<PAGE>
<PAGE>
PRICING SUPPLEMENT NO. 3
DATED: APRIL 21, 1999
(TO PROSPECTUS SUPPLEMENT DATED MARCH 19, 1999
AND PROSPECTUS DATED MARCH 19, 1999)
AT&T CAPITAL CORPORATION
MEDIUM-TERM NOTES, SERIES G
<TABLE>
<CAPTION>
FLOATING RATE NOTES Issue Price: 100% (as a percent of principal amount)
-------------------
<S> <C>
PRINCIPAL AMOUNT: U.S. $300,000,000
INTEREST RATE: Floating
ISSUE DATE: April 23, 1999
TRADE DATE: April 21, 1999
SETTLEMENT DATE: April 23, 1999
INITIAL INTEREST PAYMENT DATE: July 23, 1999
MATURITY DATE: April 23, 2002
DAYCOUNT: Actual/360
BASE RATE: LIBOR
INDEX MATURITY: 3 Month
SPREAD: Plus 27 basis points (subject to adjustment as described below)
MINIMUM/MAXIMUM: Not applicable
INITIAL INTEREST RATE: 5.2675% per annum
INTEREST RESET DATES: January 23, April 23, July 23 and October 23 (or next Business Day),
commencing July 23, 1999
SOURCE: LIBOR Telerate
INTEREST PAYMENT DATES: January 23, April 23, July 23 and October 23 (or next Business Day)
CUSIP NUMBER: 00206HL28
</TABLE>
ADJUSTMENT TO THE INTEREST RATE
Beginning (a) on the first day following a Failed Acquisition Date or
(b) if the Acquisition has not closed by December 31, 1999, on January 1, 2000,
the Spread specified above will increase to 102 basis points. If the Spread has
been so increased, then, if applicable, upon the first day following the
completion of the Acquisition, the Spread will reduce to 27 basis points.
A "Failed Acquisition Date" is the earliest public announcement by The
CIT Group Inc. or Newcourt Credit Group Inc. that (a) the Acquisition will not
occur, (b) either party has failed to receive the necessary shareholder approval
for the Acquisition, or (c) either party has failed to receive the necessary
regulatory approvals for the Acquisition. "Acquisition" means the acquisition of
Newcourt by The CIT Group Inc. announced March 8, 1999.
See "Recent Developments" in the accompanying prospectus. No
determination has been made whether The CIT Group Inc. will guarantee or support
the obligations of either AT&T Capital or Newcourt. Therefore, investors should
not expect that The CIT Group Inc. will guarantee or support the obligations of
either AT&T Capital or Newcourt.
J.P. MORGAN & CO.
<PAGE>
<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 19, 1999)
U.S. $6,000,000,000
[LOGO]
MEDIUM-TERM NOTES, SERIES G
GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
[LOGO]
-------------------------------
The following terms may apply to the Notes which AT&T Capital Corporation, a
subsidiary of Newcourt Credit Group Inc., may sell at one or more times. The
final terms for each Note will be included in a pricing supplement. AT&T Capital
will receive between $5,997,000,000 and $5,955,000,000 of the proceeds from the
sale of the Notes, after paying the agents commissions of between $3,000,000 and
$45,000,000.
Unless the applicable pricing supplement states otherwise, the Notes will have
the following terms:
The Notes will mature in 9 months or more from the date of issue.
The Notes will bear interest at either a fixed or a floating rate. Floating
rate interest will be based on one or more of the following rates:
CD Rate
CMT Rate
Commercial Paper Rate
Federal Funds Rate
LIBOR
Prime Rate
Treasury Rate
Any other rate or interest rate formula defined in the applicable pricing
supplement
Any of the above may be further adjusted by a spread and/or spread
multiplier
Interest on Fixed Rate Notes will be payable on May 15 and November 15 of
each year.
Interest on Floating Rate Notes will be payable on the dates stated in the
applicable pricing supplement.
A Note may be issued as an indexed note, which means that the principal
amount, premium or interest payable on such Note will be determined by
reference to a designated index or formula.
The Notes will be held in global form by The Depository Trust Company.
The Notes may not be redeemed at the option of AT&T Capital or repaid at
the option of the holder prior to the maturity date thereof.
The Notes will be unconditionally guaranteed as to payment of principal,
premium, if any, and interest by Newcourt. The Notes are not guaranteed or
supported in any way by AT&T Corp. AT&T Capital is not owned by, or an affiliate
of, AT&T Corp.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR PASSED UPON THE ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
LEHMAN BROTHERS
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
This prospectus supplement is dated March 19, 1999.
<PAGE>
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT. IN THIS PROSPECTUS SUPPLEMENT, THE TERM 'DOCUMENT'
REFERS TO ANY PRICING SUPPLEMENT, THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
-----------------------------
S-2
<PAGE>
<PAGE>
In this prospectus supplement, the 'company,' 'we,' 'us' and 'our' refer to
AT&T Capital and 'Newcourt' refers to Newcourt Credit Group Inc. References to
'U.S. Dollars' or 'U.S.$' or '$' are to the currency of the United States of
America. The 'Notes' refer to our Medium-Term Notes, Series G.
IMPORTANT CURRENCY EXCHANGE INFORMATION
You are required to pay for the Notes in the currency specified in the
pricing supplement. You will receive payments of principal, premium, if any, and
any interest on, such Notes in the currency specified in the pricing supplement.
Currently, there are limited facilities in the United States for you to convert
U.S. dollars into foreign currencies and vice versa, and a limited number of
banks located in the United States offer non-U.S. dollar denominated checking or
savings accounts. However, if we offer non-U.S. dollar denominated Notes, you
may ask the Agent offering the Notes to you to arrange to convert your payment
of the purchase price from U.S. dollars to the currency specified for the Notes.
You must request such conversion on or before the third Business Day (as defined
below) preceding the date the Notes are delivered to you or by such other date
as the Agent selects. The Agent will select the terms, conditions, limits and
charges imposed on such conversion. You will bear the cost of such conversion.
DESCRIPTION OF MEDIUM-TERM NOTES, SERIES G
We provide information to you about our Notes in three separate documents
that progressively provide more detail: (1) the prospectus, (2) the prospectus
supplement and (3) the pricing supplement. Because the specific terms of our
Notes may differ from the general information we have provided, you should rely
on the information in the pricing supplement over different information in this
prospectus supplement and the prospectus, and rely on information in this
prospectus supplement over different information in the prospectus. The
following summary of the terms of our Notes does not contain all the information
that may be important to you. In addition to reading the pricing supplement,
this prospectus supplement and the prospectus, you should read carefully the
indenture.
GENERAL
Our Notes have been registered with the Securities and Exchange Commission
under Registration Statement No. 333-73255 and 333-73255-01. Under the
Registration Statement, we have registered debt securities and warrants having
an aggregate purchase price of U.S. $6,000,000,000, or its equivalent in other
currencies or currency units. We will issue the Notes under an Indenture dated
as of March 1, 1999, among the company, Newcourt and The Chase Manhattan Bank,
as trustee. The Notes constitute a single series of securities under the
indenture. The indenture does not limit the amount of debt securities which may
be issued under it. The indenture provides that the company may issue debt
securities in one or more series up to the aggregate principal amount for such
series as authorized from time to time by the company. We may, from time to
time, without your consent, issue additional Notes or other debt securities
under the indenture. The indenture is more fully described in the prospectus.
We may issue Notes with an aggregate offering price of up to U.S.
$6,000,000,000, or its equivalent in other currencies or currency units. This
amount may be reduced if we issue any other securities pursuant to the
Registration Statement. See 'Plan of Distribution.' Our Notes will be offered on
a continuous basis and will mature on any day 9 months or more from date of
issue, as specified in the pricing supplement.
The pricing supplement for each Note will describe the following terms:
(1) the specified currency for the Note (and, if such currency is
other than U.S. dollars, certain other terms relating to the Note);
(2) whether the Note is a Fixed Rate Note, an Amortizing Note or a
Floating Rate Note;
(3) whether the Note is an Original Issue Discount Note;
S-3
<PAGE>
<PAGE>
(4) whether the Note is an Indexed Note and, if so, its special terms;
(5) if other than 100%, the price (generally expressed as a percentage
of its aggregate principal amount) at which the Note will be issued;
(6) the date on which the Note will be issued;
(7) the date on which the Note will mature;
(8) if the Note is a Fixed Rate Note, the annual interest rate payable
on such Note;
(9) if the Note is a Floating Rate Note, the Base Rate, the initial
interest rate, the Interest Reset Dates, the Interest Payment Dates, the
Index Maturity, the Maximum and Minimum Interest Rates, if any, and the
Spread or Spread Multiplier, if any, and any other terms relating to the
method of calculating interest on the Note;
(10) if the Note is an Amortizing Note, whether payments of principal
and interest will be made quarterly or semiannually, and the repayment
information for the Note;
(11) any terms for redemption at the option of the company, repayment
at the option of the holder, or amortization of principal of the Notes; and
(12) any other terms of the Note.
Our Notes will be issued in fully registered form. Each Note will initially
be represented by either a global security, referred to as a Book-Entry Note,
registered in the name of a nominee of The Depository Trust Company, as
depositary, or a certificate issued in definitive form. Except as discussed
under ' -- Book-Entry System' below, Book-Entry Notes will not be issued in
certificated form.
Unless the pricing supplement states otherwise, Notes denominated in U.S.
dollars will be issued in increments of U.S. $1,000.
Unless the pricing supplement states otherwise, Notes denominated in a
currency other than U.S. dollars will be issued in increments of such currency
approximately equal to U.S. $1,000 based upon the noon buying rate in New York
City for cable transfers of such currency, as determined by the Federal Reserve
Bank of New York on the Business Day immediately preceding the trade date for
such Notes, rounded to the nearest increment of 1,000 units of such currency. In
the case of Euros, unless the pricing supplement states otherwise, the currency
equivalent will be based upon the rate of exchange determined by the Commission
of the European Communities, or any successor, as published in the Official
Journal of the European Communities, or any successor publication, on the
Business Day immediately preceding the trade date for such Notes, rounded to the
nearest increment of 1,000 units of such currency.
The Notes are unsecured and will rank equally with all other unsecured and
unsubordinated indebtedness of the company. Unless the pricing supplement states
otherwise, we will not have the option to redeem the Notes and the holders of
the Notes will not have the option to request repayment of the Notes prior to
maturity. Unless the pricing supplement states otherwise, the Notes will not be
subject to any sinking fund.
We may change interest rates and interest rate formulas, but we cannot
change any Note already issued or as to which we have accepted an offer to
purchase, except with the consent of all holders of such Note. The interest
rates we offer may differ depending upon, among other things, the aggregate
principal amount of the Notes purchased in any single transaction.
When we use 'Business Day' in this prospectus supplement, we mean:
for Notes denominated in U.S. dollars, any day, other than a Saturday or
Sunday, that is not a legal holiday or a day on which banking institutions
in New York City are authorized or required by law or regulation,
including any executive order, to close;
for Notes denominated in a currency other than U.S. dollars or Euros, any
day, other than a Saturday or Sunday, that is not a legal holiday or a day
on which banking institutions are authorized or required by law or
regulation, including any executive order, to close in either New York
City or the Principal Financial Center of the country of such currency;
S-4
<PAGE>
<PAGE>
for Notes denominated in Euros, any day, other than a Saturday or Sunday,
that is not a legal holiday or a day on which banking institutions are
authorized or required by law or regulation, including any executive
order, to close in either New York City or Brussels, Belgium; and
for LIBOR Notes, any day, other than a Saturday or Sunday, that is not a
legal holiday or a day on which banking institutions are authorized or
required by law or regulation, including any executive order, to close in
New York City and that is also a London Banking Day. A 'London Banking
Day' means any day on which dealings in deposits in the Index Currency are
transacted in the London interbank market. See ' -- Payments of Principal
and Interest -- Floating Rate Notes -- LIBOR Notes.'
'Principal Financial Center' of a country means the principal financial
center of such country, which is generally its capital city, except that if the
currency is U.S. dollars or Deutsche marks, the Principal Financial Center means
New York City and Frankfurt, respectively.
THE REGISTRAR; THE PAYING AGENT; THE AUTHENTICATING AGENT
We have initially designated The Chase Manhattan Bank, acting through its
principal corporate trust office in New York, New York, as the registrar and
transfer agent, the paying agent and the authenticating agent for the Notes.
PAYMENT CURRENCY
Unless the pricing supplement states otherwise, we will make payments of
principal, premium, if any, and interest on any Note in the currency in which
such Note is denominated.
If the principal of, premium, if any, or interest on, any Note is payable
in a currency other than U.S. dollars and such currency is not available to us
due to the imposition of exchange controls or other circumstances beyond our
control, we are entitled to satisfy our obligations to holders of such Notes by
making payments in U.S. dollars. We will base the amount of such payment on the
noon buying rate in New York City for cable transfers of such currency as
determined by the Federal Reserve Bank of New York (the 'Market Exchange Rate')
on the date of such payment, or if such rate of exchange is not then available,
on the basis of the Market Exchange Rate as of the most recent date used to
determine the holder entitled to such payment. Payments on the Notes in U.S.
dollars as described above will not constitute an event of default under the
indenture.
Effective January 1, 1999, 11 of the 15 member countries of the European
Economic and Monetary Union (Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain,
Sweden and the United Kingdom) established fixed conversion rates between their
existing currencies (legacy currencies) and one common currency -- the Euro. The
Euro is now trading on currency exchanges and may be used as a non-cash
transactional currency. The conversion to the Euro eliminates currency exchange
rate risk between the participating member countries. Beginning in 2002, new
Euro-denominated bills and coins will be issued, and legacy currencies will be
withdrawn from circulation. If all or some of the currencies of the member
states are replaced by the Euro or by an alternative single European currency
that becomes the exclusive currency of such member state or states, we will make
payments of principal, premium, if any, or interest on any Notes denominated in
each such currency, unless the pricing supplement states otherwise, in Euros or
such alternative European currency in compliance with such treaty; however, such
currency so replaced shall not be deemed to be unavailable to the company for
purposes of the immediately preceding paragraph.
PAYMENT OF PRINCIPAL AND INTEREST
GENERAL
In this prospectus supplement, we refer to Notes that bear interest at a
floating rate determined by reference to the rates or interest rate formulas
described below as 'Floating Rate
S-5
<PAGE>
<PAGE>
Notes.' We refer to Notes that bear interest at a fixed rate, which may be zero,
as 'Fixed Rate Notes.'
For Notes which provide for payment of interest in installments, we will
pay interest on each Interest Payment Date specified in the applicable Note and
at maturity or, if applicable, upon redemption or repayment. We will pay
interest to the person in whose name a Note is registered at the close of
business on the record date for such interest payment. In the case of Book-Entry
Notes represented by a global security, we will pay interest to a nominee of the
depositary; provided, however, that interest payable at maturity, even if the
maturity date is also an interest payment date, will be paid to the person to
whom principal is paid. If the original issue date of a Note is between a record
date and an interest payment date, the initial interest payment will be made on
the interest payment date following the next record date to the registered
holder on such next record date. Unless the pricing supplement states otherwise,
the 'record date' for any interest payment date shall be fifteen calendar days
prior to such interest payment date, whether or not such date is a Business Day.
Unless the pricing supplement states otherwise, payments of interest on
Notes will include the amount of interest accrued to, but excluding, the
interest payment date, maturity date or redemption date, as the case may be.
In the case of Notes denominated in, and for which principal, premium, if
any, and interest payments are in, U.S. dollars, payments will be made, and the
Notes will be transferable, at the office of the paying agent, The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York, or at such other place
or places as may be designated pursuant to the indenture; provided that the
company, at its option, may pay interest other than interest due at maturity by
check mailed to registered holders. In the case of Book-Entry Notes represented
by a global security, payments will be made to a nominee of the depositary.
Unless the pricing supplement states otherwise, interest on Notes, except
for interest due at maturity, payable in a currency other than U.S. dollars will
be paid by mailing a check or draft in such currency drawn on an account at a
bank outside of the United States. If any Notes are denominated in a currency
other than U.S. dollars or if the principal of, premium, if any, or interest on,
any Notes is payable in a currency other than U.S. dollars, the pricing
supplement will provide additional information pertaining to the terms of such
Notes. The principal and accrued interest payable at maturity of a Note will be
paid in immediately available funds upon surrender of the Note at the office of
the Trustee at the above address or at such other place or places as may be
designated pursuant to the indenture.
FIXED RATE NOTES
Unless the pricing supplement states otherwise, payments of interest on
Fixed Rate Notes (other than an Amortizing Note) will be made on (1) May 15 and
November 15 of each year, except as provided above with respect to Notes issued
between a record date and an interest payment date, and (2) at maturity. Unless
the pricing supplement states otherwise, payments of principal and interest on
each Amortizing Note will be made semi-annually each May 15 and November 15. See
also ' -- Amortizing Notes' below.
If any interest payment date or the maturity date of a Fixed Rate Note
falls on a day that is not a Business Day, the payment will be made on the next
Business Day as if it were made on the date such payment was due, and no
additional interest will accrue as a result of such delayed payment.
Unless the pricing supplement states otherwise, Fixed Rate Notes will bear
interest from the date of issue. Interest will be calculated on the basis of a
year of twelve thirty-day months.
FLOATING RATE NOTES
Except as provided below or if the pricing supplement states otherwise,
interest on Floating Rate Notes will be payable at maturity and:
S-6
<PAGE>
<PAGE>
for Notes with a daily, weekly or monthly Interest Reset Date, on the
third Wednesday of each month or on the third Wednesday of February, May,
August and November, as specified in the pricing supplement;
for Notes with a quarterly Interest Reset Date, on the third Wednesday of
February, May, August and November;
for Notes with a semi-annual Interest Reset Date, on the third Wednesday
of the two months specified in the pricing supplement; and
for Notes with an annual Interest Reset Date, on the third Wednesday of
the month specified in the pricing supplement.
If any interest payment date for any Floating Rate Note (other than the
maturity date) falls on a day that is not a Business Day, such interest payment
date will be postponed to the next Business Day, except that in the case of a
LIBOR Note, if such Business Day falls in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business Day. If
the maturity date of a Floating Rate Note falls on a day that is not a Business
Day, the required payment of principal, premium, if any, and interest will be
made on the next Business Day as if it were made on the date such payment was
due, and no interest shall accrue as a result of such delayed payment.
Unless the pricing supplement states otherwise, the interest rate on each
Floating Rate Note will be calculated by reference to a 'Base Rate' (1) plus or
minus the Spread, if any, and/or (2) multiplied by the Spread Multiplier, if
any. The pricing supplement will designate one or more of the following Base
Rates as applicable to each Floating Rate Note:
the Commercial Paper Rate (a 'Commercial Paper Rate Note');
the Federal Funds Rate (a 'Federal Funds Rate Note');
the Certificate of Deposit Rate (a 'CD Rate Note');
LIBOR (a 'LIBOR Note');
the Treasury Rate (a 'Treasury Rate Note');
the Prime Rate (a 'Prime Rate Note');
the Constant Maturity Treasury Rate (a 'CMT Rate Note'); or
such other Base Rate or interest rate formula as is set forth in such
pricing supplement and in such Floating Rate Note.
The 'Spread' is the number of basis points (one one-hundredth of a
percentage point) specified in the pricing supplement as being applicable to the
interest rate for such Floating Rate Note. The 'Spread Multiplier' is the
percentage specified in the pricing supplement as being applicable to the
interest rate for such Floating Rate Note. The 'Index Maturity' for any Floating
Rate Note is the period of maturity of the instrument or obligation from which
the Base Rate is calculated and will be specified in the pricing supplement.
A Floating Rate Note may also have either or both of the following: (1) a
maximum limit, or ceiling, on the rate of interest that may accrue during any
interest period (a 'Maximum Interest Rate'); and (2) a minimum limit, or floor,
on the rate of interest that may accrue during any interest period (a 'Minimum
Interest Rate'). The applicable pricing supplement will indicate the Maximum
Interest Rate and Minimum Interest Rate, if any. In addition to any Maximum
Interest Rate which may be applicable to any Floating Rate Note, the interest
rate on a Floating Rate Note will not exceed the maximum rate permitted by New
York law, as the same may be modified by United States law of general
application.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (such period being the
'Interest Reset Period' for such Note and the first date of each Interest Reset
Period, on which such interest rate becomes effective, being an 'Interest Reset
Date'), as specified in the pricing supplement. Unless the pricing supplement
states otherwise, the Interest Reset Date will be:
S-7
<PAGE>
<PAGE>
for Floating Rate Notes which reset daily, each Business Day;
for Floating Rate Notes (other than Treasury Rate Notes) which reset
weekly, the Wednesday of each week;
for Treasury Rate Notes which reset weekly, the Tuesday of each week;
for Floating Rate Notes which reset monthly, the third Wednesday of each
month;
for Floating Rate Notes which reset quarterly, the third Wednesday of
February, May, August and November;
for Floating Rate Notes which reset semi-annually, the third Wednesday of
two months of each year, as specified in the pricing supplement; and
for Floating Rate Notes which reset annually, the third Wednesday of one
month of each year, as specified in the pricing supplement.
The interest rate in effect from the date of issue to the first Interest
Reset Date will be the Initial Interest Rate in the pricing supplement. If any
Interest Reset Date for any Floating Rate Note is not a Business Day, such
Interest Reset Date shall be postponed to the next Business Day, except that in
the case of a LIBOR Note, if such Business Day is in the next calendar month,
such Interest Reset Date shall be the preceding Business Day. Each adjusted rate
shall be applicable on and after the Interest Reset Date to which it relates,
to, but not including, the next Interest Reset Date or the maturity date or the
date of redemption, as the case may be.
We will calculate accrued interest on a Floating Rate Note by multiplying
the principal amount of such Floating Rate Note by an accrued interest factor.
We will compute such accrued interest factor by adding the interest factors
calculated for each day in the Interest Reset Period or from the last date from
which accrued interest is being calculated. If a Floating Rate Note is an
Indexed Note, we will calculate accrued interest by multiplying the Face Amount
of such Indexed Note by the accrued interest factor. Unless the pricing
supplement states otherwise, we will compute the interest factor for each day by
dividing the interest rate applicable to such day by 360, for Commercial Paper
Rate Notes, Federal Funds Rate Notes, CD Rate Notes, LIBOR Notes and Prime Rate
Notes, or by the actual number of days in the year for Treasury Rate Notes and
CMT Rate Notes. The interest rate applicable on an Interest Reset Date is the
applicable rate as reset on such date. The interest rate applicable to any day
that is not an Interest Reset Date is the interest rate for the immediately
preceding Interest Reset Date or, if none, the initial interest rate, as
specified in the pricing supplement.
