in your name or the
name of your nominee. This summary deals only with Notes held as capital assets
and does not deal with special tax situations such as:
- dealers in securities or currencies or traders in securities who elect
mark-to-market accounting for United States federal income tax purposes;
- United States holders (as defined below) whose functional currency is not
the United States dollar; or
- persons holding Notes as part of a larger integrated financial
transaction.
This summary is based on United States federal income tax law, including
the United States Internal Revenue Code of 1986, as amended (the "Code") as of
the date of this prospectus supplement. Subsequent developments in United States
federal income tax law, which may be
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<PAGE> 13
applied retroactively, could have a material effect on the United States federal
income tax consequences of purchasing, owning and disposing of Notes as set
forth in this summary. Before you purchase Notes, you should consult your own
tax advisor about how the United States federal income tax law or any other
laws, including the laws of any other taxing jurisdiction, will apply to your
particular situation.
UNITED STATES HOLDERS
The following summary applies to you only if you are a United States holder
(as defined below).
DEFINITION OF A UNITED STATES HOLDER
A "United States holder" is a holder of Notes who is, or which is, a United
States person. A United States person is:
- a citizen or resident of the United States;
- a corporation or partnership organized under the laws of the United
States or of any State (unless, in the case of a partnership, future
Treasury regulations otherwise provide);
- an estate, the income of which is subject to United States federal income
taxation regardless of the source of that income; or
- a trust, if a United States court is able to exercise primary supervision
over the trust's administration and one or more United States persons has
the authority to control all of the trust's substantial decisions.
PAYMENTS OF INTEREST
Your interest on your Notes will be taxed as ordinary interest income. In
addition:
- if you use the cash method of accounting for tax purposes, you will be
taxed on the interest on your Notes at the time it is paid to you; and
- if you use the accrual method of accounting for tax purposes, you will be
taxed on the interest on your Notes at the time it accrues.
SALE, REDEMPTION OR OTHER DISPOSITION OF NOTES
Your tax basis in your Notes will be their U.S. dollar cost. You will
recognize capital gain or loss when you sell or otherwise dispose of your Notes,
or SRAC redeems your Notes, equal to the difference between:
- the amount realized on the sale or redemption or other disposition (less
any amount attributable to accrued interest, which will be taxable as
such); and
- your tax basis in the Notes.
Your gain or loss will be a long-term capital gain or loss if at the time of the
sale, payment or other disposition, you have held the Notes for more than one
year.
FOREIGN HOLDERS
The following summary applies to you if you are not a United States holder
(as defined above) and not a resident of a territory of the United States or
other area subject to its jurisdiction.
U.S. WITHHOLDING TAX
Under current United States federal income tax laws, and subject to the
discussion below, United States federal withholding tax will not apply to
payments by SRAC or any paying agent of
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<PAGE> 14
SRAC (in its capacity as such) of principal of and interest on your Notes in
accordance with the "portfolio interest" exception of the Code, provided:
- you, or a partnership you are a member of, do not actually or
constructively own ten percent or more of the total combined voting power
of all classes of the stock of SRAC entitled to vote;
- you are not a controlled foreign corporation for United States tax
purposes with respect to which SRAC is a "related person" as defined
under the Code; and
- you provide a signed written statement, under penalties of perjury, that
can reliably be related to you, certifying that you are not a United
States person and providing your name and address to:
(A) SRAC or its agent;
(B) a securities clearing organization, bank (including, after December
31, 1999, 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"), if that institution:
- holds the Notes on your behalf;
- provides an intermediary certificate to SRAC or its agent under
penalties of perjury confirming that the institution (or a
Financial Institution between you and the institution) has received
your signed written statement; and
- furnishes a copy of your signed written statement to SRAC or its
agent; or
(C) after December 31, 1999, a specified withholding partnership or
qualified intermediary that provides a duly completed withholding
certificate to SRAC or its agent.
Your signed written statement will be generally effective only with respect
to interest payments made to you after you signed the statement in the
calendar year in which you sign it and the two (or, for statements provided
after December 31, 1999, the three) immediately following calendar years.
U.S. INCOME TAX
Except for the possible application of United States withholding tax (see
"United States Tax Considerations -- Foreign Holders -- U.S. Withholding Tax"
above) and backup withholding tax (see "United States Tax
Considerations -- Backup Withholding and Information Reporting" below), you will
not have to pay United States federal income tax on payments of principal and
interest on your Notes, or on gains from the sale, redemption or other
disposition of your Notes, provided you (or the fiduciary, settlor, or
beneficiary of, or a person holding a power over you, if you are an estate or
trust; or any of your partners, if you are a partnership):
- are not and have not been engaged in a trade or business in the United
States;
- do not have and have not had a permanent establishment in the United
States;
- do not have and have not had a present or former connection with the
United States, including, without limitation, the status as a citizen or
former citizen or resident or former resident of the United States; and
- are not and have not been, for United States federal income tax purposes
(i) a personal holding company, (ii) a corporation that accumulates
earnings to avoid United States federal income tax, or (iii) a person
treated as making an election that subjects your payments of principal
and interest on your Notes to United States federal income tax.
