SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
February 10, 1998
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Date of Report (Date of earliest event reported)
BENEFICIAL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-1177 51-0003820
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(State or other jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
One Christina Centre, 301 North Walnut Street
Wilmington, Delaware 19801
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(Address of Principal Executive Offices) (Zip Code)
(302) 425-2500
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Registrant's telephone number, including area code
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
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1.1 Terms Agreement, dated February 10, 1998 between the
Registrant and UBS Securities LLC with Union Bank of
Switzerland, London branch joining solely for purposes of
the assignment of the Call Option.
4.1 Form of Fixed Rate Medium-Term Note, Series I (Global).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: February 24, 1998
BENEFICIAL CORPORATION
By: /s/ Samuel F. McMillan
--------------------------------
Name: Samuel F. McMillan
Title: Senior Vice President and
Treasurer
EXHIBIT INDEX
Exhibit No. Description
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1.1 Terms Agreement, dated February 10, 1998 between the
Registrant and UBS Securities LLC with Union Bank of
Switzerland, London branch joining solely for purposes
of the assignment of the Call Option.
4.1 Form of Fixed Rate Medium-Term Note, Series I (Global).
Exhibit 1.1
BENEFICIAL CORPORATION
(a Delaware Corporation)
Medium-Term Notes, Series I
TERMS AGREEMENT
February 10, 1998
Beneficial Corporation
One Christina Centre
301 North Walnut Street
Wilmington, DE 19801
Re: Distribution Agreement dated July 25, 1997
The undersigned ("UBS") agrees to purchase the following principal
amount (in the specified currency or currency unit) of Notes:
Trade Date: February 10, 1998
Time of Delivery: February 18, 1998
Principal Amount: $300,000,000
Price to Public: Varying prices to be determined at the
time of sale
Specified Currency: US dollars
Interest Rate: Prior to February 18, 2003: 6.25%. On
and after February 18, 2003, as
described in the Pricing Supplement
under "Interest Rate and Interest
Payment Dates" to the extent the Call
Option is exercised by the Callholder
Price to be Paid to
Beneficial Corporation: 102.186% of Principal Amount, which
includes compensation for Call Option
Aggregate Price to be paid
to Beneficial Corporation
(in immediately available
funds) consisting of
consideration for purchase
of Notes which includes
compensation for Call Option: $306,558,000.00
Interest Payment Dates: February 18 and August 18, commencing
August 18, 1998
Call Option: The Notes may be called by the
Callholder prior to maturity as
described in the Pricing Supplement
under "Call Option; Put Option."
Put Option: The Notes may be required to be repaid
pursuant to the Put Option prior to
maturity as described in the Pricing
Supplement under "Call Option; Put
Option."
Put/Call Date: February 18, 2003
Maturity of Note: February 18, 2013, subject to the Put
Option as described in the Pricing
Supplement
Form: Book-Entry
Settlement Date: February 18, 1998
You hereby assign, transfer, convey and set over to Union Bank of
Switzerland, London branch all of your right, title and interest in, to
and under the Call Option relating to the Notes. You agree that the
assignment contained in this paragraph is irrevocable, and that you
will not take any action that is inconsistent with such assignment or
make any other assignment inconsistent herewith. You will, from time
to time upon the request of the Trustee, execute all instruments of
further assurance and all such supplemental instruments with respect to
this assignment as the Trustee may specify.
Reference is made to the Distribution Agreement referred to above
for a more complete description of the rights and obligations of the
parties hereto.
Capitalized terms used herein shall have the respective meanings
set forth in the Pricing Supplement.
This Agreement shall be governed by and construed in accordance
with the laws of New York.