Unless the pricing supplement states otherwise, The Chase Manhattan Bank
will be the calculation agent (the 'Calculation Agent') for any issue of
Floating Rate Notes. Upon the request of the holder of any Floating Rate Note,
the Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate which will be in effect on the next Interest Reset
Date for such Floating Rate Note.
All percentages resulting from any calculation of the interest rate on a
Floating Rate Note will be rounded, if necessary, to the nearest
one-hundred-thousandth of a percentage point (.0000001), with five
one-millionths of a percentage point rounded upward. All dollar amounts used in
or resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent (with one-half cent rounded upward).
Unless the pricing supplement states otherwise, the 'Calculation Date' for
any Commercial Paper Interest Determination Date, Federal Funds Interest
Determination Date, CD Interest Determination Date, Treasury Rate Determination
Date, Prime Rate Interest Determination Date and CMT Rate Interest Determination
Date (each as defined below) will be the earlier of (1) the tenth calendar day
after such date, or, if such tenth day is not a Business Day, the next Business
Day and (2) the Business Day preceding the applicable Interest Payment Date or
date of maturity, as the case may be.
The pricing supplement will specify the initial interest rate in effect
with respect to a Floating Rate Note from the Issue Date to the first Interest
Reset Date. The interest rate for each subsequent Interest Reset Date will be
determined by the Calculation Agent as follows:
S-8
<PAGE>
<PAGE>
COMMERCIAL PAPER RATE NOTES. Commercial Paper Rate Notes are Floating Rate
Notes that bear interest at an interest rate which is calculated by referring to
the Commercial Paper Rate and the Spread and Spread Multiplier, if any,
specified in such Notes and in the applicable pricing supplement.
The 'Commercial Paper Interest Determination Date' relating to an Interest
Reset Date will be the second Business Day preceding such Interest Reset Date.
Unless the pricing supplement states otherwise, on the Calculation Date, the
Calculation Agent will determine the Commercial Paper Rate as of the Commercial
Paper Interest Determination Date and that rate will be effective on the related
Interest Reset Date. Such 'Commercial Paper Rate' shall be the Money Market
Yield (as defined below) of the rate on such Commercial Paper Interest
Determination Date for commercial paper having the Index Maturity specified in
the pricing supplement, as such rate shall be published by the Board of
Governors of the Federal Reserve System in 'Statistical Release H.15(519),
Selected Interest Rates,' or any successor publication ('H.15(519)'), under the
heading 'Commercial Paper -- Financial.'
The following procedures will be followed if the Commercial Paper Rate
cannot be determined as described above:
In the event that the above rate is not published prior to 9:00 A.M.,
New York City time, on the Calculation Date, then the Commercial Paper Rate
shall be the Money Market Yield on such Commercial Paper Interest
Determination Date of the rate for commercial paper of the specified Index
Maturity as published by the Federal Reserve Bank of New York in its daily
statistical release 'Composite 3:30 P.M. Quotations for U.S. Government
Securities' ('Composite Quotations') under the heading 'Commercial Paper';
If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not yet published in either H.15(519) or Composite Quotations, the
Calculation Agent will calculate the Commercial Paper Rate as a rate equal
to the Money Market Yield of the arithmetic mean (each as rounded to the
nearest one-hundred-thousandth of a percentage point) of the offered rates
as of 11:00 A.M., New York City time, on such Commercial Paper Interest
Determination Date of three leading dealers of commercial paper in New York
City selected by the Calculation Agent for commercial paper of the
specified Index Maturity, placed for an industrial issuer whose bond rating
is 'Aa' or the equivalent from a nationally recognized rating agency; and
If the dealers selected by the Calculation Agent are not quoting
offered rates as mentioned in the above sentence, the rate of interest
determined as of such Commercial Paper Interest Determination Date will be
the rate of interest then in effect on such Commercial Paper Interest
Determination Date.
'Money Market Yield' shall be a yield (expressed as a percentage rounded to
the nearest one hundred-thousandth of a percentage point) calculated in
accordance with the following formula:
<TABLE>
<S> <C> <C>
Money Market Yield = D X 360
------------- X 100
360 - (D X M)
</TABLE>
where 'D' refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and 'M' refers to the actual
number of days in the period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES. Federal Funds Rate Notes are Floating Rate Notes
that bear interest at an interest rate calculated with reference to the Federal
Funds Rate and the Spread and Spread Multiplier, if any, specified in such Notes
and in the applicable pricing supplement.
The 'Federal Funds Interest Determination Date' relating to an Interest
Reset Date will be the second Business Day preceding such Interest Reset Date.
Unless the pricing supplement states otherwise, on the Calculation Date, the
Calculation Agent will determine the Federal Funds Rate as of the Federal Funds
Interest Determination Date and that rate will be effective on the related
Interest Reset Date. Such 'Federal Funds Rate' shall be the effective rate for
Federal Funds on
S-9
<PAGE>
<PAGE>
such Federal Funds Interest Determination Date as published in H.15(519) under
the heading 'Federal Funds (Effective).'
The following procedures will be followed if the Federal Funds Rate cannot
be determined as described above:
In the event that the above rate is not so published by 9:00 A.M., New
York City time, on the Calculation Date, then the Federal Funds Rate will
be the interest rate on such Federal Funds Interest Determination Date as
published by the Federal Reserve Bank of New York in Composite Quotations
under the heading 'Federal Funds/Effective Rate.'
If such rate is not yet published by 3:00 P.M., New York City time, on
the Calculation Date, the Calculation Agent will calculate the Federal
Funds Rate as a rate equal to the arithmetic mean of the rates for the last
transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in New York City (which
may include an Agent or its affiliates) selected by the Calculation Agent
prior to 9:00 A.M., New York City time, on such Federal Funds Interest
Determination Date.
If the brokers so selected by the Calculation Agent are not quoting as
mentioned in the above sentence, the Federal Funds Rate determined as of
such Federal Funds Interest Determination Date will be the rate of interest
then in effect on such Federal Funds Interest Determination Date.
CD RATE NOTES. CD Rate Notes are Floating Rate Notes that bear interest at
an interest rate calculated with reference to the CD Rate and the Spread and
Spread Multiplier, if any, specified in such Notes and in the applicable pricing
supplement.
The 'CD Interest Determination Date' relating to an Interest Reset Date
will be the second Business Day preceding such Interest Reset Date. Unless the
pricing supplement states otherwise, on the Calculation Date, the Calculation
Agent will determine the CD Rate as of the CD Interest Determination Date and
that rate will be effective on the related Interest Reset Date. Such 'CD Rate'
shall be the rate for negotiable certificates of deposit having the Index
Maturity designated in the pricing supplement on such CD Interest Determination
Date, as such rate shall be published in H.15(519) under the heading 'CDs
(Secondary Market).'
The following procedures will be followed if the CD Rate cannot be
determined as described above:
In the event the above rate is not so published by 9:00 A.M., New York
City time, on the Calculation Date, the CD Rate will be the rate on such CD
Interest Determination Date for negotiable certificates of deposit of the
Index Maturity specified in the pricing supplement as published by the
Federal Reserve Bank of New York in Composite Quotations under the heading
'Certificates of Deposit.'
If by 3:00 P.M., New York City time, on such Calculation Date such
rate is not yet published in Composite Quotations, the Calculation Agent
will calculate the CD Rate as a rate equal to the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on
such CD Interest Determination Date of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City selected by
the Calculation Agent for negotiable certificates of deposit of major
United States money center banks (in the market for negotiable certificates
of deposit) with a remaining maturity closest to the Index Maturity
specified in the pricing supplement in the denomination of $5,000,000.
If the dealers so selected by the Calculation Agent are not so quoting
such rates, the CD Rate determined as of such CD Interest Determination
Date will be the rate of interest then in effect on such CD Interest
Determination Date.
LIBOR NOTES. LIBOR Notes are Floating Rate Notes that bear interest at an
interest rate calculated with reference to LIBOR and the Spread and Spread
Multiplier, if any, specified in such Notes and in the applicable pricing
supplement.
The 'LIBOR Determination Date' relating to an Interest Reset Date will be
the second London Banking Day preceding such Interest Reset Date. Unless the
pricing supplement states
S-10
<PAGE>
<PAGE>
otherwise, LIBOR with respect to any Interest Reset Date will be determined by
the Calculation Agent in accordance with the following provisions:
If 'LIBOR Reuters' is specified as the reporting service in the
pricing supplement, LIBOR will be the arithmetic mean of the offered rates
for deposits in the Index Currency (as defined below) having the Index
Maturity designated in the pricing supplement, commencing on such Interest
Reset Date, that appear on the Designated LIBOR Page (as defined below) as
of 11:00 A.M., London time, on that LIBOR Determination Date, if at least
two such offered rates appear; provided, however that if the specified
Designated LIBOR Page by its terms provides only for a single rate then
such single rate will be used.
If 'LIBOR Telerate' is specified as the reporting service in the
pricing supplement, LIBOR will be the rate for deposits in the Index
Currency having the Index Maturity designated in the pricing supplement,
commencing on such Interest Reset Date, that appears on the Designated
LIBOR Page as of 11:00 A.M., London time, on that LIBOR Determination Date.
If fewer than two offered rates appear, or no rate appears, as
applicable, LIBOR in respect of the related LIBOR Determination Date will
be determined as follows:
The Calculation Agent will request the principal London offices of
each of four major reference banks in the London interbank market, as
selected by the Calculation Agent, to provide the Calculation Agent with
its offered quotation for deposits in the Index Currency for the period of
the Index Maturity designated in the pricing supplement, commencing on such
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Determination Date and
in a principal amount of not less than $1,000,000 (or the equivalent in the
Index Currency, if the Index Currency is not the U.S. dollar) that is
representative for a single transaction in such Index Currency in such
market at such time.
If at least two such quotations are provided, LIBOR determined on such
LIBOR Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR determined on such
LIBOR Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M. (or such other time specified in the pricing
supplement), in the applicable Principal Financial Center for the country
of the Index Currency on such LIBOR Determination Date, by three major
banks in such Principal Financial Center selected by the Calculation Agent
for loans in the Index Currency to leading European banks, having the Index
Maturity designated in the pricing supplement and in a principal amount of
not less than $1,000,000 (or the equivalent in the Index Currency, if the
Index Currency is not the U.S. dollar) that is representative for a single
transaction in such Index Currency in such market at such time.
If the banks so selected by the Calculation Agent are not quoting as
mentioned in the above sentence, the rate of interest determined on such
LIBOR Determination Date will be the rate of interest then in effect on
such LIBOR Determination Date.
'Index Currency' means the currency (including composite currencies)
specified in the pricing supplement as the currency for which LIBOR shall be
calculated. If no such currency is specified in the applicable pricing
supplement, the Index Currency shall be U.S. dollars.
'Designated LIBOR Page' means either (a) if 'LIBOR Reuters' is designated
in the pricing supplement, the display designated as page 'LIBO' with respect to
the applicable Index Currency on the Reuters Monitor Money Rates Service (or
such other page as may replace page 'LIBO' on such service for the purpose of
displaying the London interbank rates of major banks for the applicable Index
Currency), or (b) if 'LIBOR Telerate' is designated in the pricing supplement,
the display designated as page '3750' with respect to the applicable Index
Currency on Bridge Telerate, Inc. (or such other page as may replace page '3750'
on such service or such other service as may be nominated by the British
Bankers' Association for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency). If neither LIBOR Reuters nor
LIBOR Telerate is specified in the pricing supplement, LIBOR for the applicable
S-11
<PAGE>
<PAGE>
Index Currency will be determined as if LIBOR Telerate (and, if the U.S. dollar
is the Index Currency, Page 3750) had been specified.
TREASURY RATE NOTES. Treasury Rate Notes are Floating Rate Notes that bear
interest at an interest rate calculated with reference to the Treasury Rate and
the Spread and Spread Multiplier, if any, specified in such Notes and in the
applicable pricing supplement.
The 'Treasury Rate Determination Date' pertaining to an Interest Reset Date
will be the day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. Treasury bills are normally sold at
auction on Monday of each week. If Monday is a legal holiday, then such auction
is normally held on the following Tuesday, except that such auction may be held
on the preceding Friday. If, as the result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Treasury Rate
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any day that would otherwise
be an Interest Reset Date for a Treasury Rate Note, then such Interest Reset
Date shall instead be the Business Day immediately following such auction date.
Unless the pricing supplement states otherwise, on the Calculation Date,
the Calculation Agent will determine the Treasury Rate as of the Treasury Rate
Determination Date and that rate will be effective on the related Interest Reset
Date. Such 'Treasury Rate' shall be the rate for the auction held on such
Treasury Rate Determination Date of direct obligations of the United States
('Treasury bills') having the Index Maturity designated in the pricing
supplement, as published in H.15(519) under the heading 'U.S. Government
Securities -- Treasury bills -- auction average (investment).'
The following procedures will be followed if the Treasury Rate cannot be
determined as described above:
In the event the above rate is not so published by 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Treasury Rate
Determination Date, the Treasury Rate will be the auction average rate
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) as otherwise announced by the
United States Department of the Treasury.
In the event that the results of the auction of Treasury bills having
the Index Maturity designated in the pricing supplement are not published
or reported as provided above by 3:00 P.M., New York City time, on such
Calculation Date or if no such auction is held on such Treasury Rate
Determination Date, then the Calculation Agent will calculate the Treasury
Rate to be a yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Rate
Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the pricing supplement.
If the dealers selected as aforesaid by the Calculation Agent are not
quoting bid rates as mentioned in the above sentence, the rate of interest
determined as of such Treasury Rate Determination Date will be the rate of
interest then in effect on such Treasury Rate Determination Date.
PRIME RATE NOTES. Prime Rate Notes are Floating Rate Notes that bear
interest at an interest rate calculated with reference to the Prime Rate and the
Spread and Spread Multiplier, if any, specified in such Notes and in the
applicable pricing supplement.
The 'Prime Rate Interest Determination Date' relating to an Interest Reset
Date will be the second Business Day preceding such Interest Reset Date. Unless
the pricing supplement states otherwise, on the Calculation Date, the
Calculation Agent will determine the Prime Rate as of the Prime Rate Interest
Determination Date and that rate will be effective on the related Interest Reset
Date. Such 'Prime Rate' shall be the rate on such Prime Rate Interest
Determination Date as published in H.15(519) under the heading 'Prime Bank
Loan.'
S-12
<PAGE>
<PAGE>
The following procedures will be followed if the Prime Rate cannot be
determined as described above:
In the event that such rate is not published by 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Prime Rate Interest
Determination Date, the Calculation Agent will calculate the Prime Rate to
be the arithmetic mean of the rates of interest publicly announced by each
bank named on the 'Reuters Screen USPRIME1' (as defined below) as such
bank's prime rate or base lending rate as in effect for such Prime Rate
Interest Determination Date. 'Reuters Screen USPRIME1' means the display
designated as page 'USPRIME1' on the Reuters Monitor Money Rates Service
(such term to include such other page as may replace the page USPRIME1 on
that Service for the purpose of displaying prime rates or base lending
rates of major United States banks).
If fewer than four such rates appear on the 'Reuters Screen USPRIME1'
for such Prime Rate Interest Determination Date, the Calculation Agent will
calculate the Prime Rate to be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days elapsed divided by 360 as
of the close of business on such Prime Rate Interest Determination Date by
at least two major money center banks in New York City selected by the
Calculation Agent from a list of at least three such banks approved by the
company.
If fewer than two such rates are quoted by the banks selected in
accordance with the above sentence, the Calculation Agent will calculate
the Prime Rate to be the arithmetic mean of the prime rates furnished in
New York City by an appropriate number (in the judgment of the Calculation
Agent) of substitute banks or trust companies organized and doing business
under the laws of the United States, or any State thereof, in each case
having total equity capital of at least U.S.$500,000,000 and being subject
to supervision or examination by federal or state authority, selected by
the Calculation Agent from a list approved by the company to provide such
rate or rates.
If the banks or trust companies selected by the Calculation Agent in
accordance with the above sentence are not quoting as mentioned in the
above sentence, the rate of interest determined as of such Prime Rate
Interest Determination Date will be the rate of interest then in effect on
such Prime Rate Interest Determination Date.
CMT RATE NOTES. CMT Rate Notes are Floating Rate Notes that bear interest
at an interest rate calculated with reference to the CMT Rate and the Spread and
Spread Multiplier, if any, specified in such Notes and the applicable pricing
supplement.
The 'CMT Rate Interest Determination Date' relating to an Interest Reset
Date will be the second Business Day prior to such Interest Reset Date. Unless
the pricing supplement states otherwise, on the Calculation Date, the
Calculation Agent will determine the CMT Rate as of the CMT Rate Interest
Determination Date and that rate will be effective on the related Interest Reset
Date. Such 'CMT Rate' will be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption ' . . . Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately
3:45 P.M.,' under the column for the Designated CMT Maturity Index (as defined
below) for:
If the Designated CMT Telerate Page is 7055, such CMT Rate Interest
Determination Date.
If the Designated CMT Telerate Page is 7052, the week, or the month,
as set forth in the pricing supplement, ended immediately preceding the
week in which the related CMT Rate Interest Determination Date occurs.
The following procedures will be followed if the CMT Rate cannot be
determined as described above:
In the event such rate is no longer displayed on the relevant page, or
if not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in H.15(519) for such date.
S-13
<PAGE>
<PAGE>
If such rate is no longer published, or if not published by 3:00 P.M.,
New York City time, on the related Calculation Date, then the CMT Rate will
be such Treasury Constant Maturity rate for the Designated CMT Maturity
Index (or other United States Treasury rate for the Designated CMT Maturity
Index) for such CMT Rate Interest Determination Date as may then be
published by either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519).
If the information described in the above sentence is not provided by
3:00 P.M., New York City time, then the Calculation Agent will calculate
the CMT Rate to be a yield to maturity, based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 P.M., New York
City time, on the CMT Rate Interest Determination Date reported, according
to their written records, by three leading primary United States government
securities dealers (each, a 'Reference Dealer') in New York City selected
by the Calculation Agent. The three Reference Dealers shall be selected
from five such Reference Dealers selected by the Calculation Agent by
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ('Treasury Notes') with an original
maturity of approximately the Designated CMT Maturity Index and a remaining
term to maturity of not less than such Designated CMT Maturity Index minus
one year.
If the Calculation Agent cannot obtain three such Treasury Note
quotations, the Calculation Agent will determine the CMT Rate to be a yield
to maturity based on the arithmetic mean of the secondary market offer side
prices as of approximately 3:30 P.M. (New York City time) on the CMT Rate
Interest Determination Date of three Reference Dealers in New York City.
The three Reference Dealers shall be selected from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest), for Treasury
Notes with an original maturity of the number of years that is the next
highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of
at least $100 million. If two such Treasury Notes have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for
the Treasury Note with the shorter remaining term to maturity will be used.
If three or four (and not five) of such Reference Dealers are quoting
as described above, then the CMT Rate will be based on the arithmetic mean
of the offer prices obtained and neither the highest nor lowest of such
quotes will be eliminated.
If fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the rate of interest determined as
of such CMT Rate Interest Determination Date will be the rate of interest
then in effect on such CMT Rate Interest Determination Date.
'Designated CMT Telerate Page' means the display on Bridge Telerate, Inc.
on the page designated in the pricing supplement (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified in the pricing supplement, the Designated CMT Telerate Page shall be
7052, for the most recent week.
'Designated CMT Maturity Index' means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified in the pricing supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the pricing supplement, the
Designated CMT Maturity Index shall be 2 years.
S-14
<PAGE>
<PAGE>
AMORTIZING NOTES
We may from time to time offer Notes for which payments of principal and
interest are made in installments over the life of the Note ('Amortizing
Notes'). Interest on each Amortizing Note will be computed as set forth in the
applicable pricing supplement or in the Book-Entry Note representing such
Amortizing Note. Unless otherwise provided in such pricing supplement or in such
Book-Entry Note, payments with respect to Amortizing Notes will be applied first
to interest due and payable on such Amortizing Note and then to the reduction of
the unpaid principal amount of such Amortizing Note. A table setting forth
repayment information with respect to each Amortizing Note will be provided to
the original purchaser of such Note and will be available upon request to the
subsequent holders of such Note.
INDEXED NOTES
We may from time to time offer Indexed Notes for which the principal amount
payable at maturity, or premium or interest on which, is determined by reference
to a measure (the 'Index'). The Index will be:
(1) the rate of exchange between the specified currency for such Note
and another currency or composite currency (the 'Indexed Currency')
specified in the pricing supplement (such Indexed Notes, 'Currency Indexed
Notes');
(2) the difference in the price of a specified commodity (the 'Indexed
Commodity') on specified dates;
(3) the difference in the level of a specified stock index (the 'Stock
Index'), which may be based on U.S. or foreign stocks, on specified dates;
or
(4) such other objective price or economic measures as are described
in the pricing supplement.
The pricing supplement will set forth the manner of determining the
principal amount payable at maturity, and interest and premium, if any, on an
Indexed Note, and historical and other information concerning the Indexed
Currency, Indexed Commodity, Stock Index or other price or economic measures
used in such determination, together with information concerning tax
consequences to the holders of such Indexed Notes.
If the determination of the principal amount payable at maturity, and
interest and premium, if any, on an Indexed Note is based on an Index calculated
or announced by a third party and such third party either suspends the
calculation or announcement of such Index or changes the basis upon which such
Index is calculated (other than changes consistent with policies in effect at
the time such Indexed Note was issued and permitted changes described in the
pricing supplement), then such Index shall be calculated by an independent
calculation agent named in the pricing supplement on the same basis, and subject
to the same conditions and controls, as applied to the original third party. If
for any reason such Index cannot be calculated on the same basis and subject to
the same conditions and controls as applied to the original third party, then
the principal amount payable at maturity for such Indexed Note shall be
calculated in the manner set forth in the pricing supplement. Any determination
of such independent calculation agent shall in the absence of manifest error be
binding on all parties.
Unless the pricing supplement states otherwise, we will pay interest on an
Indexed Note based on the amount designated in the pricing supplement as the
'Face Amount' of such Indexed Note. The pricing supplement will describe whether
the principal amount of the related Indexed Note that would be payable upon
redemption or repayment prior to maturity will be:
(1) the Face Amount of such Indexed Note,
(2) the principal amount of such Indexed Note determined by referring
to the Index at the time of redemption or repayment, or
(3) another amount described in such pricing supplement.