S-14
<PAGE> 15
However, if you are an individual and are present in the United States for
183 days or more during the taxable year of the sale or other disposition of
your Notes, any gain you realize on the sale or other disposition may be subject
to a 30% United States federal income tax if your gain is attributable to an
office or fixed place of business in the United States or you have a tax home in
the United States.
If you are engaged in a trade or business in the United States and
interest, gain or any other income in respect of your Notes is effectively
connected with the conduct of your trade or business, you may be subject to
United States income tax on the interest, gain or income even though it is
exempt from the withholding tax discussed in the preceding paragraphs. You will
have to pay this income tax at the statutory rates provided for United States
persons after you deduct any deductible expenses allocable to your effectively
connected interest, gain or income. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to 30% of your
effectively connected earnings and profits for the taxable year, as adjusted for
certain items, unless a lower rate applies to you under a United States income
tax treaty with your country of residence. For this purpose, you must include
interest, gain or income on your Notes in the earnings and profits subject to
the branch tax if these amounts are effectively connected with the conduct of
your United States trade or business.
U.S. ESTATE TAX
If you are an individual and are not a citizen or resident of the United
States at the time of your death, your Notes will generally not be subject to
the United States federal estate tax, unless:
- you actually or constructively own ten percent or more of the total
combined voting power of all classes of stock of SRAC; or
- your interest on the Notes is effectively connected with your conduct of
a United States trade or business.
BACKUP WITHHOLDING AND INFORMATION REPORTING
GENERAL RULES
If you do not provide a correct taxpayer identification number and other
information, or do not comply with certain other requirements or otherwise
establish an exemption, SRAC, its paying agent or a broker, as the case may be,
will be required to withhold from payments to you a tax equal to 31% of each
payment. This "backup" withholding tax applies to certain payments of principal
and interest on Notes and to proceeds from the sale or disposition of Notes
before maturity.
If you provide the United States Internal Revenue Service with the
information it requires, you will receive a refund or a credit against your
United States federal income tax liability for any amounts withheld from your
payments under the backup withholding rules.
SRAC, its paying agent or a broker, as the case may be, will also be
required to report certain information relating to their payments of principal
and interest on Notes and of proceeds from the sale or disposition of Notes
before maturity.
EXCEPTIONS APPLICABLE TO NON-UNITED STATES PERSONS AND EXEMPT RECIPIENTS
Temporary Treasury regulations, which are currently effective, provide that
backup withholding and information reporting will not apply to payments of
principal and interest on Notes by SRAC or its paying agents to you if you
certify under penalties of perjury that you are not a United States person or
otherwise establish an exemption, provided neither SRAC nor its paying agents
has actual knowledge that you are a United States person or that the conditions
of any other exemption are not in fact satisfied.
S-15
<PAGE> 16
If a foreign office of a custodian, nominee or other agent collects your
payment on your behalf, that custodian, nominee or other agent does not have to
apply backup withholding to its payments to you. However, if that 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, the custodian, nominee or other agent will be
subject to certain information reporting requirements with respect to that
payment unless:
- the custodian, nominee or other agent has evidence in its records that
you are not a United States person and does not have actual knowledge that
the evidence is false;
- you are an exempt recipient, such as a bank, corporation or Financial
Institution; or
- you otherwise establish an exemption.
Payments to you on a Note by the United States office of a custodian, nominee or
other agent on your behalf will be subject to information reporting and backup
withholding, unless:
- you certify under penalties of perjury that you are not a United States
person and you provide your name and address; or
- you otherwise establish an exemption.
Final and temporary Treasury regulations, which are currently effective,
provide that backup withholding will not apply to payments of the proceeds of
your sale of your Notes if:
- you are not a United States person; and
- you sell your Notes to or through a foreign office of a broker.
Certain information reporting requirements apply to payments of such proceeds 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, unless:
- you are an exempt recipient; or
- the broker has evidence in its records that you are not a United States
person and no actual knowledge that the evidence is false.
Information reporting and backup withholding requirements will apply to payments
of the proceeds of a sale to or through the United States office of a broker
unless:
- you certify under penalties of perjury that you are not a United States
person and provide your name and address; or
- you otherwise establish an exemption.
Final Treasury regulations, which are effective January 1, 2000, provide
that backup withholding and information reporting will not apply to payments of
principal and interest on Notes to you if you are not a United States person and
you qualify for the "portfolio interest" exception to United States withholding
tax as described above under the heading "United States Tax Considerations --
Foreign Holders -- U.S. Withholding Tax," 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 your behalf.
Final Treasury regulations, which are effective January 1, 2000, provide
that information reporting and backup withholding will generally apply to
payments to you, even if you are not a United States person, of the proceeds of
the sale of your Notes to or through a foreign office of a broker that is a
"U.S. payor" or a "U.S. middleman" (including (i) a person who is a United
States person, (ii) a controlled foreign corporation for United States federal
income tax purposes, (iii) a foreign partnership that is either controlled by
United States persons or engaged in a United States
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<PAGE> 17
trade or business, or (iv) a foreign person 50% or more of whose gross income is
from a United States trade or business for a specified three-year period),
unless:
- you are an exempt recipient; or
- the broker has evidence in its records that you are not a United States
person and has no actual knowledge or reason to believe that the evidence
is unreliable.