UBS Securities LLC
By: /s/ Corey B. Pinkston
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Name: Corey B. Pinkston
Title: Director
By: /s/ Bruce Widas
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Name: Bruce Widas
Title: Managing Director
Accepted:
BENEFICIAL CORPORATION
By: /s/ Samuel F. McMillan
-----------------------------
Name: Samuel F. McMillan
Title: Senior Vice President
and Treasurer
UNION BANK OF SWITZERLAND,
LONDON BRANCH, solely for
purposes of the assignment
of the Call Option
By: /s/ John Staddon
-----------------------------
Name: John Staddon
Title: Executive Director
By: /s/ William McGowan
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Name: William McGowan
Title: Director
Exhibit 4.1
FORM OF NOTE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS
AGENT FOR THE REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
BENEFICIAL CORPORATION
MEDIUM-TERM NOTE, SERIES I
(FIXED RATE)
REGISTERED PRINCIPAL AMOUNT
No. $300,000,000
INTEREST PAYABLE EACH FEBRUARY 18 AND AUGUST 18 AND AT MATURITY
CUSIP: 08172MHU3
ORIGINAL ISSUE DATE: FEBRUARY 18, 1998
INITIAL INTEREST RATE: 6.25%
MATURITY DATE: FEBRUARY 18, 2013
COUPON RESET DATE: FEBRUARY 18, 2003
CALCULATION AGENT: UBS Securities LLC
OTHER PROVISIONS: As set forth on Exhibit A to this Note.
BENEFICIAL CORPORATION, a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal amount of THREE HUNDRED MILLION U.S.
DOLLARS on the Maturity Date set forth above at the office or agency of
the Company for such payment in The City of New York, in such coin or
currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay
interest on said principal amount until maturity at the rate per annum
(on the basis of a 360-day year consisting of twelve 30-day months or as
otherwise provided above) equal to the Initial Interest Rate shown above
until the Coupon Reset Date and thereafter at a rate determined in
accordance with the provisions set forth on Exhibit A to this Note under
"Coupon Reset Process" and on the reverse hereof, at such office or
agency, in like coin or currency, semi-annually on February 18 and August
18 of each year or as otherwise provided above, until the date on which
payment of said principal amount has been made or duly provided for, and
on such date. Unless otherwise provided above, such interest shall be
payable from the date hereof; provided, however, that if the Company
shall default in payment of the interest due on such February 18, or
August 18, or such other date on which interest hereon is payable, then
from the preceding February 18, or August 18, or such other date on which
interest hereon is payable to which interest has been most recently paid.
Except as otherwise provided above or in the Indenture hereinafter
referred to and in the next sentence, the interest payable hereon on any
February 18, or August 18, or such other date on which interest hereon is
payable shall be payable to the person in whose name this Note is
registered on the fifteenth calendar day (whether or not a Business Day)
immediately preceding such February 18 or August 18, or such other date
on which interest hereon is payable and may be paid, at the option of the
Company, by check mailed to the person entitled thereto at his address
appearing in the Note Register (as defined in the Indenture hereinafter
referred to). Interest payable hereon on the Maturity Date set forth
above shall be payable to the same person to whom the principal amount
hereof shall be payable. Unless otherwise specified above, if the date of
this Note is between the last calendar day of the month next preceding a
February 18, or August 18, or other interest payment date (the "Record
Date") and a February 18 or August 18, then the first payment of interest
hereon shall be made on the August 18 or February 18 following the next
succeeding Record Date to the registered owner on such Record Date. If
any Interest Payment Date or the maturity date of a Fixed Rate Note falls
on a day that is not a Business Day, payment of principal or interest
will be made on the next Business Day as if it were made on the date such
payment was due, and no interest will accrue on the amount so payable for
the period from and after such Interest Payment Date or the maturity
date, as the case may be.
Unless the Certificate of Authentication hereon has been executed
by the Trustee by the manual signature of one of its authorized officers,
this Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
The provisions of this Note are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, BENEFICIAL CORPORATION has caused this
Instrument to be signed manually or by facsimile signature by its
Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, President, a Member of the Office of the President or one of
its Vice Presidents and by its Treasurer or one of its Assistant
Treasurers or its Secretary or one of its Assistant Secretaries, and a
facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.