S-15
<PAGE>
<PAGE>
DISCOUNT NOTES
We may issue a Note as a zero coupon Note or at a price which is at a
substantial discount from its principal amount (a 'Discount Note'). Upon
redemption or repayment prior to maturity or acceleration of maturity of a
Discount Note, an amount less than the principal amount of such Note shall
become due and payable. If a bankruptcy proceeding is commenced in respect of
the company, the claim of the holders of Discount Notes may be limited under
section 502(b) of Title 11 of the United States Code to the initial public
offering price of such Discount Notes, plus that portion of the original issue
discount that is amortized from the date of issue to the commencement of the
bankruptcy proceeding plus accrued interest. Accordingly, the holders of
Discount Notes under such circumstances may receive a lesser amount than they
would be entitled to under the express terms of such Discount Notes.
Unless the pricing supplement states otherwise, if a Note is a Discount
Note, the amount payable on such Note in the event of redemption or repayment
prior to its maturity shall be the Amortized Face Amount of such Note as of the
date of redemption or the date of repayment, as the case may be. The 'Amortized
Face Amount' of a Discount Note shall be the amount equal to:
(1) the issue price set forth in the pricing supplement plus
(2) the portion of the difference between the issue price and the
principal amount of such Note that has accrued at the yield to maturity set
forth in the pricing supplement (computed in accordance with generally
accepted United States bond yield computation principles) to such date of
redemption or repayment;
but in no event shall the Amortized Face Amount of a Discount Note exceed its
principal amount.
REDEMPTION AND REPURCHASE
Unless the pricing supplement states otherwise, a Note cannot be redeemed
prior to maturity. If any Note will be redeemable at the option of the company,
the applicable pricing supplement will indicate the date or dates for redemption
prior to such maturity and the price or prices payable upon such redemption,
together with accrued interest to the date of redemption. The company may redeem
any of the Notes that are redeemable and remain outstanding either in whole or
from time to time in part, upon not less than 30 nor more than 60 days' notice.
If less than all Notes with like tenor and terms are to be redeemed, the Notes
to be redeemed shall be selected by the Trustee by such method as the Trustee
shall deem fair and appropriate. Unless the pricing supplement states otherwise,
the Notes will not be subject to any sinking fund.
The company may at any time purchase Notes at any price in the open market
or otherwise. The company may, at its discretion, hold, resell or surrender such
Notes to the Trustee for cancellation.
REPAYMENT AT OPTION OF THE HOLDER
Unless the pricing supplement states otherwise, you will not have the right
to require the company to repay a Note prior to maturity. If the pricing
supplement states that you will have the right to require such repayment, the
pricing supplement will indicate the date or dates for repayment prior to
maturity, and the price or prices, together with accrued interest to the date of
repayment, payable upon such repayment.
In order for you to exercise any repayment option applicable to a Note, you
must deliver to the Trustee at least 30 days (but no more than 45 days prior to
the repayment date):
(1) the Note with the form entitled 'Option to Elect Repayment' on the
reverse of the Note duly completed or
(2) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the
United States ('Transmittal Guarantor') setting forth the name
S-16
<PAGE>
<PAGE>
of the holder of the Note, the principal amount of the Note, the principal
amount of the Note to be repaid, the certificate number or a description of
the tenor and terms of the Note. Such communication must also contain a
statement that you are exercising the option to elect repayment and
guarantee from the Transmittal Guarantor that you will deliver the Note to
be repaid with the form entitled 'Option to Elect Repayment' on the reverse
of the Note duly completed to the Trustee not later than three Business
Days after the date of such telegram, telex, facsimile transmission or
letter. Additionally, such Note and form duly completed must be received by
the Trustee by such third Business Day.
You may exercise a repayment option for less than the entire principal amount of
the Note, provided that the principal amount of the Note remaining outstanding
after repayment is an authorized denomination.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes which are:
Fixed Rate Notes that have the same issue date, maturity date, redemption
or repayment provisions, interest payment dates, interest rate and
amortization schedule will be represented by a single global security;
Floating Rate Notes that have the same issue date, maturity date,
redemption or repayment provisions, interest payment dates, Base Rate,
Initial Interest Rate, Interest Payment Dates, Index Maturity, Interest
Reset Dates, Spread or Spread Multiplier, if any, Minimum Interest Rate,
if any, and Maximum Interest Rate, if any, will be represented by a single
global security; and
Notes other than Fixed Rate Notes and Floating Rate Notes that have the
same issue date, maturity date, redemption or repayment provisions, and
interest payment dates will be represented by a single global security
(each such global security, a 'Global Security').
Each Global Security representing Book-Entry Notes will be deposited with,
or on behalf of, the depositary and registered in the name of a nominee of the
depositary. Except under circumstances described below, Book-Entry Notes will
not be exchangeable for Notes in certificated form and will not otherwise be
issuable in definitive form.
THE DEPOSITARY. The depositary has advised us that it is:
a limited-purpose trust company organized under the New York Banking Law;
a 'banking organization' within the meaning of the New York Banking Law;
a member of the Federal Reserve System;
a 'clearing corporation' within the meaning of the New York Uniform
Commercial Code; and
a 'clearing agency' registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended.
The depositary holds securities that its participants deposit with the
depositary. The depositary also facilitates the settlement among its
participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in its
participants' accounts. By doing so, the depositary eliminates the need for
physical movement of securities. The depositary's participants include
securities brokers and dealers (including the Agents), banks, trust companies,
clearing corporations, and certain other organizations, some which own the
depositary. The depositary is also owned by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by the depositary only through participants. The rules applicable to the
depositary and its participants are on file with the Securities and Exchange
Commission.
S-17
<PAGE>
<PAGE>
The depositary's management is aware that some computer applications,
systems and the like for processing data that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter 'Year 2000
problems.' The depositary has informed its participants and other members of the
financial community that it has developed and is implementing a program so that
its computer systems, as the same relate to the timely payment of distributions
(including principal and interest payments) to securityholders, book-entry
deliveries, and settlement of trades within the depositary, continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, the depositary's plan includes a
testing phase, which is expected to be complete within appropriate time frames.
However, the depositary's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third-party vendors from whom the depositary licenses
software and hardware, and third-party vendors on whom the depositary relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. The depositary has informed
the financial community that it is contacting (and will continue to contact)
third-party vendors from whom the depositary acquires services to: (i) impress
upon them the importance of such services being Year 2000 compliant; and (ii)
determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, the depositary is in the
process of developing such contingency plans as it deems appropriate.
BOOK-ENTRY FORMAT. Upon the issuance of a Global Security, the depositary
will credit its participants' account on its book-entry registration and
transfer system their respective principal amounts of the Notes represented by
such Global Security. The Agent designates which participants' accounts will be
credited, but if the Notes are offered and sold directly by us, then we will
designate such accounts. The only persons who may own beneficial interests in a
Global Security will be the depositary's participants or persons that hold
interests through such participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the depositary or its nominee (with
respect to interests of its participants) and on the records of its participants
(with respect to interests of persons other than such participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and laws may impair
your ability to transfer your interest in a Book-Entry Note.
So long as the depositary or its nominee is the registered owner of a
Global Security, the depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global
Security for all purposes under the indenture. Except as provided below or as we
may otherwise agree in our sole discretion, owners of beneficial interests in a
Global Security will not be entitled to have Notes represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Notes in definitive form and will not be considered the
owners or holders thereof under the indenture.
Principal, premium, if any, and interest payments on Notes registered in
the name of the depositary or its nominee will be made to the depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Notes. None of the company, the Trustee, any paying agent or
the registrar for such Notes will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
interests in such Global Security for such Notes or for maintaining, supervising
or reviewing any records relating to such beneficial interests.
We expect that the depositary for the Notes or its nominee, upon receipt of
any payment of principal, premium or interest, will credit immediately its
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
for such Notes as shown on the records of the depositary or its nominee. We also
expect that payments by such participants to owners of beneficial interest in
such Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in
S-18
<PAGE>
<PAGE>
'street name' (i.e., the name of a securities broker or dealer). Such payments
will be the responsibility of such participants.
ISSUANCE OF NOTES IN DEFINITIVE FORM. If the depositary is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by us within 90 days, we will issue Notes in definitive form in
exchange for the entire Global Security representing such Notes. In addition, we
may at any time, and in our sole discretion, determine not to have the Notes
represented by Global Securities and, in such event, will issue Notes in
definitive form in exchange for the Global Securities representing such Notes.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Notes represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Notes registered in its name. Notes so issued in definitive form
will be issued as registered Notes in denominations that are integral multiples
of $1,000 (or the appropriate increment of the specified currency, as the case
may be), unless otherwise specified by us.
DESCRIPTION OF GUARANTEE
Newcourt will unconditionally guarantee the due and punctual payment of the
principal, premium, if any, and interest on the Notes when and as the same shall
become due and payable, whether at maturity, upon redemption, or otherwise. The
Guarantee will rank equally with all other unsecured and unsubordinated
obligations of Newcourt. The right of Newcourt and, hence, the right of
creditors of Newcourt (including holders of the Notes, as beneficiaries of the
Guarantee) to participate in any distribution of the assets of any subsidiary of
Newcourt, whether upon liquidation, reorganization, or otherwise, is subject to
prior claims of creditors of each such subsidiary, except to the extent that
claims of Newcourt itself as a creditor of a subsidiary may be allowed.
FOREIGN CURRENCY AND INDEXED NOTE RISKS
FOREIGN CURRENCY RISKS
GENERAL. You should note that if you invest in Notes that are denominated
in a currency other than United States dollars, you will be assuming significant
risks that are not associated with a similar investment in a security
denominated in United States dollars. We have summarized some, but not all, of
such risks in this prospectus supplement. Such risks include the possibility
that the rates of exchange between the United States dollar and the various
foreign currencies will change significantly and the possibility that the United
States or any foreign government will impose or modify foreign exchange
controls. Such risks generally depend on economic and political events over
which we have no control. In recent years, rates of exchange between United
States dollars and certain foreign currencies have been highly volatile and such
volatility may be expected to continue in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in such rate that may occur during the term
of any Note. Depreciation of the currency specified in a Note against the United
States dollar would result in a decrease in the effective yield of such Note
below its coupon rate, and under certain circumstances could result in a loss to
you on a United States dollar basis.
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE ATTACHED
PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED
IN A FOREIGN CURRENCY OR A CURRENCY UNIT AND WE DISCLAIM ANY RESPONSIBILITY TO
ADVISE YOU OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. YOU SHOULD CONSULT YOUR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS OF INVESTING IN NOTES DENOMINATED
IN CURRENCIES OTHER THAN UNITED STATES DOLLARS. SUCH NOTES ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
Notes denominated in foreign currencies other than Euros will generally not
be sold in, or to residents of, the country of the currency in which such Notes
are denominated.
The information set forth in this prospectus supplement is directed to
prospective purchasers who are United States residents, and we disclaim any
responsibility to advise prospective
S-19
<PAGE>
<PAGE>
purchasers who are residents of countries other than the United States with
respect to any matters that may affect the purchase, holding or receipt of
payments of principal of and premium and interest, if any, on the Notes. Such
persons should consult their own financial and legal advisors with regard to
such matters.
GOVERNING LAW AND JUDGMENTS. Our Notes will be governed by and construed in
accordance with the laws of the State of New York. In the event an action based
on Notes denominated in a currency other than United States dollars were
commenced in a New York court, it is likely that the court would grant judgment
only in United States dollars. It is not clear, however, whether in granting
that judgment, the court would use the rate of conversion into United States
dollars that would be in effect on the date of default, the date the judgment
was rendered, or some other date.
EXCHANGE CONTROLS AND AVAILABILITY OF SPECIFIED CURRENCY. Governments have
imposed from time to time, and may in the future impose, exchange controls which
could affect exchange rates as well as the availability of United States dollars
or foreign currencies at the time of payment of principal of, and premium, if
any, or interest on a Note. In the case of any Note issued in a currency that is
not currently subject to exchange controls, there can be no assurance that the
absence of exchange controls will continue to exist. Even if there are no actual
exchange controls, it is possible that the specified currency for any particular
Note would not be available at such Note's maturity. In that event, we would
make required payments in United States dollars on the basis of the Market
Exchange Rate on the date of such payment, or if such rate of exchange is not
then available, on the basis of the Market Exchange Rate as of the most recent
record date.
Information concerning exchange rates for a currency specified for any
particular Note, if other than United States dollars, in which principal of,
premium, if any, and interest on such Note is payable, as against the United
States dollar at selected times during the last five years, as well as any
exchange controls affecting such currencies, will be set forth in the pricing
supplement.
INDEXED NOTE RISKS
You should note that if you invest in Notes indexed, as to principal or
interest or both, to one or more values of currencies (including exchange rates
between currencies), commodities or interest rate indices, you will be assuming
significant risks that are not associated with similar investments in a
conventional debt security. During the time while you own an Indexed Note, it
may have an interest rate that is less than that payable on a conventional debt
security issued at the same time, and it is possible that no interest will paid
to you. Furthermore, the terms of an Indexed Note may permit the principal
amount payable at maturity to be less than the original purchase price of such
Indexed Note, and it is possible that no principal will be paid to you. The
secondary market for such Indexed Notes will be affected by a number of factors,
independent of the creditworthiness of the company and the value of the
applicable currency, commodity or interest rate index, including the volatility
of the applicable currency, commodity or interest rate index, the time remaining
to the maturity of such Indexed Notes, the amount outstanding of such Indexed
Notes and market interest rates. The value of the applicable currency, commodity
or interest rate index depends on a number of interrelated factors, including
economic, financial and political events, over which we have no control.
Additionally, if the formula used to determine the principal amount or interest
payable with respect to such Indexed Notes contains a multiple or leverage
factor, the effect of any change in the applicable currency, commodity or
interest rate index may be increased. You should not assume that the historical
experience of the relevant currencies, commodities or interest rate indices can
serve as predictors of future performance of such currencies, commodities or
interest rate indices during the term of any Note. ACCORDINGLY, YOU SHOULD
CONSULT YOUR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS OF INVESTING IN
INDEXED NOTES AND THE SUITABILITY OF SUCH NOTES IN LIGHT OF YOUR PARTICULAR
CIRCUMSTANCES.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of Notes constitutes the
opinion of Sidley & Austin, special tax counsel to the company. This summary is
based on the Internal Revenue Code of 1986, as
S-20
<PAGE>
<PAGE>
amended to the date hereof (the 'Code'), administrative pronouncements, judicial
decisions and existing and proposed Treasury Regulations, changes to any of
which subsequent to the date of this prospectus supplement may affect the tax
consequences described herein, possibly with retroactive effect.
This summary of material federal income tax consequences has been prepared
in compliance with the directive of the SEC that 'plain English' be used. As a
result, certain of the complex technical rules which may apply to some investors
have not been included. Also, the descriptions of the relevant tax rules are
intended to explain the general application of the rules. This summary does not
attempt to explain fully every relevant technical aspect of the applicable tax
provisions.
The first part of this summary, captioned 'General Tax Consequences,'
describes the tax consequences for what is expected to be the typical investment
situation. Following the description of General Tax Consequences, under the
heading 'Special Tax Rules,' are summaries of various special federal tax
provisions which may apply in certain circumstances or to certain investors but
should not be relevant to the typical investment situation. The description of
General Tax Consequences provides a summary of federal income tax consequences
for investors who are citizens or residents of the United States and who
purchase U.S. dollar denominated Notes for investment (rather than acting as a
dealer in securities) at the initial offering price of the Notes (plus accrued
interest, if any). Other investors, including investors who are foreign persons
or who purchase Notes at a price which is higher or lower than the Note's
initial offering price, should review the summaries of the Special Tax Rules.
The description of General Tax Consequences assumes that the Notes provide for
the payment of interest at a fixed rate or at a variable rate which is tied to
LIBOR, U.S. Treasury rates, bank prime rates or similar benchmark rates.
Interest payable pursuant to those types of fixed and variable rates is referred
to for certain federal income tax purposes as qualified stated interest. If a
Note provides for interest other than qualified stated interest, the tax
consequences to an investor may differ from those described in this summary.
This summary also assumes that the Notes have a fixed maturity date of more than
one year. EACH PROSPECTIVE INVESTOR SHOULD CONSULT A TAX ADVISOR TO DETERMINE
WHETHER ANY OF THE SPECIAL TAX RULES ARE APPLICABLE TO ITS PARTICULAR SITUATION.
GENERAL TAX CONSEQUENCES
PAYMENTS OF INTEREST. An investor will be taxed on the amount of payments
of interest on a Note as ordinary interest income at the time it accrues or is
received in accordance with the investor's regular method of accounting for
United States federal income tax purposes.
SALE OR OTHER DISPOSITION OF A NOTE. An investor who disposes of a Note,
whether by sale, exchange for other property, or payment by the company, will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale or other disposition (not including any amount attributable
to accrued but unpaid interest) and the investor's adjusted tax basis in the
Note. In general, an investor's adjusted tax basis in a Note will be equal to
the initial purchase price. Any gain or loss recognized upon the sale or other
disposition of a Note will be capital gain or loss. For non-corporate investors,
capital gain recognized on the sale or other disposition of a Note held by the
investor for more than one year will be taxed at a maximum rate of 20%. Capital
gain for a Note held for one year or less is taxed at the rates applicable to
ordinary income (i.e., up to 39.6%). Taxpayers must aggregate capital gains and
losses for each taxable year. In the event a taxpayer realizes a net capital
loss for any year there are limits on the amount of such capital losses which
can be deducted.
INFORMATION REPORTING AND BACKUP WITHHOLDING. The company (or an agent
acting on its behalf) will be required to report annually to the Internal
Revenue Service, and to each non-corporate Noteholder, the amount of interest
paid on the Notes for each calendar year. Each non-corporate Noteholder (other
than Noteholders who are not subject to the reporting requirements) will be
required to provide, under penalties of perjury, a certificate (Form W-9)
containing the Noteholder's name, address, correct federal taxpayer
identification number and a statement that the Noteholder is not subject to
backup withholding. Should a non-exempt Noteholder fail to provide the required
certification, the company will be required to withhold (or cause to be
withheld) 31%
S-21
<PAGE>
<PAGE>
of the interest otherwise payable to the Noteholder and remit the withheld
amounts to the Internal Revenue Service as a credit against the Noteholder's
federal income tax liability.
SPECIAL TAX RULES
SPECIAL TYPES OF INVESTORS. The reference to United States citizens or
residents in the description of General Tax Consequences set forth above applies
not only to individuals but also to any investor who is: (1) a corporation or
partnership created or organized in or under the laws of the United States or of
any political subdivision thereof, (2) an estate the income of which is subject
to United States federal income taxation regardless of its source, or (3) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
Any investor which is not a United States citizen or resident should review the
summary below for investment in Notes by foreign persons. This summary of
Material Federal Income Tax Consequences does not describe tax consequences to
special classes of investors, including investors who are dealers in securities
or currencies, persons holding Notes as a part of a hedging transaction, certain
financial institutions or insurance companies.
PURCHASE AT A DISCOUNT. An investor who purchases a Note as part of the
initial offering by the company for an issue price that is less than its 'stated
redemption price at maturity' will generally be considered to have purchased the
Note at an original issue discount for United States federal income tax purposes
unless the original issue discount is de minimis. In general, the stated
redemption price at maturity for a Note is equal to the principal amount plus
all other amounts payable in respect of the Note other than qualified stated
interest. If a Note is acquired with original issue discount the investor will
be required to include in income each year, taxable as ordinary income in the
same manner as cash interest payments, a portion of the original issue discount.
For cash basis investors, such as individuals, the requirement that original
issue discount be accrued as income each year means the investor recognizes
taxable income even though the investor does not receive cash corresponding to
that income. In general, the amount of original issue discount accrued as income
each year is based upon a formula which looks at the constant yield on the Notes
and the term to maturity. Under these rules, investors generally will be
required to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
In determining whether a Note has original issue discount, the issue price
of the Note may not necessarily equal the investor's purchase price (although
they generally should be the same). The issue price of a Note will equal the
initial offering price to the public (not including bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters or
wholesalers) at which price a substantial amount of the Notes is sold.
If an investor acquires a Note in a secondary market transaction for a
purchase price which is less than the principal amount or other amount payable
at maturity of the Note, the difference is referred to for tax purposes as
market discount. Similarly to original issue discount, an investor must accrue a
portion of the market discount each year. The amount of market discount which
accrues annually will be calculated on a straight-line basis over the remaining
term to maturity of the Note unless the investor elects to accrue market
discount using the constant yield method (i.e., the original issue discount
method). Unlike original issue discount, however, an investor does not include
accrued market discount in ordinary income each year. Rather, the aggregate
amount of accrued market discount is included in income when an investor sells
or otherwise disposes of the Note. At that time, the portion of the amount
realized by the investor on the sale or other disposition of the Note equal to
accrued market discount is taxed as ordinary income (maximum tax rate of 39.6%)
rather than long term capital gain (maximum tax rate of 20%).
If an investor would prefer to be taxed on the annual accrual of market
discount each year rather than being taxed on the aggregate amount of all
accrued market discount when the Note is sold or otherwise disposed of, the
investor can file an election to do so. Such an election would apply to all of
the investor's debt investments acquired in or after the taxable year in which
the Notes are acquired and not just to the Notes.
S-22
<PAGE>
<PAGE>
An investor's adjusted basis in a Note is increased by the amount of
original issue discount or market discount accrued and included in income and is
decreased by the amount of payments (other than qualified stated interest). As a
result, the investor would recognize a lower capital gain (or greater capital
loss) on the sale or other disposition of the Note.
In general, if the amount of original issue discount or market discount
would be less than 1/4th of one percent of the Note's stated redemption price at
maturity multiplied by the number of complete years to maturity, the original
issue discount or market discount is treated as de minimis and the investor can
disregard the original issue discount or market discount rules.
PURCHASE AT A PREMIUM. If an investor purchases a Note for a price that
exceeds the principal amount or other amount payable at maturity, the investor
will be considered to have an amortizable bond premium. An investor can elect to
accrue a portion of the premium each year as an offset to interest income on the
corresponding Note. The amount of premium which can be amortized each year is
calculated using a constant yield method over the remaining term to maturity of
the Note. Amortizable bond premium is available only to offset interest income
on the corresponding Note; it cannot be used as a deduction to the extent it
exceeds taxable interest on the Note. The adjusted tax basis which an investor
has in a Note must be reduced by the amount of premium which is an offset to
interest income. Because the basis is reduced, the investor would recognize a
larger taxable capital gain (or a smaller capital loss) on the sale or other
disposition of the Note. If an investor elects to amortize bond premium, the
election will apply to all of the investor's debt investments and not just to
the Notes.