UNDERWRITING
Under the terms and subject to the conditions of the Underwriting Agreement
and the Pricing Agreement dated the date of this prospectus supplement, SRAC has
agreed to sell to each of the Underwriters named below, and each of the
Underwriters has severally agreed to purchase from SRAC, the respective
principal amounts of Notes set forth opposite its name in the table below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NOTES
UNDERWRITER ------------
<S> <C>
Goldman, Sachs & Co. ....................................... $
J.P. Morgan Securities Inc. ................................
..............................
..............................
..............................
..............................
..............................
------------
Total....................................................... $750,000,000
============
</TABLE>
CONDITIONS. The Underwriting Agreement obligates the Underwriters to pay
for and accept delivery of the Notes if their counsel approves certain legal
matters and certain other conditions are satisfied. The Underwriters are
committed to take and pay for all of the Notes if they take any of them.
TERMS. The Underwriters have advised SRAC that they will offer part of the
Notes directly to the public at the public offering price set forth on the cover
page of this prospectus supplement and will offer part of the Notes to certain
dealers at a price that represents a concession not in excess of . % of the
principal amount of Notes. The Underwriters may allow, and those dealers may
reallow, a concession not in excess of . % of the principal amount of Notes
to other underwriters or to certain other dealers. The Underwriters may vary the
price and other selling terms of the Notes from time to time after the initial
offering of the Notes.
STABILIZATION. In connection with the offering, the Underwriters are
permitted to engage in certain transactions that stabilize the price of the
Notes. These transactions consist of bids or purchases for the purpose of
preventing or retarding a decline in the price of the Notes. If the Underwriters
create a short position in the Notes in connection with the offering, i.e., if
they sell more than $750,000,000 of Notes, the Underwriters may reduce that
short position by purchasing Notes in the open market. In general, purchases of
a security to stabilize the price or to reduce a short position could cause the
price of the security to be higher than it might be in the absence of those
purchases. Underwriters are not required to engage in these activities and may
end any of these activities at any time.
INDEMNIFICATION. SRAC 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
with respect to these liabilities.
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<PAGE> 18
EXPENSES. SRAC estimates that its expenses in connection with the offering
and sale of the Notes will be approximately $ .
LISTING. SRAC has applied to list these Notes on the Luxembourg Stock
Exchange, in accordance with the rules of the Luxembourg Stock Exchange, to
facilitate trading in non-U.S. markets.
REPRESENTATIONS. Each Underwriter has represented and agreed that:
- it has not offered or sold any Notes, and until six months after SRAC
issues the Notes, will not offer and sell any Notes to persons in the
United Kingdom, except to persons whose ordinary business activities
involve them in acquiring, holding, managing or disposing of investments
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;
- it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom;
and
- 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 issue 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 (as amended) or who is a person to whom the document may otherwise
lawfully be issued or passed on.
STAMP TAXES. The laws and practices of the country in which you purchase
your Notes may require you to pay stamp taxes and other charges in addition to
the issue price, which is set forth on the cover of this prospectus supplement.
OTHER INFORMATION. In the ordinary course of their respective businesses,
certain of the Underwriters and/or their affiliates engage from time to time in
various general financing and banking transactions with SRAC and its affiliates.
USE OF PROCEEDS
SRAC will add the net proceeds of $ that it receives from the sale
of the Notes to its general funds and will initially use these proceeds to
reduce its short-term debt. See "Use of Proceeds" in the prospectus.
LEGAL OPINIONS
Steven M. Cook, Vice President -- Law, is passing upon the legality of the
Notes for SRAC. Steven M. Cook owns 227 shares of Sears common stock and has
been granted stock options with respect to an additional 5,593 shares of Sears
common stock. Cleary, Gottlieb, Steen & Hamilton is passing upon the legality of
the Notes for the Underwriters. Cleary, Gottlieb, Steen & Hamilton performs
legal services for Sears from time to time.
LISTING AND GENERAL INFORMATION
SRAC has applied to list the Notes on the Luxembourg Stock Exchange. Before
listing the Notes on the Luxembourg Stock Exchange, SRAC will deposit its
Restated Certificate of Incorporation and a legal notice relating to the
issuance of the Notes with the Chief Registrar of the District Court of
Luxembourg. You may obtain copies of these documents at the District Court of
Luxembourg. While any of the Notes remain outstanding, you may inspect SRAC's
Restated Certificate of Incorporation and the indenture and obtain copies of
SRAC's annual financial
S-18
<PAGE> 19
statements and annual and quarterly reports at the office of Chase Manhattan
Bank Luxembourg S.A.
The independent auditors of SRAC are Deloitte & Touche LLP.
SRAC's Board of Directors adopted the resolutions relating to the execution
of the indenture and the sale and issuance of the Notes on December 16, 1998.
Except as this prospectus supplement and the prospectus may explain, in the
judgment of SRAC's management, (a) there has been no material adverse change in
SRAC's condition since January 2, 1999 and (b) any pending litigation against
SRAC that is likely to result in a material adverse effect on SRAC's
consolidated financial position is disclosed in this prospectus supplement and
the prospectus or in the documents incorporated by reference.
The Notes have been accepted for clearance through Euroclear and Cedelbank
with a common code of and an ISIN number of .