BENEFICIAL CORPORATION
By _______________________________
Member of the Office of the
President, and Chief Financial
Officer
By ________________________________
Senior Vice President and
Treasurer
[FORM OF REVERSE OF NOTE]
This Note is a Global Security evidencing a portion of a duly
authorized issue of notes of the Company, designated generally as its
Medium-Term Notes, Series I (the "Notes"). The Notes are all issued or to
be issued under and pursuant to the Indenture dated as of July 1, 1997
(the "Indenture"), duly executed and delivered by The Chase Manhattan
Bank, as trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitation of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Notes. The
Notes constitute a single series for purposes of the Indenture, unlimited
in aggregate principal amount.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal hereof may be declared,
and upon such declaration shall become, due and payable, in the manner,
with the effect and subject to the conditions provided in the Indenture.
The Indenture provides that the holders of the majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of
the holders of all of the Notes waive any past default under the
Indenture and its consequences, except a default in the payment of
principal of or interest on any of the Notes, in the manner and to the
extent provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding,
evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Notes; provided, however, that no such supplemental Indenture shall (i)
extend the fixed maturity of any Note, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest
thereon, or make the principal thereof or interest thereon payable in any
coin or currency other than that hereinabove provided, without the
consent of the holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditioned to pay the principal of and interest
on this Note at the time and place and at the rate and in the coin or
currency herein prescribed.
The Notes are issuable as registered Notes only, in the denomination of
$25,000 and any larger denomination which is an integral multiple of $1,000
approved by the Company, such approval to be evidenced by the execution
thereof.
This Note is transferable by the registered holder hereof in person
or by his attorney duly authorized in writing on the books of the Company
at the office or agency to be maintained by the Company for that purpose
in The City of New York, but only in the manner subject to the
limitations and upon payment of any tax or governmental charge for which
the Company may require reimbursement as provided in the Indenture, and
upon surrender and cancellation of this Note. Subject to limitations set
forth in the Indenture, upon any registration of transfer, a new
registered Note or Notes, of authorized denomination or denominations,
and in the same aggregate principal amount, will be issued to the
transferee in exchange therefor.
The Company, the Trustee, any paying agent, and any Note register
may deem and treat the registered holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding
any notations of ownership or other writing hereon made by anyone other
than the Note registrar) for the purpose of receiving payment of or on
account of the principal hereof and interest due hereon, as herein
provided and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any Note register shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, stockholder,
officer or director, as such past, present or future, of the Company or
of any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released.
Notwithstanding any other provision of this Note, unless and until
it is exchanged in whole or in part for Notes in definitive form, this
Global Security representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary for such Notes to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee to a successor Depositary for these Notes
or a nominee of such successor Depositary.
Unless otherwise specified on the face hereof this Note is
defeasible pursuant to Section 12.02 of the Indenture.
The Notes are not redeemable prior to maturity but are subject to
the Call Option and are entitled to the Put Option described on Exhibit A
to this Note.
This Note shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in
accordance with the laws of said State.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated: February 18, 1998
This is one of the Notes of the series designated herein issued
under the within-mentioned Indenture.
THE CHASE MANHATTAN BANK
as Trustee
By _______________________________
Authorized Officer
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations.
TEN COM -- as tenants in common UNIF GIFT MIN ACT _____ Custodian _____
TEN ENT -- as tenants by the entries (Cust) (Minor)
JT TEN -- as joint tenants with
right of survivorship _______________
and not as tenants (State)
in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING OF ASSIGNEE
{....................................................} __________________
(Please print or
____________________________________________________________________________
typewrite name and address of assignee)
the within Note of Beneficial Corporation and hereby does irrevocably
constitute and appoint
_________________________________________________________Attorney to
transfer the said Note on the books of the within-mentioned Company, with
full power of substitution in the premises.
Dated: _________________ ____________________________________________
NOTICE: The signature to this
assignment must correspond with the name as
written upon the face of the Note in every
particular without alteration or
enlargement or any change whatever.