FOREIGN CURRENCY NOTES. The description of General Tax Consequences assumes
the Notes are denominated in U.S. dollars. Special rules apply to Notes which
are denominated in or determined by reference to the value of currency units
other than the U.S. dollar.
An interest payment on a foreign currency Note will be includible in income
by a cash basis investor based on the U.S. dollar value of the foreign currency
payment determined on the date the payment is received, regardless of whether
the payment is in fact converted to U.S. dollars at that time.
In the case of interest income on a foreign currency Note that is required
to be included in income by the investor prior to receipt of payment (e.g.,
original issue discount accrual) the investor will be required to include in
income the U.S. dollar value of the amount of interest income that has accrued.
Unless the investor makes the election discussed in the next paragraph, the U.S.
dollar value of such accrued income will be determined by translating such
income at the average rate of exchange for the accrual period. Subsequently,
when the investor actually receives cash corresponding to the accrued income,
the investor will recognize, as ordinary gain or loss, foreign currency exchange
gain or loss reflecting fluctuations in currency exchange rates between the last
day of the relevant accrual period and the date of payment.
Under the so-called 'spot rate convention election,' an investor may elect
to translate accrued interest income into U.S. dollars at the exchange rate in
effect on the last day of the relevant accrual period. Additionally, if a
payment of such income is actually received within five business days of the
last day of the accrual period or taxable year, an electing investor may instead
translate such income into U.S. dollars at the exchange rate in effect on the
day of actual receipt. Any such election will apply to all debt instruments held
by the investor at the beginning of the first taxable year to which the election
applies or thereafter acquired by the investor.
In order for an investor to calculate the amount of gain or loss recognized
on the sale or other disposition of a Note denominated in (or by reference to) a
foreign currency, the investor must know the adjusted tax basis in U.S. dollars.
In general, if an investor pays for a Note with foreign currency, the investor's
basis in the Note is equal to the U.S. dollar value of the foreign currency on
the purchase date. An investor that purchases a foreign currency Note with
previously owned foreign currency will recognize ordinary income or loss in an
amount equal to the difference, if any, between the investor's tax basis in the
foreign currency and the U.S. dollar value of the foreign currency Note on the
date of purchase.
For purposes of determining the amount of any gain or loss recognized by
the investor on the sale or other disposition of a foreign currency Note, the
amount realized by the investor from the
S-23
<PAGE>
<PAGE>
sale or other disposition generally will be the U.S. dollar value of the foreign
currency received determined on the date of disposition in the case of an
accrual basis investor and on the date payment is received in the case of a cash
basis investor.
The portion of any gain or loss realized upon the sale or other disposition
of a foreign currency Note that is attributable to fluctuations in currency
exchange rates will be ordinary income or loss. Such portion will equal the
difference between (1) the U.S. dollar value of the foreign currency principal
amount of the Note determined on the date the Note is disposed of and (2) the
U.S. dollar value of the foreign currency principal amount of the Note
determined on the date the investor acquired such Note. Such foreign currency
gain or loss will be recognized only to the extent of the total gain or loss
realized by an investor on the sale or other disposition of the foreign currency
Note. Any gain or loss recognized in excess of such foreign currency gain or
loss will be capital gain or loss.
Discount and premium calculations with respect to a foreign currency Note
are determined in the relevant foreign currency. The amount of discount or
premium that is included in or reduces income currently is determined for any
accrual period in the relevant foreign currency and then translated into U.S.
dollars on the basis of the average exchange rate in effect during such accrual
period or with reference to the spot rate convention election as described
above. Exchange gain or loss realized with respect to such accrued discount or
premium is determined and recognized in accordance with the rules described
above.
FOREIGN INVESTORS. Special tax rules apply to the purchase of Notes by
foreign persons. For U.S. tax purposes, foreign investors include any person who
is not (1) a citizen or resident of the United States, (2) a corporation,
partnership or other entity organized in or under the laws of the United States
or any political subdivision thereof, (3) an estate the income of which is
includible in gross income for U.S. federal income tax purposes regardless of
its source, or (4) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust.
Interest paid or accrued to a foreign investor that is not effectively
connected with the conduct of a trade or business within the United States by
the investor will generally be considered 'portfolio interest' and generally
will not be subject to United States federal income tax or withholding tax as
long as the foreign investor (1) is not actually or constructively a 10%
shareholder of the company or a controlled foreign corporation related to the
company through stock ownership and (2) provides (or has a financial institution
provide on its behalf) an appropriate statement (Form W-8 BEN) to the company or
paying agent that is signed under penalties of perjury, certifying that the
beneficial owner of the Note is a foreign person and providing that foreign
person's name and address. If the information provided in this statement
changes, the foreign investor must provide a new Form W-8 BEN within 30 days.
The Form W-8 BEN is generally effective for three years unless the Form W-8 BEN
includes a federal taxpayer identification number, in which case the form is
effective until the information contained on the Form W-8 BEN changes. If a
foreign investor were to fail to satisfy these requirements so that interest on
the investor's Notes were not portfolio interest, interest payments would be
subject to United States federal income and withholding tax at a rate of 30%
unless reduced or eliminated pursuant to an applicable income tax treaty. To
qualify for any reduction as the result of an income tax treaty, the foreign
investor must provide the paying agent with Form W-8 BEN, which, as of January
1, 2000, will require a foreign investor to provide a federal taxpayer
identification number.
Any capital gain realized on the sale or other taxable disposition of a
Note by a foreign investor will be exempt from United States federal income and
withholding tax, provided that (1) the gain is not effectively connected with
the conduct of a trade or business in the United States by the investor and (2)
in the case of an individual foreign investor, the investor is not present in
the United States for 183 days or more during the taxable year. If an individual
foreign investor is present in the U.S. for 183 days or more during the taxable
year, the gain on the sale
S-24
<PAGE>
<PAGE>
or other disposition of the Notes could be subject to a 30% withholding tax
unless reduced by an applicable income tax treaty.
If the interest, gain or income on a Note held by a foreign investor is
effectively connected with the conduct of a trade or business in the United
States by the investor, the foreign investor (although exempt from the
withholding tax previously discussed if an appropriate statement (Form W-8 ECI)
is furnished to the paying agent) generally will be subject to United States
federal income tax on the interest, gain or income at regular federal income tax
rates. Form W-8 ECI is effective for three calendar years. In addition, if the
foreign investor is a foreign corporation, it may be subject to a branch profits
tax equal to 30% of its 'effectively connected earnings and profits' for the
taxable year, as adjusted for certain items, unless it qualifies for a lower
rate under an applicable income tax treaty.
If a foreign investor fails to provide necessary documentation to the
company or its paying agent regarding the investor's taxpayer identification
number or certification of exempt status, a 31% backup withholding tax may be
applied to Note payments to that investor. Any amounts withheld under the backup
withholding rules will be allowed as a refund or a credit against the foreign
investor's U.S. federal income tax liability provided the required information
is furnished to the Internal Revenue Service.
STATE AND LOCAL TAX CONSEQUENCES
Because of the differences in state and local tax laws and their
applicability to different investors, it is not possible to summarize the
potential state and local tax consequences of purchasing, holding or disposing
of the Notes. ACCORDINGLY, PURCHASERS OF NOTES SHOULD CONSULT THEIR OWN TAX
ADVISERS REGARDING THE STATE AND LOCAL TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF NOTES.
PLAN OF DISTRIBUTION
Unless the pricing supplement states otherwise, we will offer the Notes on
a continual basis through investment banking firms, or 'Agents,' who have agreed
to use their reasonable best efforts to solicit purchases of the Notes. We will
pay an Agent a commission, in the form of a discount ranging from .050% to .750%
of the principal amount of the Note sold through it as agent, depending upon
maturity of the Note, except that the commission payable by us to the Agents
with respect to Notes with maturities of greater than thirty years will be
negotiated at the time we issue such Notes.
We also may sell the Notes to any Agent, acting as principal, or to a group
of underwriters for whom one or more Agents are acting as representatives, at a
discount to be agreed upon at the time of sale (or if no compensation is
indicated, in accordance with the schedule of commissions applicable to a sale
of Notes on an agency basis), for resale to investors or dealers at varying
prices related to prevailing market prices at the time of resale, to be
determined by the Agents or, if so agreed, at a fixed public offering price. The
Agent, acting as principal, may sell Notes it has purchased from us to other
dealers for resale to investors and other purchasers, and may allow any portion
of the discount received in connection with such purchase from us to such
dealers. After the initial public offering of Notes, the public offering price
(in the case of Notes to be resold at a fixed public offering price), the
concession and the discount may be changed.
In addition, we may arrange for the Notes to be sold through other agents,
dealers or underwriters under terms comparable to those described above, or we
may sell the Notes directly to investors on our own behalf in those
jurisdictions where we are authorized to do so. In the case of sales made
directly by us, no commission will be payable.
We have the sole right to accept offers to purchase Notes and may reject
any proposed purchase of Notes in whole or in part. The Agents will have the
right, in their reasonable discretion, to reject any offer to purchase Notes
received by them in whole or in part.
The company and Newcourt have agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments
S-25
<PAGE>
<PAGE>
they may be required to make in respect thereof. The Agents may be deemed to be
'underwriters' within the meaning of the Securities Act.
We may offer an additional series of our medium-term notes outside the
United States to prospective foreign investors. Such other series of medium-term
notes may have terms substantially similar to the terms of the Notes offered
hereby (but will constitute a separate series for purposes of the indenture),
and will be offered in bearer form only. Such other series of medium-term notes
will reduce correspondingly the principal amount of Notes which we may offer by
this prospectus supplement and the prospectus. In addition, the amount of Notes
which we may offer will be reduced by the aggregate principal amount of any
other securities and the purchase price of any warrants issued by us inside or
outside the United States under the Registration Statement.
No Note will have an established trading market when issued. Each of the
Agents may from time to time purchase and sell Notes in the secondary market,
but is not obligated to do so, and there can be no assurance that there will be
a secondary market for the Notes or liquidity in the secondary market if one
develops. From time to time, each of the Agents may make a market in the Notes.
S-26
<PAGE>
<PAGE>
PROSPECTUS
U.S. $6,000,000,000
[LOGO]
By This Prospectus, We May Offer --
DEBT SECURITIES, DEBT WARRANTS, CURRENCY WARRANTS,
INDEX WARRANTS AND INTEREST RATE WARRANTS
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
[LOGO]
------------------------
AT&T Capital Corporation, an indirect wholly-owned subsidiary of Newcourt
Credit Group Inc., may offer and sell the securities listed above with an
aggregate offering price of up to U.S. $6,000,000,000, or its equivalent in one
or more foreign currencies or currency units.
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus, the applicable prospectus
supplement and the related pricing supplement, if any, before you invest.
This prospectus may not be used to offer and sell securities unless
accompanied by a prospectus supplement and, in some cases, a pricing supplement.
The securities are not guaranteed or supported in any way by AT&T Corp.
AT&T Capital Corporation is not owned by, or an affiliate of, AT&T Corp.
------------------------
SEE 'RISK FACTORS' ON PAGE 4 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THESE SECURITIES.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED BY THIS
PROSPECTUS OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This prospectus is dated March 19, 1999.
<PAGE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement (including any
amendments and exhibits, the 'Registration Statement') that AT&T Capital and
Newcourt filed with the Securities and Exchange Commission utilizing a 'shelf'
registration process. Under this shelf process, we may sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of U.S. $6,000,000,000. This prospectus provides you with a
general description of the securities that we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. If the prospectus supplement
specifies, we may also provide information in a pricing supplement. The
prospectus supplement and any accompanying pricing supplement may also add,
update or change information contained in this prospectus. You should read both
this prospectus and the applicable prospectus supplement and any accompanying
pricing supplement together with the additional information described under the
heading 'Where You Can Find More Information' prior to purchasing any of the
securities offered by this prospectus.
In this prospectus, we refer to:
AT&T Capital Corporation as the 'company' or 'AT&T Capital';
Newcourt Credit Group Inc. as the 'guarantor' or 'Newcourt'; and
the Debt Securities, Debt Warrants, Currency Warrants, Index Warrants and
Interest Rate Warrants that AT&T Capital may offer by this prospectus as
the 'Securities.'
WHERE YOU CAN FIND MORE INFORMATION
The company and Newcourt have filed with the Securities and Exchange
Commission a Registration Statement on Form F-3, pursuant to the Securities Act
of 1933, with respect to the securities and the guarantee of the securities
offered by this prospectus. This prospectus, which constitutes a part of the
Registration Statement, does not contain all the information included in the
Registration Statement. You may read copies of the Registration Statement and
the exhibits, without charge, at the Commission's offices, or obtain copies of
these documents from the Commission's Public Reference Section by paying the
copying fees.
Newcourt is subject to the information and reporting requirements of the
Securities Exchange Act of 1934. Newcourt files periodic reports and other
information with the Commission. You may read these reports and other
information filed by Newcourt, without charge, or obtain copies for a fee, from
the Commission's Public Reference Section. Please call the Commission at
1-800-SEC-0330 for more information on the public reference rooms. You can also
find many of these documents on the Commission's Web site at http://www.sec.gov.
The company was previously subject to the information and reporting
requirements of the Exchange Act. However, the company is no longer required to
file such reports and information. Summarized financial information concerning
the company will be included in a footnote to the financial statements contained
in Newcourt's Exchange Act reports.
Statements made in this prospectus concerning the provisions of any
contract, agreement or other document referred to are not necessarily complete.
You are urged to read each referenced contract, agreement or other document in
its entirety. All the documents are filed as exhibits to the Registration
Statement or to documents incorporated by reference in this propectus.
Both the company and Newcourt have elected to 'incorporate by reference'
into this prospectus other documents filed with the Commission by each of them.
As allowed by the Commission, the documents incorporated by reference into this
document are considered part of this document. The company and Newcourt can
disclose important information to you in this document by referring to these
other documents.
The company incorporates by reference the following documents previously
filed with the Commission (File No. 001-11237):
the company's Annual Report on Form 10-K for the year ended December 31,
1997;
2
<PAGE>
<PAGE>
the company's Quarterly Reports on Forms 10-Q for the quarters ended
March 31, 1998 and June 30, 1998; and
the company's Current Reports on Form 8-K dated October 2, 1998,
September 1, 1998, March 9, 1998, March 4, 1998, February 20, 1998,
February 9, 1998, January 12, 1998, January 5, 1998 and November 19, 1997,
respectively and the company's Current Reports on Form 8-K/A dated March
17, 1998 (amending the Report on Form 8-K dated January 12, 1998),
February 18, 1998 (amending the Report on Form 8-K dated February 9, 1998)
and February 11, 1998 (amending the Report on Form 8-K dated November 19,
1997).
Newcourt incorporates by reference the following documents previously filed
with the Commission (File No. 001-14604) and any future filings it will make
with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus:
Newcourt's Annual Report on Form 40-F for the year ended December 31,
1997;
Newcourt's audited consolidated financial statements and the auditors'
report thereon for the fiscal years ended December 31, 1998 and 1997 on
Form 6-K dated February 26, 1999; and
Newcourt's Management Information Circular of Newcourt dated February 26,
1999, except the sections entitled 'Governance and Compensation
Committee,' 'Report on Executive Compensation,' 'Corporate Governance' and
the 'Share Performance Graph' on Form 6-K;
Newcourt's Form 6-K filed March 8, 1999; and
Newcourt's Form 6-K filed March 18, 1999.
Information in this prospectus supersedes information incorporated by
reference that the company or Newcourt filed with the Commission before the date
of this prospectus. Information the company or Newcourt files later with the
Commission will automatically update and, in some cases, supersede this
information.
Copies of the above documents of the company or Newcourt may be obtained
upon request without charge from Newcourt Credit Group Inc., BCE Place, 181 Bay
Street, Suite 3500, P.O. Box 827, Toronto, Ontario, Canada M5J 2T3 (Telephone
Number 416-777-6066), Attention: Communications Department.
FINANCIAL INFORMATION
Dollar amounts included in this prospectus or incorporated by reference
into this prospectus are in either United States dollars ('U.S.$' or '$') or
Canadian dollars ('C$').
The consolidated financial statements of Newcourt included in this
prospectus and in Newcourt's reports filed pursuant to the Exchange Act are
prepared in accordance with accounting principles generally accepted in Canada
('Canadian GAAP'). Differences between Canadian GAAP and accounting principles
generally accepted in the United States ('U.S. GAAP') as they affect the
financial statements of Newcourt are explained in a note to the audited
consolidated financial statements of Newcourt incorporated by reference into
this prospectus. Beginning with the quarter ending March 31, 1999, Newcourt will
begin reporting its financial results in U.S. dollars.
RECENT DEVELOPMENTS
On March 8, 1999, Newcourt announced that it had entered into an Agreement
and Plan of Reorganization with The CIT Group, Inc. pursuant to which
outstanding shares of capital stock of Newcourt will be converted into common
stock of The CIT Group or into a new class of Newcourt stock exchangeable into
common stock of The CIT Group, and Newcourt will become a wholly-owned
subsidiary of The CIT Group. Consummation of the transaction is subject to a
number of conditions set forth in the Agreement and Plan of Reorganization,
which is on file with the Securities and Exchange Commission and which is
incorporated by reference herein. The preceding description of the Agreement and
Plan of Reorganization is qualified in its entirety by reference to the full and
complete text of the agreement. No assurance can be given as to whether the
transaction contemplated by the Agreement and Plan of Reorganization will be
consummated.
3
<PAGE>
<PAGE>
RISK FACTORS
You should give careful consideration to the following risk factors, in
addition to the other information included or incorporated by reference in this
prospectus. To the extent any of the information in this prospectus constitutes
a 'forward-looking statement' for purposes of Section 21E of the Exchange Act or
Section 27A of the Securities Act, the risk factors set forth below are
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those anticipated in forward-looking
statements and no assurance can be given that actual results will not differ
materially.
THE COMPANY AND NEWCOURT REQUIRE SUBSTANTIAL CASH TO FUND OPERATIONS AND SERVICE
DEBT
Each of Newcourt's and the company's business requires substantial amounts
of cash to support growth and operations. Their ability to obtain funds and the
cost of such funds could be affected by their credit ratings and restrictions
contained in existing or future debt instruments and by other events beyond
their control, such as interest rates, general economic conditions and the
perception of their business, results of operations, leverage, financial
condition and business prospects. While Newcourt and the company continue to
obtain new sources of funding, there can be no assurance that the total required
financing will be available.
THE COMPANY AND NEWCOURT DEPEND ON SECURITIZATION PROGRAMS TO PROVIDE FINANCING
Newcourt and the company each sell financial assets ('securitizations') and
retain an interest in such finance assets. These transactions allow each of
Newcourt and the company to manage its leverage ratio and to transfer credit
risk. Any delay or decrease in the sale of finance assets and/or an increase in
the actual defaults from that expected may cause Newcourt's and the company's
leverage and net income to be adversely affected.
THE COMPANY AND NEWCOURT HAVE GUARANTEED EACH OTHERS' SECURITIES
NEWCOURT GUARANTEE. Newcourt has fully and unconditionally guaranteed (the
'Newcourt Guarantee') the payment, whether at stated maturity or otherwise, of
present and future principal, interest or premium payable with respect to any
indebtedness for borrowed money incurred by AT&T Capital and any present and
future indebtedness for borrowed money of any person to another person assumed
or guaranteed by AT&T Capital, including the Debt Securities offered by this
prospectus (collectively, the 'AT&T Capital Debt'), except for (1) any
indebtedness for borrowed money whose terms provide that such indebtedness is
not entitled to the benefit of the Newcourt Guarantee; and (2) any indebtedness
for borrowed money secured by liens on, or payable solely from the income and
proceeds of, any property of AT&T Capital or any of its subsidiaries and which
indebtedness is not a general obligation of AT&T Capital. Newcourt's liability
under the Newcourt Guarantee is unlimited in amount and absolute and
unconditional irrespective of any conditions or circumstances that might
otherwise constitute a defense available to Newcourt, including any defense
based on the lack of validity or the unenforceability of the AT&T Capital Debt
or any defense or counterclaim available to AT&T Capital. Because Newcourt
expects to guarantee future AT&T Capital Debt, as well as amendments,
supplements, restatements or replacements of existing AT&T Capital Debt, the
aggregate outstanding principal amount of AT&T Capital Debt to be guaranteed by
Newcourt is expected to increase in the future. The aggregate principal amount
of AT&T Capital Debt was U.S.$9.3 billion (C$14.4 billion) as of December 31,
1998.
AT&T CAPITAL GUARANTEE. In connection with Newcourt's acquisition of the
company, the company guaranteed the payment of certain indebtedness and
liquidity facilities issued, guaranteed or entered into by
Newcourt -- collectively, the 'Newcourt Debt Securities' -- for the benefit of
the holders of the Newcourt Debt Securities.
The amount of Newcourt Debt Securities covered by the company's guarantee
was U.S.$1.3 billion (C$2.0 billion) at December 31, 1998. In addition, on
February 16, 1999, the company guaranteed an additional U.S.$1.0 billion of
Newcourt's debt securities. Because the company's
4
<PAGE>
<PAGE>
guarantee covers future indebtedness of Newcourt in addition to the current
Newcourt Debt Securities, the aggregate outstanding principal amount of the
Newcourt Debt Securities to be covered by the company's guarantee is expected to
increase in the future.
The liability of the company under the company's guarantee is unlimited in
amount and absolute and unconditional irrespective of any conditions or
circumstances that might otherwise constitute a defense available to the company
or Newcourt, including any defense based on the lack of validity or the
unenforceability of the Newcourt Debt Securities or any defense or counterclaim
available to Newcourt.
CHANGES IN RELATIONSHIPS WITH MAJOR VENDORS COULD ADVERSELY AFFECT RESULTS OF
OPERATIONS
A significant portion of the company's and/or Newcourt's consolidated net
income is attributable to the financing provided by major vendor relationships,
including those with Lucent Technologies, Inc., Dell Corporation, Snap-on
Incorporated, Western Star Trucks Inc. and Yamaha Corporation, with respect to
products manufactured or distributed by them and, to a lesser extent, to Lucent
as an end-user, primarily with respect to the lease of information technology
and other equipment or vehicles.
The company's and Newcourt's commercial relationships with these and other
major vendors are governed by certain agreements. Although the company and
Newcourt intend to seek to maintain and improve their existing relationships
with these and other major vendors, no assurance can be given that any agreement
with these and other major vendors will be extended beyond their respective
termination dates or, if extended, that the terms and conditions thereof will
not be modified in a manner adverse to the company and Newcourt. Failure to
renew any of these agreements or changes in the terms of any such agreements
could have a material adverse effect on the company and Newcourt. In addition,
these agreements may contain provisions which allow these vendors to terminate
the respective agreement. For example, the agreement with Lucent contains
provisions which allow Lucent to terminate the agreement under certain
circumstances. If any such agreement is terminated, the results of operations of
the company and Newcourt could be materially adversely affected.