You can obtain copies of the documents described under "Available
Information" and "Incorporation of Certain Documents by Reference" in the
prospectus 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-19
<PAGE> 20
SEARS ROEBUCK ACCEPTANCE CORP.
DEBT SECURITIES
------------------------------
Sears Roebuck Acceptance Corp. ("SRAC") may from time to time sell up to
$6,642,200,000 aggregate initial offering price of its debt securities. These
debt securities may consist of debentures, notes or other types of unsecured
debt. The supplement accompanying this prospectus includes the specific terms of
these debt securities.
------------------------------
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission nor have these organizations
determined that this prospectus is accurate or complete. Any representation to
the contrary is a criminal offense.
------------------------------
April 23, 1999
<PAGE> 21
SRAC HAS NOT AUTHORIZED ANY DEALER, SALESMAN OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND THE ACCOMPANYING SUPPLEMENT TO
THIS PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT AS IF SRAC HAD AUTHORIZED IT. THIS PROSPECTUS AND THE
ACCOMPANYING SUPPLEMENT TO THIS PROSPECTUS 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, NOR DO THIS PROSPECTUS AND THE ACCOMPANYING
SUPPLEMENT TO THIS PROSPECTUS CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE
INFORMATION CONTAINED IN THIS PROSPECTUS AND THE SUPPLEMENT TO THIS PROSPECTUS
IS ACCURATE AS OF THE DATES ON THEIR COVERS. WHEN SRAC DELIVERS THIS PROSPECTUS
OR A SUPPLEMENT OR MAKES A SALE PURSUANT TO THIS PROSPECTUS, SRAC IS NOT
IMPLYING THAT THE INFORMATION IS CURRENT AS OF THE DATE OF THE DELIVERY OR SALE.
------------------------------
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........................................ 11
Legal Opinion............................................... 11
Experts..................................................... 12
</TABLE>
2
<PAGE> 22
AVAILABLE INFORMATION
SRAC and Sears, Roebuck and Co. ("Sears"), SRAC's parent, are required to
file reports and other information with the Securities and Exchange Commission.
Sears also files proxy statements with the Commission. You can inspect and copy
these reports, proxy statements and other information 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. You can also obtain copies of these materials 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). You can inspect reports and other information concerning
SRAC and Sears at the office of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. You can also inspect reports, proxy statements
and other information concerning Sears at the offices of 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.
SRAC and Sears have filed a registration statement and related exhibits
with the Commission under the Securities Act of 1933, as amended. The
registration statement contains additional information about SRAC, Sears and the
debt securities. You may inspect the registration statement and exhibits without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and you may obtain copies from the Commission at prescribed rates.
REPORTS TO HOLDERS OF DEBT SECURITIES
SRAC will send its annual reports to the holders of its debt securities.
These annual reports will include financial information that independent public
accountants have audited and reported on, as well as other information about
SRAC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SRAC and Sears incorporate and make part of this prospectus by reference
the following documents, filed by SRAC and Sears with the Commission pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended:
- the Annual Reports on Form 10-K for the year ended January 2, 1999, filed
by SRAC and Sears;
- the Current Reports on Form 8-K for January 21, February 9, February 18,
February 19, March 11, and April 23, 1999 filed by Sears; and
- 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 on or after the
date of this prospectus and before SRAC stops offering the debt
securities (other than those portions of such documents described in
paragraphs (i), (k), and (l) of Item 402 of Regulation S-K promulgated by
the Commission).
To receive a free copy of any of the documents incorporated by reference in
this prospectus (other than exhibits, unless they are specifically incorporated
by reference in the documents), call or write Sears Roebuck Acceptance Corp.,
3711 Kennett Pike, Greenville, Delaware 19807, Attention: Vice President,
Finance (302/888-3100).
3
<PAGE> 23
SEARS ROEBUCK ACCEPTANCE CORP.
SRAC is a wholly owned subsidiary of Sears that was incorporated under the
laws of Delaware in 1956. Its general offices are located at 3711 Kennett Pike,
Greenville, Delaware 19807 (302/888-3100). It raises funds primarily by issuing
commercial paper, medium-term notes and discrete underwritten debt and by
borrowing under intermediate-term loan agreements. It uses the proceeds from its
borrowings to acquire short-term notes of Sears and, on occasion, to purchase
outstanding receivable balances from Sears. Sears, a multi-line retailer that
conducts domestic and international merchandising and credit operations, uses
the funds it obtains from SRAC for general funding purposes. SRAC, and not
Sears, will be solely responsible for repaying the debt securities.
SRAC generates income primarily from the earnings on its investment in the
notes and receivable balances of Sears. Sears presently calculates the interest
rate on its notes so that SRAC maintains an earnings to fixed charges ratio of
at least 1.25. The yield on SRAC's investment in Sears notes is related to
SRAC's borrowing costs. As a result, movements in interest rates and changes in
Sears borrowing requirements cause SRAC's earnings to fluctuate. The indenture
relating to SRAC's debt securities requires SRAC to maintain a ratio of earnings
to fixed charges of not less than 1.10 for any fiscal quarter (determined in
accordance with Item 503(d) of Regulation S-K promulgated by the Commission) and
to cause Sears to maintain ownership of all of SRAC's voting stock as long as
any of SRAC's debt securities are outstanding. Sears has agreed to pay SRAC the
amounts that are necessary for SRAC to maintain an earnings to fixed charges
ratio of at least 1.10 and has agreed to maintain ownership of all of SRAC's
voting stock as long as any of SRAC's debt securities are outstanding. See
"Description of Debt Securities--Certain Restrictions."