EXHIBIT A
OTHER PROVISIONS
CALL OPTION; PUT OPTION
The Company and any of its assigns, including, but not limited to,
Union Bank of Switzerland, London branch (the "Callholder") has the right
to purchase this Note in whole but not in part on the Coupon Reset Date
(as defined above) (the "Call Option"), at a price equal to 100% of the
principal amount hereof (the "Call Price"), by giving notice to the
Trustee (the "Call Notice"). In the event of exercise of the Call Option,
then (i) not later than 2:00 p.m. New York time on the Business Day prior
to the Coupon Reset Date, the Callholder shall deliver the Call Price in
immediately available funds to the Trustee for payment of the Call Price
on the Coupon Reset Date and (ii) the holders of the Notes shall be
required to deliver the Notes to the Callholder against payment therefor
on the Coupon Reset Date through the facilities of the Depositary. Such
Call Notice shall be given to the Trustee, in writing, no later than 15
calendar days prior to the Coupon Reset Date.
If the Callholder elects to exercise the Call Option, the
obligation of the Callholder to pay the Call Price is subject to the
conditions precedent that, (i) since the date of the Call Notice, no
Event of Default (as defined in the Indenture) with respect to the Notes
shall have occurred and be continuing; (ii) no Market Disruption Event
(as defined below) shall have occurred; and (iii) two or more Dealers (as
defined below), other than UBS Securities LLC, shall have provided timely
Bids (as defined below) in the manner described below under "Coupon Reset
Process." No holder of Notes shall have any rights or claims against the
Callholder as a result of the Callholder not purchasing the Notes.
The holder of this Note has the right to put this Note in whole but
not in part to the Company on the Coupon Reset Date (the "Put Option").
If the Call Option has not been exercised, or in the event the Callholder
is not required or fails to deliver the Call Price to the Trustee not
later than 2:00 p.m. New York time on the Business Day prior to the
Coupon Reset Date, the Trustee will, for and on behalf of the holders of
the Notes, exercise the Put Option by giving the Company notice of such
exercise not later than the close of business on the Business Day prior
to the Coupon Reset Date. Upon exercise of the Put Option, the Company
will be required to purchase all of the Notes on the Coupon Reset Date,
at a purchase price equal to 100% of the entire principal amount thereof
(the "Put Redemption Price"). The Put Option will be exercised
automatically by the Trustee, on behalf of the holders, if the Call
Option has not been exercised. No holder has the right to consent or
object to the Trustee's duty to exercise the Put Option. If the Trustee
exercises the Put Option, the Company will deliver the Put Redemption
Price to the Trustee, together with the accrued and unpaid interest due
on the Coupon Reset Date, by no later than 12:00 noon New York time on
the Coupon Reset Date and the holders of Notes will be required to
deliver the Notes to the Company against payment therefor on the Coupon
Reset Date through the facilities of the Depositary.
COUPON RESET PROCESS
If the Callholder has exercised the Call Option as set forth above
under "Call Option; Put Option," the Company and the Calculation Agent
shall complete the following steps in order to determine the interest
rate to be paid on the Notes from and including such Coupon Reset Date to
the Final Maturity Date. The Company and the Calculation Agent shall use
reasonable efforts to cause the actions contemplated below to be
completed in as timely a manner as possible.
(a) The Company shall provide the Calculation Agent with a list
(the "Dealer List"), no later than five Business Days prior to the Coupon
Reset Date, containing the names and addresses of at least five and no
more than fifteen dealers, one of which shall be UBS Securities LLC or
its successor as Calculation Agent, from which it desires the Calculation
Agent to obtain the Bids (as defined below) for the purchase of the
Notes. As used herein, "Business Day" means any day other than a
Saturday, a Sunday or a day on which banking institutions in The City of
New York are authorized or obligated by law, executive order or
governmental decree to close.