ALLOWANCE FOR CREDIT LOSSES MAY NOT BE ADEQUATE; ESTIMATED RESIDUAL VALUES MAY
NOT BE REALIZED
In connection with origination of finance receivables, capital leases and
operating leases, Newcourt and the company are subject to the risk that the
allowance for credit losses may not prove adequate to cover ultimate losses. If
the allowance is not adequate to cover credit losses actually incurred,
Newcourt's and the company's results of operations and financial condition may
be materially adversely affected. In addition, the estimated residual values may
not be realized at the end of the lease terms and realization of these residual
values has historically been a significant element of the net income of the
company. If the company and/or Newcourt fail to realize the estimated residual
values, their results of operations and financial condition may be materially
adversely affected.
SENSITIVITY TO CHANGES IN DEBT RATINGS
AT&T Capital's long-term debt is rated 'A - ,' 'BBB+,' 'Baa3' and 'BBB' by
Duff & Phelps Credit Rating Co., Fitch IBCA, Inc., Moody's Investors Services
Inc. and Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, respectively. No assurance can be given that any or all of such
rating organizations will not at any future time or from time to time establish
different ratings on the company's senior unsecured short-term or long-term
debt. To the extent that any of such rating organizations assigns a lower rating
than the existing ratings, such downgrading would result in relatively higher
borrowing costs for the company, reduce its access to its traditional funding
sources and reduce its competitiveness, particularly if any such assigned rating
is in a generic rating category that signifies that the relevant debt of the
company is less than investment grade. In addition, if the company's debt
ratings are downgraded to ratings below
5
<PAGE>
<PAGE>
investment grade, such downgrading could result in the termination of the
company's agreements with certain major vendors. Any such downgrading could have
a negative impact on the value of the Securities offered by this prospectus and
a material adverse effect on the company. This risk is also applicable to
Newcourt.
THE COMPANY AND NEWCOURT OPERATE IN A HIGHLY COMPETITIVE INDUSTRY
The equipment leasing and finance industry in which Newcourt and the
company operate is highly competitive and is undergoing a process of
consolidation. As a result, certain competitors' relative cost bases have been
reduced. Participants in the industry compete through price (including the
ability to control costs), risk management, innovation and customer services.
Principal cost factors include the cost of funds, the cost of selling to or
obtaining new end-user customers and vendors and the cost of managing
portfolios. Competitors include captive or related leasing companies (such as
General Electric Capital Corporation and IBM Credit Corporation), independent
leasing companies (such as Comdisco, Inc.), certain banks engaged in leasing,
lease brokers and investment banking firms that arrange for the financing of
leased equipment, and manufacturers and vendors which lease their own products
to customers. In addition, Newcourt and the company compete with all banking and
other financial institutions, manufacturers, vendors and others who extend or
arrange credit for the acquisition of equipment and in a sense, with end-users'
available cash resources to purchase equipment that either the company or
Newcourt may otherwise finance. Many of the competitors are large companies that
have substantial capital, technological and marketing resources; some of these
competitors are significantly larger than either Newcourt or the company and
have access to debt at a lower cost. In addition, Newcourt may not have, in the
immediate future, access to sufficient U.S. federal tax capacity to pursue
efficiently U.S. tax based lease financing.
PENDING COMBINATION WITH THE CIT GROUP, INC.
Newcourt has entered into an agreement providing for a business combination
with The CIT Group. See 'Recent Developments.' Preparing for the consummation of
this combination and, if consummated, integration of Newcourt and The CIT Group
will require a substantial amount of management's time. Diversion of management
attention from Newcourt's existing business as well as problems that may arise
in connection with the integration of Newcourt's and The CIT Group's operations
may have a material adverse impact on Newcourt's revenues and results of
operations. The integration of Newcourt and The CIT Group may result in
additional expenses which could negatively impact Newcourt's results of
operations. Further, the uncertainty created by the combination may result in
the loss of management and other employees. The unavailability of such persons
and the resulting disruption in Newcourt's operations could have a material
adverse effect on Newcourt.
CONTINUITY OF MANAGEMENT
Newcourt's success depends to a significant extent upon the continued
services of its management. There is no assurance that any of Newcourt's
existing officers and key employees will remain in their current positions for
any period of time following the date hereof. The unavailability of the
continued services of such persons could have a material adverse effect on
Newcourt's business.
READINESS FOR YEAR 2000
Newcourt is addressing the Year 2000 issue from a global perspective. In
early 1998, Newcourt established a global Year 2000 Program Office to provide
oversight from both a business and technical perspective. The program will
coordinate vendors, consultants and regional Year 2000 resources. Newcourt has
converted its critical systems at year end 1998 and plans to complete the
conversion of remaining systems and compliance testing and certification in
1999. Newcourt plans to consolidate its operations onto a limited set of
identified Year 2000 compliant systems in order to achieve operational
efficiencies and to minimize the Year 2000 exposures and costs. Newcourt does
not anticipate that the total cost of these Year 2000 compliance activities will
be material to
6
<PAGE>
<PAGE>
its financial position or results of operations in any given year. Newcourt
estimates that the total costs of making its systems Year 2000 compliant will
not exceed $16.1 million of which $9.7 million has been incurred prior to 1999.
However, the inability of Newcourt or significant vendor interfaces of Newcourt
to adequately address the Year 2000 issue could result in a disruption of the
company's and Newcourt's business operations and have a material adverse impact
on the company's and Newcourt's financial position or results of operations.
Newcourt is developing contingency plans to address any disruption that may
result from Year 2000 issues.
ENFORCEABILITY OF LIABILITIES AND SERVICE OF PROCESS
Newcourt is incorporated and has its principal executive office in Canada.
Some of its directors and officers reside outside the United States and a
material portion of their assets are located outside the United States. As a
result, it may be difficult for investors to effect service of process within
the United States upon Newcourt or such persons with respect to matters arising
under the Securities Act, or to enforce against them judgments of courts of the
United States whether or not predicated upon the civil liability provisions of
the federal securities or other laws of the United States or any state thereof.
Newcourt will irrevocably submit to the jurisdiction of any court sitting in the
State of New York with respect to any action or proceeding by a holder of
Securities offered by this prospectus.
AT&T CAPITAL
AT&T Capital, an indirect wholly-owned subsidiary of Newcourt, is a
full-service, diversified equipment leasing and finance company that operates
principally in the United States. AT&T Capital, through its various
subsidiaries, leases and finances a wide variety of equipment, including
telecommunications equipment (such as private branch exchanges, telephone
systems and voice processing units), information technology equipment (such as
personal computers, retail point of sale systems and automated teller machines),
general office, manufacturing and medical equipment and transportation
equipment. In addition, AT&T Capital provides franchise financing for
franchisees and financing collateralized by real estate.
AT&T Capital's principal executive offices are located at: 2 Gatehall
Drive, Parsippany, New Jersey 07054 and its telephone number is (973) 606-3500.
On November 17, 1997, Newcourt agreed to acquire all of the issued and
outstanding common shares of the company. On January 12, 1998, Newcourt
completed the acquisition of the shares of the company and the company became an
indirect wholly-owned subsidiary of Newcourt. Newcourt paid an aggregate
purchase price of approximately $1.7 billion (C$2.4 billion). Of this amount,
approximately $1.15 billion (C$1.6 billion) was paid in cash and the remaining
approximately $0.6 billion (C$0.8 billion) was satisfied by the issuance of
approximately 17.6 million common shares of
Newcourt to an entity indirectly owned by Nomura International plc and which
owned 97.4% of the outstanding shares of the company. This entity has agreed,
subject to certain exceptions, not to sell, transfer or otherwise dispose of one
third of such initial 17.6 million Newcourt common shares until eighteen months
following the acquisition closing.
The combination of Newcourt and AT&T Capital created one of the largest
providers of vendor finance in the world, and one of the world's largest
non-bank commercial asset finance companies.
NEWCOURT
Newcourt was formed in 1984 as an investment bank which originated and
structured asset based financings for the corporate and institutional asset
finance market and syndicated such financings to Canadian financial
institutions. In 1988, Newcourt broadened its activities to include vendor and
direct equipment financing. Today, Newcourt is one of the world's largest
providers of vendor finance and one of the world's largest non-bank commercial
asset finance companies, having approximately C$36.2 billion (U.S.$23.3 billion)
of owned and managed assets and C$4.7 billion (U.S.$3.0 billion) shareholders'
equity at December 31, 1998.
7
<PAGE>
<PAGE>
Newcourt's international origination and servicing capabilities span 26
countries around the globe. Newcourt serves clients in Canada, the United
States, the United Kingdom, the Asia/Pacific region, Europe, Mexico and South
America.
Newcourt's principal executive offices are located at: BCE Place, 181 Bay
Street, Suite 3500, P.O. Box 827, Toronto, Ontario M5J 2T3, telephone number
(416) 594-2400.
ACQUISITIONS
During the fiscal year ended December 31, 1997, in addition to the growth
and expansion of its existing business and the continued diversification of its
loan origination, Newcourt completed several major acquisitions in the
commercial finance segment of the asset-based finance market. In August, 1997,
Newcourt acquired all of the issued and outstanding shares of Commcorp Financial
Services Inc., a Canadian asset finance and associated management service
company. In September 1997, Newcourt acquired the Business Technology Finance
division of Lloyds Bowmaker Limited, an asset finance company based in the
United Kingdom. Also in September 1997, Newcourt acquired the micro-balance
origination and financing division of Lease Finance Group of Chicago, Illinois.
In October 1997, Newcourt acquired the small-balance loan processing
capabilities of Omni Financial Services of America, Inc. In January 1998,
Newcourt consummated the acquisition of AT&T Capital.
BUSINESS
Newcourt possesses asset management and processing skills, systems
capabilities, a broad range of clients, a solid credit underwriting performance
and a consistent operating history. Newcourt originates asset finance business
through innovative financing techniques and provides focused client services and
complementary product offerings.
Newcourt has organized its activities and operations around three core
businesses: (1) Newcourt Capital; (2) Newcourt Financial; and (3) Newcourt
Services. In addition, Newcourt has established an Integration Office which is
responsible for integrating Newcourt, AT&T Capital and the other businesses
acquired by Newcourt in 1997. Newcourt Financial, the commercial finance
business, provides asset-based financing for a variety of equipment to vendors
and customers. Newcourt Capital, the corporate finance business, provides
structured corporate finance to a growing list of international clients,
including major corporations, governments and agencies. Finally, Newcourt
Services, the control, growth and support services, is responsible for the
underwriting, funding, administration and risk management needs of Newcourt
Financial and Newcourt Capital.
Newcourt Financial offers its asset-based sales and inventory financing
services through select strategic relationships with equipment manufacturers,
dealers and distributors and certain professional associations and
organizations. Newcourt Financial's strategy focuses on the creation,
maintenance and enhancement of vendor programs ensuring its position as a
premier provider of global asset based financial products. Newcourt Financial
focuses on the following sectors:
Transportation and Industrial Finance -- provides inventory and term
financing in North America in the transportation, construction, industrial
and fleet vehicle leasing marketplaces;
Technology Finance -- provides direct and vendor financing in North
America to manufacturers, distributors and resellers of information
technology hardware and software and to their customers;
Telecommunications Finance -- provides vendor financing in North America
to the telecommunication industry under an exclusive international vendor
program with Lucent Technologies, Inc.;
Business Finance -- provides asset-based sales and inventory financing to
vendors and customers in the commercial, industrial, health care and
retail finance markets in North America;
Specialty Finance -- provides a variety of financial products to the small
business and health care markets in North America through micro-balance
leasing, government supported (SBA and SBLA) programs and intermediary
financial services; and
8
<PAGE>
<PAGE>
International/Joint Ventures and Operations -- provides specialized
support in Europe, Asia/Pacific and Latin America for Newcourt's
established vendor programs and develops and manages dedicated joint
venture structures.
Newcourt Capital is the corporate finance business which provides asset
based financing for high value assets and related advisory services to equipment
manufacturers, corporate clients, governments and public sector agencies.
Newcourt Capital focuses on the following sectors:
Aerospace Finance -- provides financial services in Canada, the United
States and Europe to both the commercial aviation market, with an emphasis
on the regional airline industry, and the general aviation market, with an
emphasis on the corporate aircraft and helicopter market segments;
Rail Finance -- provides financing and advisory services to railroads and
industrial rail shippers in Canada and the United States;
Public Sector Finance -- provides financing and advisory services in
Canada, the United Kingdom and internationally to governments, public
sector agencies and corporate clients in the infrastructure and
institutional health care sectors;
Project Finance -- provides limited or non-recourse project specific
financing for institutional and corporate clients in North America and the
United Kingdom;
Structured Finance -- provides structured financing services in Canada,
the United States and Europe, including cross-border leases, single
investor leases, synthetic leases and off-balance sheet financings;
Media and Communications Finance -- provides debt financing services to
the communications market and various media sectors in North America;
Principal Finance -- provides financing in North America for acquisitions,
buy-outs and recapitalizations which are done in conjunction with existing
management teams and/or established financial buyers of companies.
Newcourt Services is the service business responsible for providing cost
effective control and support services to Newcourt Financial and Newcourt
Capital. Newcourt Services consists of the following corporate functions:
Treasury, Credit and Risk Management, Financial Reporting and Administration,
Human Resources, Communications & Marketing, Tax Planning and Compliance,
Systems Development, and Quality Assurance.
USE OF PROCEEDS
The proceeds from the sale of the Securities will be used primarily to
finance installment sale and lease agreements with respect to direct financing
programs and to repay debts of the company, its subsidiaries and its affiliated
entities as they become due and for other general corporate purposes. Ongoing
purchases of finance receivables and installment sale and lease agreements,
direct financing programs and any future financing arrangements will be financed
from various sources, including the issuance of commercial paper and the sale of
Securities. The amount and timing of the sales of the Securities will depend on
the timing of asset purchases, market conditions and the availability of other
funds to the company.
The debt to be repaid with the proceeds from such sales consists generally
of medium-term notes and commercial paper. Such debt has various maturities and
bears interest at various fixed rates. At December 31, 1998, the aggregate
principal amount of the company's outstanding medium-term notes was
approximately $7.5 billion, and the company had approximately $1.2 billion in
principal amount of commercial paper outstanding at such date. The range of
interest rates relating to such medium-term notes and the weighted average
interest rate of such commercial paper at December 31, 1998 was 5.52% to 8.25%
and approximately 6.39%, respectively. The net proceeds of all the outstanding
medium-term notes and commercial paper issued or incurred by the company within
the last year to be repaid with net proceeds from the sale of Securities have
been used by the company as working capital for general corporate purposes or to
repay previously outstanding commercial paper or medium-term notes.
9
<PAGE>
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for the company for the years ended December 31, 1994 through 1998.
<TABLE>
<CAPTION>
HISTORICAL(1)
YEAR ENDED
DECEMBER 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges............................................ 1.35 1.07 1.60 1.50 1.62
</TABLE>
- ------------
(1) Calculated under U.S. GAAP, earnings before income taxes and cumulative
effect on prior years of accounting change plus fixed charges (the sum of
interest on indebtedness and the portion of rentals representative of the
interest factor) divided by fixed charges. Fixed charges do not include
distributions on company-obligated preferred securities of the company's
subsidiaries. Prior to October 1, 1996, a portion of the company's
indebtedness to AT&T Corp. did not bear interest.
------------------------
The following table sets forth the historical ratios of earnings to fixed
charges for Newcourt for the years ended December 31, 1994 through 1998.
<TABLE>
<CAPTION>
HISTORICAL(1)
YEAR ENDED
DECEMBER 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges............................................ 1.47 1.11 1.60 1.53 1.55
</TABLE>
- ------------
(1) Calculated under Canadian GAAP, earnings before income taxes and cumulative
effect on prior years of accounting change plus fixed charges (the sum of
interest on indebtedness and the portion of rentals representative of the
interest factor) divided by fixed charges.
10
<PAGE>
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities are to be issued under the indenture dated as of March
1, 1999, among the company, Newcourt and The Chase Manhattan Bank, as Trustee. A
copy of the indenture is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the indenture, including the definitions therein of
certain terms. Section references are to sections of the indenture, and wherever
particular provisions are referred to, such provisions are incorporated by
reference as part of the statement made, and the statement is qualified in its
entirety by such reference.
The Debt Securities are not guaranteed or supported in any way by AT&T
Corp.
GENERAL
The indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provides that the Debt Securities
may be issued from time to time in one or more series. Reference is made to the
prospectus supplement which accompanies this prospectus for a description of the
Debt Securities being offered thereby, including:
(1) the title of the series of the Debt Securities;
(2) the aggregate principal amount of the Debt Securities;
(3) the percentage of their principal amount at which the Debt
Securities will be sold;
(4) the date(s) on which the Debt Securities will mature, or whether
the Debt Securities are payable on demand;
(5) the rate(s) per annum at which the Debt Securities will bear
interest, if any, or the method of calculating the rate or rates of
interest;
(6) the times at which such interest, if any, will be payable;
(7) the terms for redemption, early repayment or amortization, if any;
(8) the denominations in which the Debt Securities are authorized to
be issued;
(9) the coin or currency in which the Debt Securities are denominated,
which may be a Euro;
(10) any provision permitting payments of the principal of or any
premium or interest on the Debt Securities in a coin or currency other than
the currency in which the Debt Securities are denominated, including a
non-U.S. dollar denominated currency;
(11) the manner in which the amount of payments of principal of and
any premium or interest on the Debt Securities is to be determined if such
determination is to be made with reference to one or more indices (which
will be based on one or more U.S. or foreign stocks, bonds or other
securities, one or more U.S. or foreign interest rates, one or more
currencies or currency units, one or more commodities, or one or more
equipment leases, third-party loans, tax receipts, real property values,
SWAP receivables, reinsurance contracts, pooled receivables, or any
combination of the foregoing);
(12) whether the Debt Securities are issuable in registered form
('registered Debt Securities') or bearer form (with or without interest
coupons) ('bearer Debt Securities') or both, and whether the Debt
Securities will be uncertificated;
(13) whether any series of Debt Securities will be represented by one
or more temporary or permanent global Debt Securities ('global Debt
Securities') and, if so, whether any such global Debt Securities will be in
registered or bearer form, the identity of the depositary for such global
Debt Security or Securities and the method of transferring beneficial
interests in such global Debt Security or Securities;
(14) if a temporary global Debt Security is to be issued with respect
to a series, the terms upon which interests in such temporary global Debt
Security may be exchanged for interests in a permanent global Debt Security
or for definitive Debt Securities of the series and the
11
<PAGE>
<PAGE>
terms upon which interest in a permanent global Debt Security, if any, may
be exchanged for definitive Debt Securities of the series;
(15) information with respect to book-entry procedures, if any;
(16) whether and under what circumstances the company will pay
additional amounts on any Debt Securities held by any person in respect of
taxes or similar charges withheld and, if so, whether the company will have
the option to redeem the Debt Securities rather than pay such additional
amounts; and
(17) any other terms, including any terms which may be required by or
advisable under United States laws and regulations or advisable in
connection with the marketing of the Debt Securities of such series, which
will not be inconsistent with the provisions of the indenture.
Debt Securities of any series may be registered Debt Securities or bearer
Debt Securities or both as specified in the terms of the series. Additionally,
Debt Securities of any series may be represented by one or more global Debt
Securities registered in the name of a depositary's nominee and, if so
represented, beneficial interests in such a global Debt Security will be shown
on, and transfers thereof will be effected only through, records maintained by a
designated depositary and its participants. Debt Securities of any series may
also be uncertificated. Unless otherwise indicated in the prospectus supplement,
no bearer Debt Securities (including Debt Securities in permanent global bearer
form) will be offered, sold, resold or delivered to any United States person (as
defined under 'Limitations on Issuance of Bearer Debt Securities' below) in
connection with their original issuance or their exchange for a portion of a
temporary or permanent global Debt Security.
Unless otherwise indicated in the prospectus supplement, principal and
interest, if any, will be payable at the office of one or more paying agents as
specified in the prospectus supplement; provided that, in the case of registered
Debt Securities, payment of interest may be made at the option of the company by
check mailed to the address of the person entitled thereto as it appears in the
register of the Debt Securities. To the extent set forth in the prospectus
supplement, except in special circumstances set forth in the indenture,
interest, if any, on bearer Debt Securities will be payable only against
presentation and surrender of the coupons for the interest installments
evidenced thereby as they mature at the office of a paying agent of the company
located outside of the United States and its possessions. The company will
maintain one or more such agents for a period of two years after the principal
of such bearer Debt Securities has become due and payable. During any period
thereafter for which it is necessary in order to conform to United States tax
laws or regulations, the company will maintain a paying agent outside of the
United States and its possessions to which the bearer Debt Securities and
coupons related thereto may be presented for payment and will provide the
necessary funds therefor to such paying agent upon reasonable notice. No payment
with respect to any bearer Debt Security will be made at any office or agency of
the company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payment of principal of (and premium, if
any) and interest on bearer Debt Securities denominated and payable in U.S.
dollars will be made at the office of the company's paying agent in the Borough
of Manhattan, New York City if, and only if, payment of the full amount thereof
in U.S. dollars at all offices or agencies outside the United States is illegal
or effectively precluded by exchange controls or other similar restrictions.
In connection with any sale during the 'restricted period' as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations
(generally, the first 40 days after the closing date and, with respect to unsold
allotments, until sold), no bearer Debt Security shall be mailed or otherwise
delivered to any location in the United States (as defined under 'Limitations on
Issuance of Bearer Debt Securities' below). A bearer Debt Security in definitive
form (including interests in a permanent global security) may be delivered only
if the person entitled to receive such bearer Debt Security furnishes written
certification, in the form required by the indenture, to the effect that such
bearer Debt Security is not owned by or on behalf of a United States person (as
defined under 'Limitations on Issuance of Bearer Debt Securities' below), or, if
a beneficial interest in such bearer Debt Security is owned by or on behalf of a
12
<PAGE>
<PAGE>
United States person, that such United States person (1) acquired and holds the
bearer Debt Security through a foreign branch of a United States financial
institution, (2) is a foreign branch of a United States financial institution
purchasing for its own account or resale (and in either case (1) or (2) such
financial institution agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the
'Code'), and the regulations thereunder) or (3) is a financial institution
purchasing for resale during the restricted period only to non-United States
persons outside the United States. See 'Limitations on Issuance of Bearer Debt
Securities' below and 'Global Securities -- Bearer Debt Securities.'