As of April 14, 1999, SRAC had nine employees.
USE OF PROCEEDS
SRAC will add the net proceeds it receives from the sale of its debt
securities to its general funds and initially will use the proceeds to reduce
its short-term debt. As indicated in this prospectus under the heading "Sears
Roebuck Acceptance Corp.," SRAC's principal business is purchasing short-term
notes of Sears. Additionally, SRAC occasionally purchases receivable balances
from Sears domestic credit operations. SRAC expects to incur additional debt,
but has not yet determined how much or the terms of this debt. SRAC will make
these determinations from time to time based on economic conditions and certain
capital requirements of Sears. SRAC anticipates that Sears and its subsidiaries
will continue their practice of short-term borrowing and will occasionally incur
additional long-term debt and engage in securitization programs in which Sears
and its subsidiaries sell interests in pools of credit card receivables in
public or private transactions. Sears also occasionally may issue equity
securities.
4
<PAGE> 24
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of
SRAC for the last five fiscal years. You should read this summary information in
conjunction with SRAC's financial statements and the notes to the financial
statements that are incorporated by reference in this prospectus.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Operating Results
Total revenues................................ $ 1,234 $ 960 $ 689 $ 510 $ 283
Interest expense and amortization of debt
discount/premium............................ 979 763 546 405 219
Total expenses................................ 983 767 548 407 221
Income taxes.................................. 88 68 49 36 22
Net income.................................... $ 163 $ 125 $ 92 $ 67 $ 40
Financial Position
Assets
Notes of Sears.............................. $17,990 $16,561 $11,609 $8,397 $6,843
Receivable balances purchased from Sears.... 90 89 76 81 82
Total assets................................ $18,247 $16,716 $12,004 $8,635 $7,031
Liabilities
Commercial paper............................ $ 4,243 $ 5,249 $ 3,324 $4,451 $4,913
Agreements with bank trust departments...... -- -- 82 137 87
Intermediate-term loans..................... -- 50 715 895 845
Medium-term notes........................... 5,976 6,033 4,834 1,384 --
Discrete underwritten debt.................. 5,084 3,099 1,298 499 --
Total liabilities........................... $15,472 $14,554 $10,317 $7,390 $5,854
Stockholder's Equity
Capital stock (including capital in excess
of par value)............................ $ 1,185 $ 735 $ 385 $ 35 $ 35
Retained income............................. 1,590 1,427 1,302 1,210 1,143
Total stockholder's equity.................. 2,775 2,162 1,687 1,245 1,178
Debt as percentage of equity.................. 552% 667% 608% 592% 496%
Other Pertinent Data
Commercial paper
Average daily outstandings.................. $ 4,514 $ 3,952 $ 4,388 $4,963 $3,615
Agreements with bank trust departments
Average daily outstandings.................. -- 55 98 154 124
Contractual credit facilities (year-end)...... 6,100 5,540 5,000 5,720 5,132
</TABLE>
5
<PAGE> 25
RATIO OF EARNINGS TO FIXED CHARGES
Sears presently calculates the interest rate on SRAC's investment in Sears
notes to provide SRAC with earnings sufficient to cover its fixed charges at
least 1.25 times. The ratios of earnings to fixed charges for SRAC and Sears for
the years ended on the dates set forth in the following table were as follows:
<TABLE>
<CAPTION>
JANUARY 2, JANUARY 3, DECEMBER 28, DECEMBER 30, DECEMBER 31,
1999 1998 1996 1995 1994
---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
SRAC(1)......................... 1.26 1.25 1.26 1.26 1.29
Sears(2)........................ 2.16 2.34 2.40 2.15 2.06
</TABLE>
- ---------------
(1) Calculated as follows:
earnings = net income + fixed charges + income taxes
---------------------------------------------------------------------------
fixed charges = interest expense + amortization of debt discount and
expense
(2) Calculated as follows:
earnings = income from continuing operations (excluding undistributed net
income of uncon-
solidated subsidiaries) + fixed charges (excluding capitalized interest)
+ income taxes
---------------------------------------------------------------------------
fixed charges = interest expense + the portion of operating lease rentals
which Sears estimates represents the interest element in such rentals
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of SRAC's
unsecured debt securities. When SRAC offers to sell a particular series of debt
securities, it will describe the specific terms of the series in a supplement to
this prospectus. SRAC will also indicate in the supplement whether the general
terms and provisions described in this prospectus apply to a particular series
of debt securities.
SRAC has entered into an indenture with The Chase Manhattan Bank, as
trustee, and will issue its debt securities under that indenture or under
another indenture into which it may enter with another eligible trustee. SRAC
will identify the trustee and the particular indenture under which it is issuing
its debt securities in the supplement to this prospectus.
The following sections summarize certain provisions of SRAC's debt
securities and indenture. This summary is qualified by and subject to the actual
provisions of the indenture under which SRAC is issuing its debt securities.
SRAC has filed the indenture with the Commission and is incorporating it by
reference in this prospectus. Where this summary refers to particular provisions
of the indenture, the provisions are incorporated by reference.