(b) Within one Business Day following receipt by the Calculation
Agent of the Dealer List, the Calculation Agent shall provide to each
dealer (each, a "Dealer") on the Dealer List (i) the name of the Company,
(ii) a copy of the Pricing Supplement dated February 10, 1998 relating to
the offering of the Notes and the Prospectus Supplement dated July 10,
1997, which includes the Prospectus dated July 10, 1997, (iii) a copy of
the form of Notes and (iv) a written request that each Dealer submit a
Bid to the Calculation Agent by 12:00 noon New York time (the "Bid
Deadline") on the third Business Day prior to the Coupon Reset Date (the
"Bid Date"). "Bid" shall mean an irrevocable written offer given by a
Dealer for the purchase settling on the Coupon Reset Date, and shall be
quoted by such Dealer as a stated yield to maturity on the Notes (the
"Yield to Maturity"). Each Dealer shall be provided with (i) an estimate
of the Purchase Price (as defined below) (which shall be stated as a
United States dollar amount and be calculated by the Calculation Agent in
accordance with clause (c) below), (ii) the principal amount and maturity
of the Notes and (iii) the method by which interest will be calculated on
the Notes.
(c) The purchase price to be paid by any Dealer for the Notes (the
"Purchase Price") shall be equal to (i) the principal amount of the Notes
plus (ii) a premium (the "Notes Premium") which shall be equal to the
excess, if any, of (A) the discounted present value to the Coupon Reset
Date of a United States Treasury security, with a maturity of February
18, 2013 which has an interest rate of 5.65%, semi-annual interest
payments on each February 18 and August 18, commencing August 18, 2003,
and a principal amount of $300,000,000, and assuming a discount rate
equal to the Treasury Rate (as defined below) over (B) $300,000,000.
"Treasury Rate" means the per annum rate equal to the offer side yield to
maturity of the current on-the-run 10-year United States Treasury
Security per Telerate page 500 at 11:00 a.m. New York time on the Bid
Date (or such other date that may be agreed upon by the Company and the
Calculation Agent), or, if such rate does not appear on Telerate page 500
at such time, the rates on GovPx End-of-Day Pricing at 3:00 p.m. New York
time on the Bid Date.
(d) Following the receipt of the Bids, the Calculation Agent shall
provide written notice to the Company, setting forth (i) the names of
each of the Dealers from whom the Calculation Agent received Bids on the
Bid Date, (ii) the Bid submitted by each such Dealer and (iii) the
Purchase Price as determined pursuant to paragraph (c) hereof. Except as
provided below, the Calculation Agent shall thereafter select from the
Bids received by the Bid Deadline on the Bid Date, the Bid with the
lowest Yield to Maturity (the "Selected Bid") and establish the Coupon
Reset Rate equal to the interest rate which would amortize the Notes
Premium fully over the term of the Notes at the Yield to Maturity
indicated by the Selected Bid, provided, however, that if any two or more
of the lowest Bids submitted are equivalent, the Company shall in its
sole discretion select any of such equivalent Bids (and such selected Bid
shall be the Selected Bid).
(e) Immediately after calculating the Coupon Reset Rate and in no
event later than 3 p.m. New York time on the third Business Day prior to
the Coupon Reset Date, the Calculation Agent shall provide written notice
to the Company and the Trustee setting forth such Coupon Reset Rate. The
Company shall thereafter establish the Coupon Reset Rate as the new
interest rate on the Notes, effective from and including the Coupon Reset
Date, by delivery to the Trustee on or before the Coupon Reset Date of an
officer's certificate.
(f) The Callholder shall sell the Notes to the Dealer that made the
Selected Bid at the Purchase Price, such sale to be settled on the Coupon
Reset Date in immediately available funds.
If the Calculation Agent determines that (i) since the Call Notice,
an Event of Default with respect to the Notes shall have occurred and be
continuing, (ii) a Market Disruption Event has occurred or (iii) fewer
than two Dealers, not including UBS Securities LLC, have provided Bids in
a timely manner substantially as provided above, the Call Option will be
automatically revoked, and the Trustee will exercise the Put Option on
behalf of the holders. "Market Disruption Event" shall mean either of the
following: (i) any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Company and
UBS Securities LLC, impracticable to market the Notes or enforce
contracts for the sale of the Notes, or (ii) the suspension of trading in
any securities of the Company by the Securities Exchange Commission or a
national securities exchange, or if trading generally on either the
American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of
said exchanges or by order of the Securities Exchange Commission or any
other governmental authority, or if a banking moratorium has been
declared by either Federal or New York authorities.