Bearer Debt Securities and the coupons related thereto will be transferable
by delivery. Unless otherwise indicated in the prospectus supplement, registered
Debt Securities will be transferable at the office of one or more registrars as
specified in the prospectus supplement.
The Debt Securities will be unsecured obligations of the company and will
rank pari passu (equal in right of payment) with all other unsecured and
unsubordinated indebtedness of the company. At December 31, 1998, the company's
consolidated indebtedness (all of which is unsecured and unsubordinated) was
approximately $9.3 billion (C$14.4 billion). The Debt Securities will, however,
be effectively subordinate (with respect to the assets of the company's
subsidiaries) to the indebtedness and other liabilities of such subsidiaries. At
December 31, 1998, such indebtedness and other liabilities aggregated
approximately $1.2 billion (C$1.9 billion).
Newcourt's guarantee of the Debt Securities will be an unsecured obligation
of Newcourt and will rank pari passu with all other unsecured and unsubordinated
indebtedness of Newcourt. At December 31, 1998, Newcourt's consolidated
indebtedness was approximately $11.6 billion (C$18.0 billion). The guarantee
will, however, be effectively subordinate (with respect to the assets of
Newcourt's subsidiaries) to the indebtedness and other liabilities of such
subsidiaries other than AT&T Capital. At December 31, 1998, such indebtedness
and other liabilities (including those of AT&T Capital) aggregated approximately
$10.7 billion (C$16.7 billion).
Unless otherwise indicated in the prospectus supplement, the Debt
Securities denominated in U.S. dollars will be issued only in denominations that
are integral multiples of $1,000. No service charge will be made for any
transfer or exchange of the Debt Securities, but the company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Debt Securities may be issued as original issue discount Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. United States federal income tax consequences and other
special considerations applicable to any such original issue discount Debt
Securities will be described in the prospectus supplement relating thereto.
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series, date of
maturity, interest rate and original issue date in authorized denominations as
may be requested upon surrender of the registered Debt Securities to the
registrar or a paying agent of the company as specified in the prospectus
supplement and upon fulfillment of all other requirements of such agent.
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, bearer Debt
Securities may be exchanged for an equal aggregate principal amount of
registered or bearer Debt Securities of the same series, date of maturity,
interest rate and original issue date in such authorized denominations as may be
requested upon delivery of the bearer Debt Securities with all unpaid coupons
relating thereto to the registrar or a paying agent of the company as specified
in the prospectus supplement and upon fulfillment of all other requirements of
such agent. Registered Debt Securities will not be exchangeable for bearer Debt
Securities.
COVENANTS
Set forth below is a description of the principal covenants of the company
and Newcourt contained in the indenture. The indenture does not restrict the
company or Newcourt, other than
13
<PAGE>
<PAGE>
as set forth below, from engaging in any highly leveraged transaction,
reorganization, restructuring, merger or similar transaction, or from incurring
additional indebtedness or causing its subsidiaries to incur additional
indebtedness, any of which transactions could have a material adverse effect on
the holders of the Debt Securities.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE OF ASSETS OF AT&T CAPITAL OR
NEWCOURT. In the indenture, each of the company and Newcourt has agreed that it
will not merge or consolidate with any other person or sell or convey all or
substantially all of its assets to any person (other than a sale or conveyance
to a Subsidiary (as defined below) of the company or the guarantor or any
successor thereto (such a sale or conveyance being called an 'Asset
Drop-Down')), unless:
(1) either the company or the guarantor is the continuing person or
the successor person which acquires by sale or conveyance substantially all
the assets of the company or the guarantor (if other than the company or
the guarantor) expressly assumes the due and punctual payment of the
principal of and interest, if any, on all the Debt Securities, and the due
and punctual performance and observance of all the covenants and conditions
of the indenture and the guarantee to be performed or observed by the
company or the guarantor, by supplemental indenture in form satisfactory to
the Trustee, executed and delivered to the Trustee by such person and, if
applicable, execution and delivery of a guaranty substantially in the form
of the guarantee; and
(2) the company, the guarantor or such successor person, as the case
may be, is not, immediately after such merger or consolidation, or such
sale or conveyance, in default in the performance of any such covenant or
condition.
In the case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor person, such person will succeed
to and be substituted for the company or the guarantor, as applicable, with the
same effect as if it had been named in the indenture or the guarantee, as
applicable, and, in the case of any such sale or conveyance (other than a
conveyance by way of lease), the company or the guarantor, as applicable, will
be released and discharged from all obligations and covenants under the
indenture and the Debt Securities or the guarantee, as applicable.
In the event of any Asset Drop-Down after the date of the indenture, any
subsequent sale or conveyance of assets by the Subsidiary of the company or the
guarantor, as applicable, to which assets were transferred in such Asset
Drop-Down (the 'Drop-Down Subsidiary') will be deemed to be a sale or conveyance
of assets by the company or the guarantor for purposes of the covenant described
above. (Sections 5.01 and 5.02)
The term 'all or substantially all,' which appears in the foregoing
covenant, is not defined in the indenture, and it does not have a precise
established definition under applicable law. The application of the covenant may
depend on the facts and circumstances of a particular transaction, including the
qualitative as well as the quantitative aspects of such transaction.
Accordingly, there may be uncertainty in connection with any particular
transaction as to whether a sale or conveyance of all or substantially all of
the assets of the company or the guarantor has occurred and thus as to whether
the company or the guarantor has complied with this covenant. Because New York
law governs the indenture, New York law will govern the interpretation of such
term.
LIMITATIONS ON LIENS. The indenture provides that the guarantor will not,
nor will it permit any Restricted Subsidiary (as defined below) to, create or
incur, or suffer to be incurred or to exist, any Lien (as defined below) on its
or their property or assets, whether owned as of the date of the indenture or
acquired afterward, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
without concurrently securing the due and punctual payment of the principal of,
premium, if any, and the interest on all Debt Securities outstanding under the
indenture equally and ratably with any and all other obligations and
indebtedness secured by such Lien, so long as any such other obligations and
indebtedness shall be so secured, and the guarantor covenants that
14
<PAGE>
<PAGE>
if and when any such Lien is created, the Debt Securities outstanding under the
indenture will be so secured thereby.
The above provision does not, however, limit the right of the guarantor or
any Restricted Subsidiary to create or incur, or suffer to be incurred or to
exist, any one or more of the following Liens:
(1) Liens for property taxes and assessments or governmental charges
or levies which are not yet due and payable, or the amount, applicability
or validity thereof is being contested by the guarantor or any Restricted
Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the guarantor or such Restricted Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the guarantor or
such Restricted Subsidiary, or the nonpayment of all such taxes,
assessments, charges and levies in the aggregate would not reasonably be
expected to have a materially adverse effect on the business, operations,
affairs, financial condition, properties or assets of the guarantor and its
Restricted Subsidiaries taken as a whole and Liens securing claims or
demands of mechanics and materialmen in each case incurred in the ordinary
course of business for sums not yet due and payable or the non-payment of
which would not reasonably be expected, individually or in the aggregate,
to have a materially adverse effect on the business, operations, affairs,
financial condition, properties or assets of the guarantor and its
Restricted Subsidiaries taken as a whole;
(2) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the guarantor or a Restricted Subsidiary shall at any time
in good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(3) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and solicitors' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money; provided in each case, the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(4) Minor survey exceptions, or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
guarantor and the Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the guarantor and the Restricted Subsidiaries;
(5) Liens securing Debt (as defined below) of a Restricted Subsidiary
to the guarantor or to another Restricted Subsidiary;
(6) Liens created to secure the payment of the purchase price incurred
in connection with the acquisition of real or personal assets (other than
Acquired Financing Assets (as defined below)) useful and intended to be
used in carrying on the business of the guarantor or a Restricted
Subsidiary, including Liens existing on such assets at the time of
acquisition by the guarantor or a Restricted Subsidiary of any business
entity then owning such assets, whether or not such existing Liens were
given to secure the payment of the purchase price of such assets to which
they attach so long as they were not incurred, extended or renewed in
contemplation of such acquisition, provided that (A) the Lien attaches
solely to such assets acquired or purchased, (B) at the time of acquisition
of such assets, the aggregate amount remaining unpaid on all Debt secured
by Liens on such assets whether or not assumed by the guarantor or a
Restricted Subsidiary shall not exceed an amount equal to the lesser of the
15
<PAGE>
<PAGE>
total purchase price or fair market value at the time of acquisition of
such assets, and (C) any such Lien shall be created contemporaneously with,
or within 120 days after, the acquisition of such property.
(7) Liens on Acquired Financing Assets to secure Secured Subordinated
Debt (as defined below) of the guarantor or the Restricted Subsidiaries
arising in connection with the acquisition of such Acquired Financing
Assets;
(8) Liens securing Non-Recourse Debt of the guarantor or the
Restricted Subsidiaries;
(9) Liens created or incurred after December 15, 1998 upon any
property (the 'Substitute Property') concurrently with the release of a
comparable Lien on other property (the 'Released Property'), provided that:
the fair market value of the Substitute Property shall not exceed the
fair market value of the Released Property by more than 110%;
the character and use of the Substitute Property shall be
substantially equivalent to the character and use of the Released
Property; and
such substitution shall be without increase in the principal amount
of the Debt remaining unpaid as of the date of such substitution
which is to be secured by the Lien on such Substitute Property and
such remaining unpaid principal amount of such Debt shall not exceed
the aggregate fair market value of such Substitute Property and any
other property securing such Debt;
(10) Liens on property of, or on any shares of stock, other equity
interests, or debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary;
(11) Liens on property, shares of stock, other equity interests, or
debt existing at the time of acquisition or repossession thereof by the
guarantor or any Restricted Subsidiary;
(12) Liens on physical property (or any Accounts Receivable) arising
in connection with the lease thereof), shares of stock, other equity
interests, or Debt acquired (or, in the case of physical property,
constructed) after December 15, 1998, by the guarantor or any Restricted
Subsidiary, which liens are created prior to, at the time of, or within one
year after such acquisition (or, in the case of physical property, the
completion of such construction or commencement of commercial operation of
such property, whichever is later) to secure any Debt issued, incurred,
assumed or guaranteed prior to, at the time of, or within one year after
such acquisition (or such completion or commencement, whichever is later)
or to secure any other debt issued, incurred, assumed or guaranteed at any
time thereafter for the purpose of refinancing all or any part of such
Debt;
(13) Liens on Accounts Receivable of the guarantor or any Restricted
Subsidiary arising from or in connection with transactions entered into by
the guarantor or such Restricted Subsidiary after December 15, 1998, or on
Accounts Receivable acquired by the guarantor or such Restricted Subsidiary
after such date from others which liens are created prior to, at the time
of, or after such Accounts Receivable arise or are acquired:
as a result of any guarantee, repurchase or other contingent (direct
or indirect) or recourse obligation of the guarantor or such
Restricted Subsidiary in connection with the discounting, sale,
assignment, transfer or other disposition of such Accounts Receivable
or any interest therein; or
to secure or provide for the payment of all or any part of the
investment of the guarantor or such Restricted Subsidiary in any such
Accounts Receivable (whether or not such Accounts Receivable are the
Accounts Receivable on which such liens are created) or the purchase
price thereof or to secure any Debt (including, without limitation,
Non-Recourse Debt) issued, incurred, assumed or guaranteed for the
purpose of financing or refinancing all or any part of such
investment or purchase price;
(14) any extension, renewal, or replacement of any Lien permitted by
subsections (6), (7), (9), (10), (11), (12) and (13) above in respect of
the same property theretofore subject to such
16
<PAGE>
<PAGE>
Lien in connection with the extension, renewal or refinancing of the Debt
secured thereby; provided that:
such Lien shall be attached solely to the same such property or
Substitute Property; and
such extension, renewal or refinancing of such Debt shall be without
increase in the principal remaining unpaid as of the date of such
extension, renewal or refinancing.
(15) Any other Liens (other than the Liens described in clauses
(1)-(14)) which in the aggregate relate to Debt the aggregate amount of
which does not exceed 10% of Consolidated Net Tangible Assets; and
(16) any Lien approved by the Debt Security holders holding a majority
in principal amount of the outstanding Debt Securities of each series.
(Section 4.03)
As used in the indenture:
'Accounts Receivable' mean:
(1) any accounts receivable (whether or not earned by performance),
chattel paper, instruments, documents, general intangibles, trade
acceptances, any other rights to receive installment, rental or other
payments for, or relating to amounts due or to become due on account of
equipment or goods sold or leased or to be sold or leased or services
rendered or to be rendered or funds advanced or loaned or to be advanced
or loaned and other rights to payment of any kind;
(2) any proceeds of any of the foregoing; and
(3) any interest in any property or asset of any kind (whether of
the obligor under such Accounts Receivable or any other person) securing
the payment of any item listed in clause (1) hereof. (Section 1.01)
'Acquired Financing Assets' means assets (including, but not limited
to, securities and receivables) of any person the acquisition of which was
financed in accordance with the guarantor's credit policies and procedures
manual approved from time to time by the board of directors. (Section
1.01).
'Capitalized Lease' means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP. (Section
1.01).
'Capitalized Rentals' of any person means as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
person. (Section 1.01)
'Consolidated Net Tangible Assets' means, at the date of any
determination, the total assets appearing on the consolidated balance sheet
of the guarantor and its Restricted Subsidiaries as at the end of the most
recent fiscal quarter of the guarantor for which such balance sheet is
available, prepared in accordance with generally accepted accounting
principles, less:
(1) all current liabilities (obligations whose liquidation is
reasonably expected to occur within twelve months);
(2) investments in and advances to Subsidiaries other than
Restricted Subsidiaries or other entities accounted for on the equity
method of accounting; and
(3) Intangible Assets (as defined below). (Section 1.01)
'Debt' of any person means all obligations of such person for money
borrowed or which have been incurred in connection with the acquisition of
assets which in accordance with GAAP shall be classified upon a balance
sheet of such person as liabilities of such person, and in any event shall
include, without duplication, all (1) Capitalized Rentals and (2)
guaranties of obligations of others of the character referred to in this
definition. (Section 1.01)
17
<PAGE>
<PAGE>
'GAAP' means generally accepted accounting principles in Canada or the
U.S., as applicable.
'guaranties' by any person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
person (the 'Primary Obligor') in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such person:
(1) to purchase such Indebtedness or obligation or any property or
assets constituting security therefor;
(2) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or
other balance sheet condition or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;
(3) to lease property or to purchase capital stock or other
property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the Primary Obligor to
make payment of the Indebtedness or obligation; or
(4) otherwise to assure the owner of the Indebtedness or obligation
of the primary obligor against loss in respect thereof. For the purposes
of all computations under the indenture, a guaranty in respect of any
Debt shall be deemed, without duplication, to be Indebtedness equal to
the principal amount of such Debt which has been guaranteed, and a
guaranty in respect of any other obligation or liability or any dividend
shall be deemed to be Indebtedness equal to the maximum aggregate amount
of such obligation, liability or dividend. (Section 1.01)
'Indebtedness' of any person means all obligations of such person
which in accordance with GAAP shall be classified upon a balance sheet of
such person as liabilities of such person; and in any event shall include:
(1) all obligations of such person for borrowed money or which has
been incurred in connection with the acquisition of property or assets;
(2) all obligations secured by any Lien upon property or assets
owned by such person, even though such person has not assumed or become
liable for the payment of such obligations;
(3) all obligations created or arising under any conditional sale
or other title retention agreement with respect to property acquired by
such person, notwithstanding the fact that the rights and remedies of
the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of property;
(4) the face amount of all letters of credit issued for the account
of such person and all drafts drawn thereunder;
(5) Capitalized Rentals; and
(6) guaranties of obligations of others of the character referred
to in this definition. (Section 1.01)
'Intangible Assets' means the value (net of any applicable reserves),
as shown on or reflected in the guarantor's balance sheet, of: (1) all
trade names, trademarks, licenses, patents, copyrights and goodwill; (2)
organization and development costs; (3) deferred charges (other than
prepaid items such as insurance, taxes, interest, commissions, rents and
similar items and tangible assets being amortized); and (4) unamortized
debt discount and expense, less unamortized premium. (Section 1.01)
'Lien' means any interest in property securing an obligation owed to,
or a claim by, a person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the security interest lien arising from
18
<PAGE>
<PAGE>
a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term 'Lien' shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances (including, with respect to shares, shareholder agreements,
voting trust agreements, buy-back agreements and all similar arrangements)
affecting property. For purposes of the indenture, the guarantor or any
Restricted Subsidiary shall be deemed to be the owner of any property which
it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other person for security
purposes and such retention or vesting shall constitute a Lien. (Section
1.01)
'Non-Recourse Debt' of the guarantor or any Restricted Subsidiary
means any Debt of the guarantor or such Restricted Subsidiary, as the case
may be, which is secured by any Lien on, or payable solely from the income
and proceeds of, any property (including, without limiting the generality
of such term, any Intangible Assets), shares of stock, other equity
interests or debt of the guarantor or such Restricted Subsidiary, as the
case may be, and which is not a general obligation of the guarantor or such
Restricted Subsidiary, as the case may be. (Section 1.01)
'Rentals' means as of the date of any determination thereof all fixed
payments (including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the
property) payable by the guarantor or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the guarantor or a
Restricted Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called 'percentages leases' shall be
computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues. (Section
1.01)
'Restricted Subsidiary' means the company and each Subsidiary (as
defined below) of the guarantor organized under the laws of any State of
the United States or the District of Columbia or Canada, no substantial
portion of the business of which is carried on outside of the United States
or Canada; provided that each Drop-Down Subsidiary shall be a Restricted
Subsidiary. (Section 1.01).
'Secured Subordinated Debt' means Subordinated Debt of any person
which is secured by a Lien. (Section 1.01)
'Subordinated Debt' means any Debt of any person which is subordinated
in right of payment to the Debt (other than Unsecured Subordinated Debt) of
such person, provided, however, that so long as no default has occurred and
is continuing under any such Debt of such person, such person may make
payments in connection with such Subordinated Debt as such payments become
due. (Section 1.01)
'Subsidiary' means any corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by any person
and/or by one or more other Subsidiaries (including the company). 'Voting
stock' means stock ordinarily having voting power for the election of
directors, whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency. (Section 1.01)
'Unsecured Subordinated Debt' means all Subordinated Debt of any
person other than Secured Subordinated Debt.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The indenture provides that, if an Event of Default specified therein in
respect of any series of Debt Securities shall have occurred and be continuing,
either the Trustee or the holders of not less than 25% in aggregate principal
amount of the outstanding Debt Securities of such series may declare the
principal of all the securities of such series to be due and payable. (Section
6.01)
19
<PAGE>
<PAGE>
Events of Default in respect of the Debt Securities of any series are
defined in the indenture as being: default for 90 days in payment of any
interest installment when due; unless otherwise specified in the prospectus
supplement with respect to the Debt Securities of any series, default in payment
of principal of or premium, if any, on Debt Securities of such series when due;
default for 90 days after written notice to the company by the Trustee or by the
holders of not less than 25% in aggregate principal amount of the outstanding
Debt Securities of such series in the performance of any other agreement in the
Debt Securities or indenture in respect of such series; and certain events of
bankruptcy, insolvency and reorganization of the company or the guarantor.
(Section 6.01)
The indenture provides that the company will, within 120 days after the
close of each fiscal year, commencing with the first fiscal year following the
issuance of any series of Debt Securities, file with the Trustee a certificate
stating whether or not the company has complied with all conditions and
covenants on its part contained in the indenture and, if not, specifying each
default (without regard to any grace period or requirement of notice under the
indenture) and the nature thereof. (Section 4.04)
The indenture provides that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, if such
default is known to the Trustee, give to the holders of such series notice of
all defaults known to it; provided that, except in the case of default in
payment on any of the Debt Securities of such series, the Trustee will be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the holders of such series. The
term 'default' for the purpose of this provision means any event which is, or
after notice or passage of time or both would be, an Event of Default. (Section
7.05)
The indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default in respect of any series of Debt
Securities to act with the required standard of care, to refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory to
it. (Section 7.01)
The indenture provides that the holders of a majority in aggregate
principal amount of the outstanding securities of any series affected (with each
series voting as a separate class) may direct the time, method and place of
conducting proceedings for remedies available to the Trustee, or exercising any
trust or power conferred on the Trustee, in respect of such series. (Section
6.06)
In certain cases, the holders of a majority in principal amount of the
outstanding Debt Securities of a series may on behalf of the holders of all Debt
Securities of such series waive any past default or Event of Default, or
compliance with certain provisions of the indenture, except, among other things,
a default in payment of the principal of, premium, if any, or interest on, any
of the Debt Securities of such series. (Sections 6.01 and 6.06)
DISCHARGE AND DEFEASANCE
Under terms satisfactory to the Trustee, the company may discharge certain
obligations to holders of any series of Debt Securities issued under the
indenture which have not already been delivered to the Trustee for cancellation
and which have either become due and payable or are by their terms due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee as trust funds an amount in cash
sufficient to pay at maturity (or upon redemption) the principal of and interest
on such Debt Securities. (Section 8.01)
In the case of any series of Debt Securities with respect to which the
exact amounts (including the currency of payment) of principal of and interest
due on such series can be determined at the time of making the deposit referred
to below (which include Debt Securities with a floating or variable rate of
interest that cannot exceed a specified or determinable maximum rate), the
company at its option may also (1) discharge any and all of its obligations to
holders of such series of Debt Securities ('defeasance') on the 91st day after
the conditions set forth below have been satisfied, but may not thereby avoid
its duty to register the transfer or exchange of such series of Debt Securities,
to replace any temporary, mutilated, destroyed, lost or
20
<PAGE>
<PAGE>
stolen Debt Securities of such series or to maintain an office or agency in
respect of such series of Debt Securities, or (2) be released with respect to
such series of Debt Securities from the obligations imposed by the covenants
described under 'Covenants' above ('covenant defeasance'). Defeasance and
covenant defeasance may be effected only if, among other things, (1) the company
irrevocably deposits with the Trustee as trust funds (a) money in an amount,
(b) in the case of Debt Securities payable only in U.S. Dollars, U.S.