GENERAL TERMS
The debt securities will be unsecured obligations of SRAC.
SRAC can issue an unlimited amount of debt securities under the indenture,
and can issue them from time to time in one or more series.
If any of the following terms apply to a particular series of debt
securities that SRAC offers to sell, the supplement to this prospectus will
describe the applicable terms:
- the title
- any limit on the aggregate principal amount
- the maturity date or dates
- the issue price
6
<PAGE> 26
- the interest rate or rates (which may be fixed or variable)
- the date from which interest will accrue
- the interest payment dates (including the first interest payment date)
- the record dates for the interest payment dates
- any optional or mandatory redemption, conversion and exchange provisions
and whether you have or SRAC has the right to use these provisions
- any subordination provisions
- any sinking fund provisions
- the amount payable upon acceleration of the maturity date, if the amount
is not the principal amount of the debt securities
- the terms of any warrants attached to the debt securities
- the currencies that you may use to purchase the debt securities and that
SRAC may use to pay principal, any premium and interest
- any index SRAC will use to determine the amount of principal, premium and
interest payments
- whether SRAC will issue the debt securities as one or more global
securities to be held for investors by a depository and, if so, the name
of the depository
- the places where the principal, any premium and interest will be payable,
if those places are not set forth in the indenture
- any other terms that are consistent with the indenture that may modify or
delete any provision of the indenture to the extent the provision applies
to such series
SRAC will pay principal, any premium and any interest at the office of the
paying agent it maintains for such purposes in the Borough of Manhattan of The
City of New York. You may transfer debt securities (other than debt securities
represented by global securities) at the same office. SRAC may also designate
other locations for payments and transfers in the city in which its principal
executive offices are located or the city in which the principal corporate trust
office of the trustee is located. Unless SRAC specifies otherwise in the
supplement to this prospectus, the locations for payment and transfer initially
will include the principal corporate trust office of the trustee in the Borough
of Manhattan of The City of New York and SRAC's principal executive offices in
Greenville, Delaware.
SRAC will pay interest on its debt securities by checks mailed to you at
your registered address, unless you make other arrangements or the debt
securities are represented by a global security. (Sections 2.5, 3.1, 3.2) If the
debt securities are represented by global securities, SRAC will provide
information about payment of principal, any premium and interest and about
transfers of beneficial interests in the global securities in the supplement to
this prospectus.
If SRAC has indicated in the supplement to this prospectus that it will pay
principal, any premium and interest in a currency other than U.S. dollars and
that currency is unavailable for payment due to circumstances beyond SRAC's
control, SRAC will pay the principal, any premium and interest in U.S. dollars.
The exchange rate will be the most recent noon buying rate in New York City for
cable transfers in the unavailable currency, as certified for customs purposes
by the Federal Reserve Bank of New York. However, if the unavailable currency is
the European Currency Unit, the exchange rate will be the most recent rate
determined by the Council of European Communities. (Section 2.12)
7
<PAGE> 27
SRAC will issue its debt securities only in fully registered form, without
coupons, in denominations of $1,000 or an integral multiple of $1,000, unless
SRAC indicates otherwise in the supplement to this prospectus. (Section 2.2)
You will not have to pay a service charge to register a transfer or
exchange of debt securities. However, SRAC may require you to pay an amount
sufficient to cover any tax or other governmental charge in connection with the
transfer or exchange. (Section 2.5)
SRAC may issue debt securities at a discounted price with provisions that
permit it to pay less than the principal amount if the holders of the debt
securities accelerate the maturity date as a result of a continuing default. If
SRAC chooses to issue these discounted debt securities, it will describe the
federal income tax consequences and other special considerations in the
supplement to this prospectus.
CERTAIN RESTRICTIONS
The indenture provides that SRAC will maintain a ratio of earnings to fixed
charges in every fiscal quarter of at least 1.10 and that it will cause Sears to
maintain ownership of all of SRAC's voting stock. SRAC determines its ratio of
earnings to fixed charges in accordance with Item 503(d) of Regulation S-K
promulgated by the Commission, as in effect on the date of the indenture. SRAC
has letter agreements with Sears pursuant to which Sears has agreed, for the
benefit of the holders of SRAC's debt securities, that
- Sears will pay SRAC amounts which, when added to SRAC's other earnings,
will be sufficient for SRAC to maintain the fixed charge coverage ratio
required by the indenture and
- Sears will maintain ownership of SRAC's voting stock as long as SRAC is
required to cause Sears to do so.