Governmental Obligations (as defined in the indenture) which through the payment
of interest and principal in respect thereof will provide money in an amount, or
(c) a combination of (a) and (b), certified by a nationally recognized firm of
independent public accountants to be sufficient to pay each installment of
principal of and interest on all outstanding Debt Securities of such series on
the dates such installments of principal and interest are due; and (2) the
company delivers to the Trustee an opinion of independent counsel to the effect
that the holders of such series of Debt Securities will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United States federal
income tax on the same amount and in the same manner and at the same time as
would have been the case if such defeasance or covenant defeasance had not
occurred (which opinion may include or be based on a ruling to that effect
received from or published by the Internal Revenue Service). (Section 8.02)
MODIFICATION OF THE INDENTURE
The indenture contains provisions permitting the company, the guarantor and
the Trustee, with the consent of the holders of a majority in principal amount
of the outstanding Debt Securities of each series affected thereby (with such
series voting as a separate class), to execute supplemental indentures adding
any provisions to or changing or eliminating any of the provisions of the
indenture or modifying the rights of the holders of Debt Securities of each such
series, except that no such supplemental indenture may, without the consent of
each holder affected, among other things, change the maturity of any Debt
Securities, or change the principal amount thereof or change the rate or change
the time of payment of interest thereon, make any Debt Security payable in money
other than that stated in the Debt Security, or reduce the aforesaid percentage
of outstanding Debt Securities required to approve any such supplemental
indenture. (Section 9.02)
CONCERNING THE TRUSTEE
The company may from time to time maintain lines of credit, and have other
customary banking relationships, with The Chase Manhattan Bank, the Trustee
under the indenture. In addition, The Chase Manhattan Bank is the trustee under
the indentures dated as of April 9, 1990, and as of June 1, 1992, each as
amended, among the company, AT&T Corp., AT&T Capital Holdings, Inc., a
wholly-owned subsidiary of AT&T Corp., and The Chase Manhattan Bank, pursuant to
which the company assumed and AT&T Corp. guaranteed certain medium and long-term
debt issued by AT&T Capital Holdings, Inc. As of December 31, 1998, the
aggregate outstanding principal amount of such medium and long-term debt was
approximately U.S.$0.1 billion. Furthermore, The Chase Manhattan Bank is the
trustee under the indenture dated as of July 1, 1993, between the company and
The Chase Manhattan Bank pursuant to which the company has issued U.S.$11.4
billion aggregate principal amount of medium-term notes, the trustee under the
indenture dated as of April 1, 1998, among the company, Newcourt and The Chase
Manhattan Bank pursuant to which the company has issued U.S.$5.0 billion
aggregate principal amount of medium-term notes, the trustee under the indenture
dated as of December 15, 1998, between Newcourt and The Chase Manhattan Bank
pursuant to which Newcourt has issued U.S.$0.3 billion aggregate principal
amount of notes and the trustee under the indenture dated as of February 15,
1999, among the company, Newcourt and The Chase Manhattan Bank pursuant to which
Newcourt has issued U.S.$1.0 billion aggregate principal amount of notes.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, bearer
Debt Securities may not be offered or sold during the restricted period (as
defined under 'General' above), or delivered in definitive form in connection
with a sale during the restricted period, in the United
21
<PAGE>
<PAGE>
States or to United States persons other than to (a) the United States office of
(1) an international organization (as defined in Section 7701(a)(18) of the Code
and the regulations thereunder), (2) a foreign central bank (as defined in
Section 895 of the Code and the regulations thereunder), or (3) any underwriter,
agent, or dealer offering or selling bearer Debt Securities during the
restricted period (a 'Distributor') pursuant to a written contract with the
issuer or with another Distributor, that purchases bearer Debt Securities for
resale or for its own account and agrees to comply with the requirements of
Section 165(j)(3)(A), (B), or (C) of the Code, or (b) the foreign branch of a
United States financial institution purchasing for its own account or for
resale, which institution agrees to comply with the requirements of Section 165
(j)(3)(A), (B), or (C) of the Code. In addition, a sale of a bearer Debt
Security may be made during the restricted period to a United States person who
acquired and holds the bearer Debt Security on the Certification Date through a
foreign branch of a United States financial institution that agrees to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Code. Any
Distributor (including an affiliate of a Distributor) offering or selling bearer
Debt Securities during the restricted period must agree not to offer or sell
bearer Debt Securities in the United States or to United States persons (except
as discussed above) and must employ procedures reasonably designed to ensure
that its employees or agents directly engaged in selling bearer Debt Securities
are aware of these restrictions.
Bearer Debt Securities and their interest coupons will bear the following
legend: 'Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code.'
Purchasers of bearer Debt Securities may be affected by certain limitations
under United States tax laws. See the applicable prospectus supplement for a
summary of material U.S. federal income tax consequences to United States
persons investing in bearer Debt Securities.
As used herein, 'United States person' means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States, an estate the income of which is
subject to United States federal income taxation regardless of its source and a
trust if (i) a court within the United States is able to exercise primary
supervision over the administration of the trust and (ii) one or more United
States persons have the authority to control all substantial decisions of the
Trust, and 'United States' means the United States of America (including the
States and the District of Columbia) and its possessions including Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands.
22
<PAGE>
<PAGE>
DESCRIPTION OF THE WARRANTS
The Debt Warrants, Currency Warrants, Index Warrants and Interest Rate
Warrants are to be issued under separate warrant agreements (each a 'Warrant
Agreement' and respectively a 'Debt Warrant Agreement,' a 'Currency Warrant
Agreement,' an 'Index Warrant Agreement' and an 'Interest Rate Warrant
Agreement') to be entered into between the company and one or more banks or
trust companies, as warrant agent (each a 'Warrant Agent' and respectively a
'Debt Warrant Agent,' a 'Currency Warrant Agent,' an 'Index Warrant Agent' and
an 'Interest Rate Warrant Agent'), all as shall be set forth in the prospectus
supplement relating to the Warrants being offered thereby. A form of each type
of Warrant Agreement, including a form of warrant certificate representing each
type of Warrant (each a 'Warrant Certificate' and respectively a 'Debt Warrant
Certificate,' a 'Currency Warrant Certificate,' an 'Index Warrant Certificate'
and an 'Interest Rate Warrant Certificate'), reflecting the alternative
provisions that may be included in the Warrant Agreements to be entered into
with respect to particular offerings of Warrants, are herein incorporated by
reference to exhibits to the Registration Statement of which this prospectus is
a part. The descriptions contained herein of the Warrant Agreements and the
Warrant Certificates and summaries of certain provisions of the Warrant
Agreements and the Warrant Certificates do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the applicable Warrant Agreements and the Warrant Certificates,
including the definitions therein of certain terms not otherwise defined in this
prospectus. Wherever particular sections of, or terms defined in, the Warrant
Agreements are referred to, such sections or defined terms are incorporated
herein by reference.
The particular terms of each issue of Warrants, as well as any
modifications or additions to the general terms of the applicable Warrant
Agreement or Warrant Certificate, will be described in the prospectus supplement
relating to such Warrants. Accordingly, for a description of the terms of a
particular issue of Warrants, reference must be made to the prospectus
supplement relating thereto and to the descriptions set forth below.
DEBT WARRANTS
The company may issue, together with Debt Securities, Currency Warrants,
Index Warrants or Interest Rate Warrants, or separately, Debt Warrants for the
purchase of Debt Securities. If any of the Debt Warrants are sold for foreign
currencies or foreign currency units or if any series of Debt Warrants is
exercisable in foreign currencies or foreign currency units, the restrictions,
elections, tax consequences, specific terms and other information with respect
to such issue of Debt Warrants and such currencies or currency units will be set
forth in the prospectus supplement relating thereto.
If so specified in the prospectus supplement, the Debt Warrants may, in
certain circumstances, be cancelled by the company prior to their expiration
date and the holders thereof will be entitled to receive only the applicable
Cancellation Amount. The Cancellation Amount may be either a fixed amount or an
amount that varies during the term of the Debt Warrants in accordance with a
schedule or formula.
GENERAL
The prospectus supplement will describe the terms of any Debt Warrants
offered thereby, the Debt Warrant Agreement relating to such Debt Warrants and
the Debt Warrant Certificates representing such Debt Warrants, including the
following:
(1) the title of such Debt Warrants;
(2) the aggregate amount of such Debt Warrants;
(3) the initial offering price of such Debt Warrants;
(4) the exercise price;
(5) the currency or currency unit in which the initial offering price
and/or the exercise price of such Debt Warrants is payable;
23
<PAGE>
<PAGE>
(6) whether the Debt Warrants are to be issuable in registered or
bearer form or both, and if in bearer form whether such Debt Warrants may
be exchanged for Debt Warrants in registered form and the circumstances and
places for such exchange, if permitted;
(7) if applicable, the title and terms of related Debt Securities with
which such Debt Warrants are issued, the number of such Debt Warrants
issued with each such Debt Security and the date, if any, on and after
which such Debt Warrants and such Debt Securities will be separately
transferable;
(8) the title, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of all such Debt Warrants;
(9) the principal amount of Debt Securities purchasable upon exercise
of each Debt Warrant and the price at which such principal amount of Debt
Securities may be purchased upon such exercise;
(10) the date on which the right to exercise such Debt Warrants shall
commence and the date (the 'Debt Warrant Expiration Date') on which such
right shall expire;
(11) any minimum number of Debt Warrants which must be exercised at
any one time, other than upon automatic exercise;
(12) the maximum number, if any, of such Debt Warrants that may,
subject to election by the company, be exercised by all owners (or by any
person or entity) on any day;
(13) any provisions for the automatic exercise of such Debt Warrants;
(14) whether and under which circumstances such Debt Warrants may be
cancelled by the company prior to expiration;
(15) any other procedures and conditions relating to the exercise of
such Debt Warrants;
(16) the identity of the Debt Warrant Agent;
(17) any national securities exchange on which such Debt Warrants will
be listed;
(18) provisions, if any, for issuing such Debt Warrants in
certificated form;
(19) if applicable, a discussion of certain United States federal
income tax, accounting or other special considerations applicable thereto;
and
(20) any other terms of the Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and, if in registered form, may be
presented for registration of transfer and Debt Warrants may be exercised at the
corporate trust office of the Debt Warrant Agent or any other office indicated
in the prospectus supplement relating thereto (Section 3.1). Prior to the
exercise of Debt Warrants, holders of Debt Warrants will not be entitled to
payments of principal of (or premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise, or to enforce any of the covenants in
the indenture (Section 4.1).
EXERCISE OF DEBT WARRANTS
Unless otherwise provided in the prospectus supplement, each Debt Warrant
will entitle the holder thereof to purchase for cash such principal amount of
Debt Securities at such exercise price as shall in each case be set forth in, or
be determinable as set forth in, the prospectus supplement relating to the Debt
Warrants offered thereby (Section 2.1). Debt Warrants may be exercised at any
time up to the close of business on the Debt Warrant Expiration Date specified
in the prospectus supplement relating to the Debt Warrants offered thereby.
After the close of business on the Debt Warrant Expiration Date (or such later
date to which such Debt Warrant Expiration Date may be extended by the company),
unexercised Debt Warrants will become void (Section 2.2).
Debt Warrants may be exercised as set forth in the prospectus supplement
relating to the Debt Warrants offered thereby. Upon receipt of payment and the
Debt Warrant Certificate properly completed and duly executed at the corporate
trust office of the Debt Warrant Agent or
24
<PAGE>
<PAGE>
any other office indicated in the prospectus supplement, the company will, as
soon as practicable, forward to the person entitled thereto the Debt Securities
purchasable upon such exercise. If fewer than all the Debt Warrants represented
by such Debt Warrant Certificate are exercised, a new Debt Warrant Certificate
will be issued for the remaining amount of Debt Warrants (Section 2.3).
OTHER INFORMATION
Other important information concerning Debt Warrants is set forth below
under 'Certain Items Applicable to All Warrants -- Modifications,' ' -- Merger,
Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by
Beneficial Owner; Governing Law.'
CURRENCY WARRANTS
The company may issue, together with Debt Securities, Debt Warrants, Index
Warrants or Interest Rate Warrants, or separately, Currency Warrants
(a) in the form of Currency Put Warrants, entitling the owners thereof
to receive from the company the Currency Warrant Cash Settlement Value (as
shall be defined in the prospectus supplement) of the right to sell a
specified amount of one currency (whether U.S. dollars or a foreign
currency or foreign currency unit) (a 'Base Currency') for a specified
amount of a different currency (whether U.S. dollars or a foreign currency
or foreign currency unit) (a 'Reference Currency'),
(b) in the form of Currency Call Warrants, entitling the owners
thereof to receive from the company the Currency Warrant Cash Settlement
Value of the right to purchase a specified amount of a Base Currency for a
specified amount of a Reference Currency, or
(c) in such other form as shall be specified in the related prospectus
supplement. The prospectus supplement for an issue of Currency Warrants
will set forth the formula pursuant to which the Currency Warrant Cash
Settlement Value will be determined, including any multipliers, if
applicable.
The prospectus supplement will describe the terms of any Currency Warrants
offered thereby, the Currency Warrant Agreement relating to such Currency
Warrants and the Currency Warrant Certificates representing such Currency
Warrants, including the following:
(1) the title of such Currency Warrants;
(2) the aggregate amount of such Currency Warrants;
(3) the initial offering price of such Currency Warrants;
(4) the exercise price, if any;
(5) the currency or currency unit in which the initial offering price,
the exercise price, if any, and the Currency Warrant Cash Settlement Value
of such Currency Warrants is payable;
(6) the Base Currency and the Reference Currency for such Currency
Warrants;
(7) whether such Currency Warrants shall be Currency Put Warrants,
Currency Call Warrants or otherwise;
(8) the formula for determining the Currency Warrant Cash Settlement
Value, if applicable, of each Currency Warrant;
(9) whether and under what circumstances a minimum and/or maximum
expiration value is applicable upon the expiration or exercise of such
Currency Warrants;
(10) the effect or effects, if any, of the occurrence of a Market
Disruption Event or Force Majeure Event (each as defined in the Currency
Warrant Agreement);
(11) the date on which the right to exercise such Currency Warrants
shall commence and the date (the 'Currency Warrant Expiration Date') on
which such right shall expire;
(12) any minimum number (or maximum number) of Currency Warrants which
must be exercised at any one time, other than upon automatic exercise;
25
<PAGE>
<PAGE>
(13) the maximum number, if any, of such Currency Warrants that may,
subject to election by the company, be exercised by all owners (or by any
person or entity) on any day;
(14) any provisions for the automatic exercise of such Currency
Warrants other than at expiration;
(15) whether and under what circumstances such Currency Warrants may
be cancelled by the company prior to their expiration date;
(16) any provisions permitting a Holder to condition any notice of
exercise on the absence of certain specified changes in the Spot Rate (as
defined in the Currency Warrant Agreement);
(17) any other procedures and conditions relating to the exercise of
such Currency Warrants;
(18) the identity of the Currency Warrant Agent;
(19) any national securities exchange on which such Currency Warrants
will be listed;
(20) provisions, if any, for issuing such Currency Warrants in
certificated form;
(21) if such Currency Warrants are not issued in book-entry form, the
place or places at which payments in respect of such Currency Warrants are
to be made by the company;
(22) if applicable, a discussion of certain United States federal
income tax, accounting or other special considerations applicable thereto;
and
(23) any other terms of such Currency Warrants.
Other important information concerning Currency Warrants is set forth below
under 'Certain Items Applicable to All Warrants -- Modifications,' ' -- Merger,
Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by
Beneficial Owner; Governing Law' and 'Certain Items Applicable to Currency
Warrants, Index Warrants and Interest Rate Warrants -- Exercise of Warrants,'
' -- Market Disruption and Force Majeure Events,' ' -- Settlement Currency' and
' -- Listing.'
INDEX WARRANTS
The company may issue, together with Debt Securities, Debt Warrants,
Currency Warrants or Interest Rate Warrants, or separately, Index Warrants
(a) in the form of Index Put Warrants, entitling the owners thereof to
receive from the company the Index Cash Settlement Value (as shall be
defined in the prospectus supplement) in cash, which amount will be
determined by reference to the amount, if any, by which the Fixed Amount
(as shall be defined in the prospectus supplement) at the time of exercise
exceeds the Index Value (as shall be defined in the prospectus supplement),
(b) in the form of Index Call Warrants, entitling the owners thereof
to receive from the company the Index Cash Settlement Value in cash, which
amount will be determined by reference to the amount, if any, by which the
Index Value at the time of exercise exceeds the Fixed Amount,
(c) in the form of Index Spread Warrants, entitling the owners thereof
to receive from the company the Index Cash Settlement Value in cash, which
amount will be determined by reference to the amount, if any, by which the
Reference Index Value (as shall be defined in the prospectus supplement) at
the time of exercise exceeds the Base Index Value (as shall be defined in
the prospectus supplement) or
(d) in such other form as shall be specified in the related prospectus
supplement. The prospectus supplement for an issue of Index Warrants will
set forth the formula pursuant to which the Index Cash Settlement Value
will be determined, including any multipliers, if applicable.
26
<PAGE>
<PAGE>
The prospectus supplement will describe the terms of Index Warrants offered
thereby, the Index Warrant Agreement relating to such Index Warrants and the
Index Warrant Certificate representing such Index Warrants, including the
following:
(1) the title of such Index Warrants;
(2) the aggregate amount of such Index Warrants;
(3) the initial offering price of such Index Warrants;
(4) the exercise price, if any;
(5) the currency or currency unit in which the initial offering price,
the exercise price, if any, and the Index Cash Settlement Value of the
Index Warrants is payable;
(6) the Index or Indices for such Index Warrants, which may be based
on one or more U.S. or foreign stocks, bonds, or other securities, one or
more U.S. or foreign interest rates, one or more currencies or currency
units, or any combination of the foregoing, and may be a preexisting U.S.
or foreign index compiled and published by a third party or an index based
on one or more securities, interest rates or currencies selected by the
company solely in connection with the issuance of such Index Warrants, and
certain information regarding such Index or Indices and the underlying
securities, interest rates or currencies or currency units (including, to
the extent possible, the policies of the publisher of the Index with
respect to additions, deletions and substitutions of such securities,
interests rates or currencies or currency units);
(7) whether such Index Warrants shall be Index Put Warrants, Index
Call Warrants, Index Spread Warrants or otherwise;
(8) the method of providing for a substitute Index or Indices or
otherwise determining the amount payable in connection with the exercise of
such Index Warrants if any Index changes or ceases to be made available by
its publisher, which determination will be made by an independent expert;
(9) the formula for determining the Index Cash Settlement Value, if
applicable, of each Index Warrant;
(10) whether and under what circumstances a minimum and/or maximum
expiration value is applicable upon the expiration or exercise of such
Index Warrants;
(11) the effect or effects, if any, of the occurrence of a Market
Disruption Event or Force Majeure event (each as defined in the Index
Warrant Agreement);
(12) the date on which the right to exercise such Index Warrants shall
commence and the date (the 'Index Warrant Expiration Date') on which such
right shall expire;
(13) any minimum number of Index Warrants which must be exercised at
any one time, other than upon automatic exercise;
(14) the maximum number if any, of such Index Warrants that may,
subject to election by the company, be exercised by all owners (or by any
person or entity) on any day;
(15) any provisions for the automatic exercise of such Index Warrants
other than at expiration;
(16) whether and under what circumstances such Index Warrants may be
cancelled by the company prior to their expiration date;
(17) any provisions permitting a Holder to condition any notice of
exercise on the absence of certain specified changes in the Index Value,
the Base Index Value or the Referenced Index Value after the date of
exercise;
(18) any other procedures and conditions relating to the exercise of
such Index Warrants;
(19) the identity of the Index Warrant Agent;
(20) any national securities exchange on which such Index Warrants
will be listed;
(21) provisions, if any, for issuing such Index Warrants in
certificated form;
27
<PAGE>
<PAGE>
(22) if such Index Warrants are not issued in book-entry form, the
place or places at which payments in respect of such Index Warrants are to
be made by the company;
(23) if applicable, a discussion of certain United States federal
income tax, accounting or other special considerations applicable thereto;
and
(24) any other terms of such Index Warrants.
Other important information concerning Index Warrants is set forth below
under 'Certain Items Applicable to All Warrants -- Modifications,' ' -- Merger,
Consolidation, Sale or Other Disposition' and ' -- Enforceability of Rights by
Beneficial Owner; Governing Law' and 'Certain Items Applicable to Currency
Warrants, Index Warrants and Interest Rate Warrants -- Exercise of Warrants,'
' -- Market Disruption and Force Majeure Events,' ' -- Settlement Currency' and
' -- Listing.'
INTEREST RATE WARRANTS
The company may issue, together with Debt Securities, Debt Warrants,
Currency Warrants or Index Warrants, or separately, Interest Rate Warrants
(a) in the form of Interest Rate Put Warrants, entitling the owners
thereof to receive from the company the Interest Rate Cash Settlement Value
(as shall be defined in the prospectus supplement) in cash, which amount
will be determined by reference to the amount, if any, by which the Spot
Amount (as shall be defined in the prospectus supplement) is less than the
Strike Amount (as shall be defined in the prospectus supplement) on the
applicable valuation date following exercise,
(b) in the form of Interest Rate Call Warrants, entitling the owners
thereof to receive from the company the Interest Rate Cash Settlement Value
in cash, which amount will be determined by reference to the amount, if
any, by which the Spot Amount on the applicable valuation date following
exercise exceeds the Strike Amount or
(c) in such other form as shall be specified in the related prospectus
supplement. The prospectus supplement for an issue of Interest Rate
Warrants will set forth the formula pursuant to which the Interest Rate
Cash Settlement Value will be determined, including any multipliers, if
applicable. The Strike Amount may either be a fixed yield, price or rate of
a Sovereign Debt Instrument, a Rate or any combination of Sovereign Debt
Instruments and/or Rates or a yield, price or rate that varies during the
term of the Interest Rate Warrants in accordance with a schedule or
formula. The Sovereign Debt Instrument will be one or more instruments
specified in the applicable prospectus supplement issued either by the
United States government or by a foreign government. The Rate will be one
or more interest rates or interest rate swap rates established from time to
time by one or more financial institutions specified in the applicable
prospectus supplement.
The prospectus supplement will describe the terms of Interest Rate Warrants
offered thereby, the Interest Rate Warrant Agreement relating to such Interest
Rate Warrants and the Interest Rate Warrant Certificate representing such
Interest Rate Warrants, including the following:
(1) the title of such Interest Rate Warrants;
(2) the aggregate amount of such Interest Rate Warrants;
(3) the initial offering price of such Interest Rate Warrants;
(4) the exercise price, if any;
(5) the currency or currency unit in which the initial offering price,
the exercise price, if any, and the Interest Rate Cash Settlement Value of
such Interest Rate Warrants is payable;
(6) the Sovereign Debt Instrument (which may be one or more debt
instruments issued either by the United States government or by a foreign
government), the Rate (which may be one or more interest rates or interest
rate swap rates established from time to time by one or more specified
financial institutions) or the other yield, price or rate utilized for such
Interest
28
<PAGE>
<PAGE>
Rate Warrants, and certain information regarding such Sovereign Debt
Instrument, Rate or such other yield, price or rate;
(7) whether such Interest Rate Warrants shall be Interest Rate Put
Warrants, Interest Rate Call Warrants or otherwise;
(8) the Strike Amount, the method of determining the Spot Amount and
the method of expressing movements in the yield or closing price of the
Sovereign Debt Instrument or in the level of the Rate or such other yield,
price or rate as a cash amount in the currency in which the Interest Rate
Cash Settlement Value of such Warrants is payable;
(9) the formula for determining the Interest Rate Cash Settlement
Value, if applicable, of each Interest Rate Warrant;
(10) whether and under what circumstances a minimum and/or maximum
expiration value is applicable upon the expiration or exercise of such
Interest Rate Warrants;
(11) the effect or effects, if any, of the occurrence of a Market
Disruption Event or Force Majeure Event (each as defined in the Interest
Rate Warrant Agreement);
(12) the date on which the right to exercise such Interest Rate
Warrants shall commence and the date (the 'Interest Rate Warrant Expiration
Date') on which such right shall expire;
(13) any minimum number of Interest Rate Warrants which must be
exercised at any one time, other than upon automatic exercise;
(14) the maximum number, if any, of such Interest Rate Warrants that
may, subject to elections by the company, be exercised by all owners (or by
any person or entity) on any day;
(15) any provisions for the automatic exercise of such Interest Rate
Warrants other than at expiration;
(16) whether and under what circumstances such Interest Rate Warrants
may be cancelled by the company prior to their expiration date;
(17) any provisions permitting a Holder to condition any notice of
exercise on the absence of certain specified changes in the Spot Amount
after the date of exercise;
(18) any other procedures and conditions relating to the exercise of
such Interest Rate Warrants;
(19) the identity of the Interest Rate Warrant Agent;
(20) any national securities exchange on which such Interest Rate
Warrants will be listed;
(21) provisions, if any, for issuing such Interest Rate Warrants in
certificated form;
(22) if such Interest Rate Warrants are not issued in book-entry form,
the place or places at which payments in respect of such Interest Rate
Warrants are to be made by the company;
(23) if applicable, a discussion of certain United States federal
income tax, accounting or other special considerations applicable thereto;
and;
(24) any other terms of such Interest Rate Warrants.
Other important information concerning Interest Rate Warrants is set forth
below under 'Certain Items Applicable to All Warrants -- Modifications,'
' -- Merger, Consolidation, Sale or Other Disposition' and ' -- Enforceability
of Rights by Beneficial Owner; Governing Law' and 'Certain Items Applicable to
Currency Warrants, Index Warrants and Interest Rate Warrants -- Exercise of
Warrants,' ' -- Market Disruption and Force Majeure Events,' ' -- Settlement
Currency' and ' -- Listing.'
CERTAIN ITEMS APPLICABLE TO ALL WARRANTS
MODIFICATIONS. Each Warrant Agreement and the terms of each issue of
Warrants may be amended by the company and the applicable Warrant Agent, without
the consent of the beneficial owners or the registered holders, for the purpose
of curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained therein, or in any other manner
29
<PAGE>
<PAGE>
which the company may deem necessary or desirable and which will not materially
adversely affect the interests of the beneficial owners of the then outstanding
unexercised Warrants (Section 6.1).
The company and the applicable Warrant Agent may also modify or amend the
applicable Warrant Agreement and the terms of the related Warrants, with the
consent of the beneficial owners of not less than a majority in number of the
then outstanding unexercised Warrants affected, provided that no such
modification or amendment that reduces the amount receivable upon exercise,
shortens the period of time during which the Warrants may be exercised,
increases the minimum or decreases the maximum number of Warrants that may be
exercised by or on behalf of any one beneficial owner at any one time, changes
the formula for determining the Cash Settlement Value or otherwise materially
and adversely affects the exercise rights of the owners or reduces the number of
outstanding Warrants the consent of whose beneficial owners is required for
modification or amendment of the applicable Warrant Agreement or the terms of
the Warrants may be made without the consent of each beneficial owner affected
thereby (Section 6.1).
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITION. The company will covenant
in the Warrant Agreements that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all its assets to any person
(other than an Asset Drop-Down (as defined under 'Description of the Debt
Securities -- Covenants -- Consolidation, Merger, Sale or Conveyance of Assets
of the company')), unless (1) either the company is the continuing corporation
or the successor corporation or the person which acquires substantially all the
assets of the company (if other than the company) expressly assumes the due and
punctual performance and observance of all the covenants and conditions of each
Warrant Agreement to be performed or observed by the company, by amendment to
the Warrant Agreements satisfactory to the respective Warrant Agents, executed
and delivered to the Warrant Agents by such corporation, and (2) the company or
such successor corporation, as the case may be, is not, immediately after such
merger or consolidation, or such sale or conveyance, in default in the
performance of any such covenant or condition. In the case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation will succeed to and be
substituted for the company, with the same effect as if it had been named in the
Warrant Agreements, and, in the case of any such sale or conveyance, the company
will be released and discharged from all obligations and covenants under the
Warrant Agreements and the Warrants. In the event of any Asset Drop-Down after
the date of any Warrant Agreement, any subsequent sale or conveyance of assets
by the Drop-Down Subsidiary will be deemed to be a sale or conveyance of assets
by the company for purposes of the covenant described in this paragraph. The
term 'substantially all,' which appears in the foregoing covenant, is not
defined in the Warrant Agreements and a precise explanation of such term is not
feasible. The company will interpret such term in any particular situation in
light of all then existing facts and circumstances.
ENFORCEABILITY OF RIGHTS BY BENEFICIAL OWNER; GOVERNING LAW. Each Warrant
Agent will act solely as an agent of the company in connection with the issuance
and exercise of the applicable Warrants and will not assume any obligation or
relationship of agency or trust for or with any owner of a beneficial interest
in any Warrant or with the registered holder thereof (Sections 5.2). A Warrant
Agent shall have no duty or responsibility in the case of any default by the
company in the performance of its covenants or agreements under the applicable
Warrant Agreement or Warrant Certificate, except as provided in the applicable
Debt Warrant Agreement, including, without limitation, any duty or
responsibility to initiate any proceedings at law or otherwise or to make any
demand upon the company (Section 5.2). Beneficial owners may, without the
consent of the applicable Warrant Agent, enforce by appropriate legal action, on
their own behalf, their right to exercise their Warrants, to receive Debt
Securities, in the case of Debt Warrants, and to receive payment, if any, for
their Warrants, in the case of Currency Warrants, Index Warrants or Interest
Rate Warrants (Section 3.3 of the Debt Warrant Agreement and Section 3.1 of each
other Warrant Agreement).
Except as may otherwise be provided in the prospectus supplement relating
thereto, each issue of Warrants and the applicable Warrant Agreement will be
governed by and construed in
30
<PAGE>
<PAGE>
accordance with the law of the State of New York (Section 6.7 of the Debt
Warrant Agreement and Section 6.5 of each other Warrant Agreement).
CERTAIN ITEMS APPLICABLE TO CURRENCY WARRANTS, INDEX WARRANTS AND INTEREST RATE
WARRANTS
EXERCISE OF WARRANTS. Except as may otherwise be provided in the applicable
prospectus supplement relating thereto, (a) each Currency Warrant, Index Warrant
and Interest Rate Warrant will entitle the owner, upon payment of the exercise
price, if any, to the applicable Cash Settlement Value of such Warrant, on the
applicable Exercise Date, in each case as such terms will further be defined in
the applicable prospectus supplement relating thereto (Sections 1.1 and 2.2) and
(b) if not exercised prior to 1:30 p.m., New York City time, on the Business Day
preceding the applicable Warrant Expiration Date, the Warrants will be deemed
automatically exercised on such Warrant Expiration Date (Section 2.3). As
described below, Currency Warrants, Index Warrants and Interest Rate Warrants
may also be deemed to be automatically exercised if they are delisted.
Procedures for exercise of the Currency Warrants, Index Warrants and Interest
Rate Warrants will be set forth in the applicable prospectus supplement.
MARKET DISRUPTION AND FORCE MAJEURE EVENTS. If so specified in the
applicable prospectus supplement, following the occurrence of a Market
Disruption Event or Force Majeure Event (as each term shall be defined therein),
the Cash Settlement Value of a Currency Warrant, an Index Warrant or an Interest
Rate Warrant may be determined on a different basis than under normal exercise
of a Warrant or the determination of the applicable Cash Settlement Value. In
addition, if so specified in the applicable prospectus supplement, Currency
Warrants, Index Warrants and Interest Rate Warrants may, in certain
circumstances, be cancelled by the company prior to the expiration date and the
holders thereof will be entitled to receive only the applicable Cancellation
Amount. The Cancellation Amount may be either a fixed amount or an amount that
varies during the term of the Warrants in accordance with a schedule or formula.
SETTLEMENT CURRENCY. Currency Warrants, Index Warrants and Interest Rate
Warrants will be settled only in U.S. dollars (unless settlement in a foreign
currency is specified in the applicable prospectus supplement and is permissible
under securities exchange rules approved by the Commission) and accordingly will
not require or entitle an owner to sell, deliver, purchase, or take delivery of
the currency, security or other instrument underlying such Warrants. If any of
the Currency Warrants, Index Warrants or Interest Rate Warrants are sold for, or
if the exercise price, if any, is payable in, foreign currencies or foreign
currency units or if the amount payable by the company in respect of any series
of Currency Warrants, Index Warrants or Interest Rate Warrants is payable in
foreign currencies or foreign currency units, the restrictions, elections, tax
consequences, specific terms and other information with respect to such issue of
Warrants and such currencies or currency units will be set forth in the
prospectus supplement relating thereto.
LISTING. Unless otherwise provided in the prospectus supplement, each issue
of Currency Warrants, Index Warrants and Interest Warrants will be listed on a
national securities exchange, as specified in the applicable prospectus
supplement, subject only to official notice of issuance, as a pre-condition to
the sale of any such Warrants. It may be necessary in certain circumstances for
such national securities exchange to obtain the approval of the Commission in
connection with any such listing. In the event that such Warrants are delisted
from, or permanently suspended from trading on, such exchange, and at or prior
to such delisting or suspension, such Warrants shall not have been listed on
another national securities exchange, any such Warrants not previously exercised
will be deemed automatically exercised on the date such delisting or permanent
trading suspension becomes effective (Sections 2.3). The applicable Cash
Settlement Value to be paid in such event will be as set forth in the applicable
prospectus supplement. The company will notify holders of such Warrants as soon
as practicable of such delisting or permanent trading suspension. The applicable
Warrant Agreement will contain a covenant of the company not to seek delisting
of such Warrants from or permanent suspension of their trading on, such exchange
(Section 2.4 of the Currency Warrant Agreement and the Interest Rate Warrant
Agreement and Section 2.5 of the Index Warrant Agreement).
31
<PAGE>
<PAGE>
DESCRIPTION OF THE GUARANTEES
Newcourt will provide an irrevocable unconditional guarantee of payment of
principal, premium, if any, and interest on the Debt Securities. Newcourt will
also provide an irrevocable unconditional guarantee of payment of all
obligations of the company under the terms of the Warrants. Such guarantees will
be unsecured obligations of Newcourt and will rank pari passu (equal in right of
payment) with all other unsecured and unsubordinated indebtedness of Newcourt.
At December 31, 1998, Newcourt's consolidated indebtedness was approximately
$11.6 billion (C$18.0 billion). Such guarantee will, however, be effectively
subordinate (with respect to the assets of Newcourt's subsidiaries) to the
indebtedness and other liabilities of such subsidiaries other than AT&T Capital.
At December 31, 1998, such indebtedness and other liabilities (including those
of AT&T Capital) aggregated approximately $10.7 billion (C$16.7 billion).
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more global Securities that will be deposited with or on behalf of a
depositary identified in the prospectus supplement relating to such series.
Global Securities representing Debt Securities or Debt Warrants may be issued in
either registered or bearer form. Global Securities representing Currency
Warrants, Index Warrants or Interest Rate Warrants will be issued in registered
form only. Global Securities may be issued in either temporary or permanent
form.
The specific terms of the depositary arrangement with respect to any
Securities of a series will be described in the prospectus supplement relating
to such series. The company anticipates that the following provisions will apply
to all depositary arrangements.
Unless otherwise specified in the prospectus supplement, Securities which
are to be represented by a global Security in registered form to be deposited
with or on behalf of a depositary will be registered in the name of such
depositary or its nominee. Upon the issuance of a global Security in registered
form, the depositary for such global Security will credit the respective
principal amounts, in the case of Debt Securities, and the respective number of
warrants, in the case of Warrants represented by such global Security, to the
accounts of institutions that have accounts with such depositary or its nominee
('participants'). The accounts to be credited shall be designated by the
underwriters or agents of such Securities, or by the company if such Securities
are offered and sold directly by the company. Ownership of beneficial interests
in such global Securities will be limited to participants or persons that may
hold interests through participants. Ownership of beneficial interests by
participants in such global Securities will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
depositary or its nominee for such global Security. Ownership of beneficial
interests in global Securities by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a global Security.
So long as the depositary for a global Security in registered form, or its
nominee, is the registered owner of such global Security, such depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Securities represented by such global Security for all purposes under the
indenture, in the case of Debt Securities, or under the applicable Warrant
Agreement, in the case of Warrants, governing such Securities. Except as set
forth below or as the company may otherwise agree in its sole discretion, owners
of beneficial interests in such global Security will not be entitled to have
Securities of the series represented by such global Security registered in their
names, will not receive or be entitled to receive physical delivery of
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the indenture, in the case of Debt Securities,
or under the applicable Warrant Agreement, in the case of Warrants.
32
<PAGE>
<PAGE>
Payments in respect of Securities registered in the name of or held by a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner or the holder of the global Security. None
of the company, the Trustee or applicable Warrant Agent, any Paying Agent or any
Security Registrar (the 'Security Registrar') for such Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
The company expects that the depositary for a permanent global Security in
registered form, upon receipt of any payment in respect of a permanent global
Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such global
Security as shown on the records of such depositary. The company also expects
that payments by participants to owners of beneficial interests in such global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in 'street name,' and
will be the responsibility of such participants.
A global Security in registered form may not be transferred except as a
whole by the depositary for such global Security to a nominee of such depositary
or by a nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor of such
depositary or nominee or a nominee of such successor. If a depositary for a
permanent global Security in registered form is at any time unwilling or unable
to continue as depositary and a successor depositary is not appointed by the
company within 90 days, the company will issue Securities in definitive
registered form in exchange for the global Security representing such
Securities. In addition, the company may at any time and in its sole discretion
determine not to have any Securities of a series in registered form represented
by one or more global Securities and, in such event, will issue Securities of
such series in definitive form in exchange for all the global Securities
representing such Series. Further, if the company so specifies with respect to
the Securities of a series or otherwise consents in its sole discretion, an
owner of a beneficial interest in a global Security representing Securities of
such series may, on terms acceptable to the company and the depositary for such
global Security, receive Securities of such series in definitive form. In any
such instance, an owner of a beneficial interest in a global Security will be
entitled to physical delivery in definitive form of Securities of the series
represented by such global Security equal in principal amount, in the case of
Debt Securities, or number, in the case of Warrants, to such beneficial interest
and to have such Securities registered in its name (if the Securities of such
series are issuable as registered securities). Unless otherwise specified by the
company, Securities of such series so issued in definitive form will be issued
either as registered or bearer securities (if the Securities of such series are
issuable in such form) and in authorized denominations, in the case of Debt
Securities, or in authorized numbers, in the case of Warrants, as specified in
the applicable prospectus supplement. See, however, 'Description of the Debt
Securities -- Limitations on Issuance of Bearer Debt Securities' for a
description of certain restrictions on the issuance of a bearer Debt Security in
definitive form in exchange for an interest in a global Security.
BEARER DEBT SECURITIES
If so specified in the prospectus supplement, pending the availability of a
permanent global Security, all or any portion of the Debt Securities of a series
which may be issuable as bearer Debt Securities will initially be represented by
one or more temporary global Securities, without interest coupons, to be
deposited with a common depositary in London for Morgan Guaranty Trust company
of New York, Brussels Office, as operator of the Euroclear System ('Euroclear')
and Cedel Bank, societe anonyme ('Cedel Bank') for credit to the designated
accounts. The interests of the beneficial owner or owners in such a temporary
global Security in bearer form will be exchangeable for definitive bearer Debt
Securities (including interests in a permanent global Security in bearer form),
representing Debt Securities having the same interest rate and stated maturity,
but only upon written certification in the form and to the effect described
under
33
<PAGE>
<PAGE>
'Description of the Debt Securities -- General' unless such certification has
been provided on an earlier interest payment date. The beneficial owner of a
Debt Security represented by a temporary global Security in bearer form or a
permanent global Security in bearer form may, on or after the applicable
exchange date and upon 30 days' notice to the Trustee given through Euroclear or
Cedel Bank, exchange its interest for definitive bearer Debt Securities or, if
specified in the prospectus supplement, definitive registered Debt Securities of
any authorized denomination. No bearer Debt Security delivered in exchange for a
temporary global Security or a permanent global Security shall be mailed or
otherwise delivered to any location in the United States in connection with such
exchange.
Unless otherwise specified in the prospectus supplement, interest in
respect of any portion of such a temporary global Security in bearer form
payable in respect of an Interest Payment Date occurring prior to the issuance
of a permanent global Security in bearer form will be paid to each of Euroclear
and Cedel Bank with respect to the portion of the temporary global Security in
bearer form held for its account. Each of Euroclear and Cedel Bank will
undertake in such circumstances to credit such interest received by it in
respect of a temporary global Security in bearer form to the respective accounts
for which it holds such temporary global Security in bearer form as of the
relevant Interest Payment Date, but only upon receipt in each case of written
certification, in the form and to the effect described under 'Description of
Debt Securities -- General.'
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
A summary of the material United States federal income tax consequences to
persons investing in Securities will be set forth in the prospectus supplement.
This summary in the prospectus supplement will be presented for information
purposes only, however, and will not be intended as legal or tax advice to
prospective purchasers. Prospective purchasers of Securities are urged to
consult their own tax advisors prior to any acquisition of Securities.
PLAN OF DISTRIBUTION
We may sell any of the Securities in three ways: (1) directly to
purchasers, (2) through agents, and (3) through dealers or underwriters in a
public offering by them.
We may distribute the Securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
The prospectus supplement with respect to an offering of Securities will
set forth the terms of the Securities offered, including the name or names of
any underwriters, dealer or agents; the purchase price of the Securities offered
and the proceeds to us from such sale; the place and time of delivery for the
Securities offered; and any underwriting discounts or concessions allowed or
reallowed or paid to dealers and any securities exchange on which such offered
Securities may be listed. Any initial public offering price, discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Offers to purchase the Securities may be solicited directly by us or by
agents designated by us from time to time. The prospectus supplement for the
offer or sale of the Securities in respect of which this prospectus is delivered
will name any such agent and any commissions payable by us to such agent. Unless
the prospectus supplement states otherwise, any such agent will be acting on a
reasonable best efforts basis for the period of its appointment. Agents may be
deemed to be an underwriter as that term is defined in the Securities Act for
any Securities so offered and sold.
If a dealer is utilized in the sale of the Securities in respect of which
this prospectus is delivered, we will sell such Securities to the dealer, as
principal. The dealer may then resell such Securities to the public at varying
prices to be determined by such dealer at the time of resale. Any such dealer
may be deemed to be an underwriter as that term is defined in the Securities Act
for any Securities so offered and sold.
34
<PAGE>
<PAGE>
If the sale is accomplished by means of an underwritten offering, we will
enter into an underwriting agreement with an underwriter or underwriters at the
time of sale to them, and the names of the underwriters and the terms of the
transaction will be set forth in the prospectus supplement, which, together with
this prospectus, will be used by the underwriters to make resales of the
Securities. Securities offered in an underwritten offering may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by the managing underwriters. Unless the prospectus
supplement states otherwise, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters with respect to a sale of offered Securities will be
obligated to purchase all such offered Securities if any are purchased.
Agents, dealers or underwriters may be entitled under agreements with us to
be indemnified by us against certain civil liabilities, including liabilities
under the Securities Act.
If so stated in the prospectus supplement, we will authorize agents and
underwriters to solicit offers by certain institutions to purchase Securities
from us pursuant to delayed delivery contracts providing for payment and
delivery on a specified future date. Institutions with which such contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, educational and charitable institutions, and other
institutions, but shall in all cases be subject to our approval. Except as
otherwise provided in the prospectus supplement, such contracts will not be
subject to any conditions except that the purchase by an institution of the
Securities covered by such contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject. The prospectus supplement will state the commission that
we will pay to agents and underwriters for soliciting purchases of the
Securities pursuant to such contracts we have accepted.
Agents, dealers or underwriters may be customers of, engage in other
transactions with or perform other services for us in the ordinary course of
business.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the company by
Wilentz, Goldman & Spitzer, P.A., Woodbridge, New Jersey, for Newcourt by John
P. Stevenson, Corporate Secretary, and/or one or more of its Assistant General
Counsels, and for any agent, dealer or underwriter by Chapman and Cutler,
Chicago, Illinois. Such opinions will be conditioned upon, and subject to
certain assumptions regarding, future action required to be taken by Newcourt,
the company and the Trustee in connection with the issuance and sale of any
particular Security, the specific terms of Securities and other matters which
may affect the validity of Securities but which cannot be ascertained on the
date of such opinions. From time to time, Chapman and Cutler provides certain
services to Newcourt and its subsidiaries.
EXPERTS
The consolidated financial statements for Newcourt incorporated by
reference in this prospectus and elsewhere in the Registration Statement, to the
extent and for the periods indicated in their report, have been audited by Ernst
& Young LLP, Chartered Accountants, and are incorporated by reference herein in
reliance on their report given on the authority of that firm as experts in
accounting and auditing.
The consolidated financial statements for the company as of December 31,
1997 and for the year then ended incorporated by reference in the prospectus and
elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto and is incorporated by reference in reliance upon the authority of said
firm as experts in giving said report.
The company's consolidated balance sheet as of December 31, 1996 and the
consolidated statements of income, changes in shareowners' equity, and cash
flows for each of the two years in the period ended December 31, 1996,
incorporated by reference in this prospectus, have been incorporated by
reference in reliance on the report of PricewaterhouseCoopers LLP, independent
auditors, given on the authority of that firm as experts in accounting and
auditing.
35
<PAGE>
<PAGE>
[Logo]
[Logo]