The indenture provides that SRAC will cause Sears to observe and perform in
all material respects all covenants or agreements of Sears contained in the
letter agreements and will not amend, waive, terminate or otherwise modify any
provision of the letter agreements. (Section 3.6)
DEFAULTS
If any of the following occur in connection with any series of SRAC's debt
securities, SRAC will be in default under those debt securities:
- if SRAC fails to pay the principal amount and any premium on the series
when due and payable;
- if SRAC fails for 30 days after any interest payment date to pay any
interest that has become due (unless it deposits the entire amount due
with the trustee or with a paying agent within 30 days after the due
date);
- if SRAC fails to perform any of its other covenants under the indenture
that apply to that series of debt securities and does not cure that
failure for 60 days after it receives written notice that it has failed
to perform from holders of a majority of the principal amount of the
particular series of debt securities or the trustee;
- if SRAC's creditors or creditors of Sears, including holders of SRAC's
debt securities from a different series, accelerate the maturity date of
$100,000,000 or more in principal amount of SRAC debt or Sears debt, and
those creditors do not rescind or annul the acceleration within 30 days
after SRAC receives written notice from holders of a majority of the
principal amount of the particular series of debt securities or the
trustee, unless the maturity date was accelerated as a result of
compliance with applicable laws, court orders or governmental decrees;
8
<PAGE> 28
- if SRAC takes certain actions in connection with a bankruptcy, insolvency
or reorganization; or
- if SRAC does or fails to do something that the supplement to this
prospectus identifies as an event of default.
Unless the supplement to this prospectus specifies otherwise, if SRAC
defaults on a particular series of debt securities and the default is
continuing, the holders of a majority of the principal amount of the outstanding
debt securities of that series may accelerate the maturity date of those debt
securities. To accelerate the maturity date, those holders must declare that the
principal amount of the debt securities of that series is immediately due and
payable. In certain circumstances, holders of a majority of the principal amount
of outstanding debt securities of the series may annul the acceleration of the
maturity date. (Section 6.1)
Before instituting a proceeding to enforce the indenture or to obtain a
remedy provided for by the indenture:
- holders of debt securities must notify the trustee of a default in
writing;
- holders of a majority of the principal amount of outstanding debt
securities of the particular series must request in writing that the
trustee institute the proceeding;
- holders of a majority of the principal amount of outstanding debt
securities of the particular series must offer reasonable indemnity to
the trustee if the trustee institutes the proceeding; and
- the trustee must neglect or refuse to institute the proceeding within a
reasonable time.
These requirements do not prevent a holder from enforcing the payment of
principal and interest on the debt securities held by such holder, on or after
the principal or interest due dates. (Section 6.7)
MODIFICATION OR AMENDMENT OF THE INDENTURE
SRAC may amend the indenture 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 amendment. However, SRAC may not make any amendment
without the consent of the holders of each affected debt security then
outstanding if that amendment will:
- permit SRAC to extend the time of payment of any payment on the debt
securities, or to reduce the payment, or
- reduce the percentage of holders of any series of debt securities whose
consent is required to amend the indenture. (Article XI)
DEFEASANCE
Termination of Certain Obligations
Unless SRAC provides otherwise in the supplement to this prospectus, SRAC
may terminate certain of its obligations under the indenture with respect to the
debt securities of any series by depositing with the trustee or a paying agent,
in trust, any combination of the following in an amount sufficient to pay the
principal, any premium and each installment of interest on the debt securities
of such series on the dates such payments are due:
- money;
- securities backed by the full faith and credit of the United States of
America that the issuer cannot call or redeem (if the debt securities
with respect to which SRAC is terminating certain of its obligations are
denominated in U.S. dollars);
9
<PAGE> 29
- certain depository receipts for any non-callable and non-redeemable
securities backed by the full faith and credit of the United States of
America, or for a specific payment of interest on or principal of any
such securities, issued by a bank or trust company as custodian (if the
debt securities with respect to which SRAC is terminating certain of its
obligations are denominated in U.S. dollars); or
- other securities that, when deposited in trust, alone or in combination
with other items in this list, will result in a nationally recognized
rating agency rating SRAC's debt securities in the highest generic
long-term debt rating category applicable to debt issued by an issuer
that has been released from its obligations to the same extent that SRAC
has been (if the debt securities with respect to which SRAC is
terminating certain of its obligations are denominated in a foreign
currency).
As a prerequisite to establishing the trust, in addition to certain other
requirements, SRAC must receive a ruling from the Internal Revenue Service or an
opinion of counsel who is not its employee. The ruling or opinion must state
that the holders of the debt securities with respect to which SRAC is
terminating certain of its obligations will not recognize income, gain or loss
for federal income tax purposes as a result of the deposit with the trustee and
termination of these obligations. The ruling or opinion must also state that
those holders will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if SRAC had not
deposited money or securities with the trustee and terminated these obligations.
SRAC must also receive an opinion of counsel stating that, after 90 days, either
the trust deposit will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally or that the holders' rights would be adequately protected
despite the application of such laws to the trust funds.
Notwithstanding the deposit with the trustee or paying agent and compliance
with the additional requirements described above or in the indenture, SRAC's
obligations under the indenture to do the following with respect to a series
will remain in full force and effect until SRAC has paid the debt securities of
such series in full:
- pay principal, premium (if any) and interest;
- register the transfer or exchange of the debt securities;
- replace mutilated, destroyed, lost and stolen debt securities;
- maintain paying agencies; and
- hold monies for payment in trust. (Section 13.4)
If and when the Internal Revenue Service can provide a ruling, or counsel
can provide an opinion as described above, without reliance upon the
continuation of SRAC's obligations regarding the payment of principal, premium
(if any) and interest, then SRAC may discharge the indenture--including its
payment obligations--by delivering the ruling or opinion to the trustee and
satisfying the other conditions provided for in the indenture. (Section 13.4)
Under present ruling positions of the Internal Revenue Service, SRAC cannot
obtain such a ruling or opinion.
Discharge of the Indenture
SRAC may also discharge the indenture, and all of its obligations under the
indenture, with respect to a particular series of debt securities--including its
payment obligations--if:
- all securities issued under the indenture have been canceled or delivered
to the trustee to be canceled; or
- all securities issued under the indenture that have not been canceled
- have become due and payable in accordance with their terms, or
10
<PAGE> 30
- will become due and payable in accordance with their terms within
one year, or
- will be called for redemption within one year under arrangements
that satisfy the trustee.
To discharge the indenture in these circumstances, SRAC must deposit trust funds
with the trustee in an amount sufficient to pay all principal, interest and
premiums on the outstanding securities until they mature or are redeemed. SRAC
must also deliver a certificate of one of its officers and an opinion of
counsel, each stating that SRAC has complied with all conditions precedent to
the satisfaction and discharge of the indenture. (Section 13.1)
REGARDING THE TRUSTEE
The Chase Manhattan Bank, which is a trustee under the indenture, performs
other services for SRAC.
PLAN OF DISTRIBUTION
SRAC may sell its debt securities to or through underwriters, directly to
other purchasers or through agents. SRAC anticipates offering its debt
securities directly to brokers or dealers, investment companies, insurance
companies, banks, savings and loan associations and trust companies or similar
institutions, and to trusts for which a bank, savings and loan association,
trust company or investment adviser is the trustee or is authorized to make
investment decisions.
SRAC may distribute its debt securities from time to time in one or more
transactions:
- at a fixed price or prices, which may change
- at market prices prevailing at the time of sale
- at prices related to such prevailing market prices or
- at negotiated prices.
The supplement to this prospectus will describe the method of distribution
of any particular series of debt securities.
In connection with the sale of its debt securities, SRAC, or the purchasers
of debt securities for whom the underwriters may act as agents, may compensate
the underwriters in the form of discounts, concessions or commissions.
Underwriters may sell SRAC's debt securities to or through dealers and may
compensate the dealers in the form of discounts, concessions or commissions.
Dealers may also receive commissions from the purchasers of debt securities, for
whom they may act as agents. Pursuant to the Securities Act, the Commission may
deem underwriters, dealers and agents that participate in the distribution of
debt securities to be underwriters. The Commission also may deem any discounts,
commissions or concessions and any profit on the resale of debt securities to be
underwriting discounts and commissions under the Securities Act. The supplement
to this prospectus will identify any such underwriter or agent and will describe
any such compensation.
SRAC may enter into agreements to indemnify underwriters, dealers and
agents that participate in the distribution of its debt securities against
certain liabilities, including liabilities under the Securities Act.
LEGAL OPINION
Unless otherwise specified in the supplement to this prospectus, Steven M.
Cook, Vice President -- Law, will pass upon the legality of the debt securities
for SRAC.
11
<PAGE> 31
EXPERTS
Deloitte & Touche LLP, independent auditors, have audited the annual
financial statements that are incorporated by reference in this prospectus, as
stated in their reports that are also incorporated by reference in this
prospectus. SRAC and Sears have incorporated by reference their financial
statements in reliance upon the reports of Deloitte & Touche LLP given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information contained in
the Quarterly Reports on Form 10-Q for Sears and SRAC, which are incorporated in
this prospectus by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Quarterly
Reports on Form 10-Q for Sears and SRAC and incorporated by reference in this
prospectus, they did not audit and they did not express an opinion on such
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Securities Act of
1933.
12
<PAGE> 32
PRINCIPAL EXECUTIVE OFFICES OF SRAC
SEARS ROEBUCK ACCEPTANCE CORP.
3711 KENNETT PIKE
GREENVILLE, DELAWARE 19807
INDEPENDENT AUDITORS TO SRAC
DELOITTE & TOUCHE LLP
<TABLE>
<S> <C>
Two Prudential Plaza 1700 Market Street
180 North Stetson Avenue Philadelphia, Pennsylvania 19103
Chicago, Illinois 60601
</TABLE>
LEGAL ADVISERS
To SRAC
<TABLE>
<S> <C> <C>
BAKER & MCKENZIE STEVEN M. COOK LATHAM & WATKINS
Special Tax Counsel Vice President -- Law 5800 Sears Tower
815 Connecticut Avenue, N.W. Sears, Roebuck and Co. Chicago, Illinois 60606
Washington, D.C. 20006 3333 Beverly Road
Hoffman Estates, Illinois 60179
</TABLE>
To the Underwriters
CLEARY, GOTTLIEB, STEEN & HAMILTON
One Liberty Plaza
New York, New York 10006
TRUSTEE
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, New York 10001-2697
PAYING AGENTS
<TABLE>
<S> <C>
CHASE MANHATTAN BANK LUXEMBOURG S.A. THE CHASE MANHATTAN BANK
5 rue Plaetis 450 West 33rd Street, 15th Floor
L-2338 Luxembourg New York, NY 10001-2697
</TABLE>
LISTING AGENT
BANQUE GENERALE DU LUXEMBOURG, S.A.
50 Avenue J.F. Kennedy
L-2951 Luxembourg
<PAGE> 33
$750,000,000
SEARS ROEBUCK ACCEPTANCE CORP.
% NOTES DUE , 2009
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
, 1999
