<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION VIA THE EDGAR SYSTEM ON
OCTOBER 18, 1995
REGISTRATION NO. 33-62601
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ADVANTA CORP.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 23-1462070
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
BRANDYWINE CORPORATE CENTER, 650 NAAMANS ROAD, CLAYMONT, DELAWARE 19703
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
------------------------
GENE S. SCHNEYER, ESQUIRE
ADVANTA CORP.
FIVE HORSHAM BUSINESS CENTER
300 WELSH ROAD, HORSHAM, PA 19044
(215) 657-4000
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box: / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED , 1995
$191,987,000 PRINCIPAL AMOUNT
[ADVANTA LOGO]
REDIRESERVE VARIABLE RATE CERTIFICATES ($1,000 MIN.)
91 DAY NOTES
SIX, EIGHTEEN AND THIRTY MONTH NOTES
ONE, TWO, THREE, FOUR, FIVE, SEVEN AND TEN YEAR NOTES
The Securities offered hereby are debt securities of Advanta Corp. (the
"Company") consisting of RediReserve Variable Rate Certificates (the
"RediReserve Certificates") and Notes (the "Notes", and together with the
RediReserve Certificates, the "Securities").
The interest rates on the Notes and RediReserve Certificates will be
established by the Company from time to time and will be set forth in
supplements hereto. Interest rates are subject to change by the Company, but no
such change will affect any Security theretofore issued or as to which an offer
to purchase has been accepted by the Company.
The RediReserve Certificates are redeemable at the demand of the holder. The
Notes are subject to automatic extension at maturity unless the Company requests
redemption at least seven Business Days (as defined herein) prior to maturity or
the holder elects redemption, in writing, within seven Business Days after
maturity. For information on the terms of such extensions, including the
interest rate to be paid during any extended term, see "Description of
Securities -- Provisions Relating to Notes." The Securities will be
uncertificated and evidenced by book-entry and a statement issued to each
purchaser.
A tabular summary of certain other terms of the Securities offered hereby
appears at page 5.
The Company is not subject to state or federal regulations applicable to
banks and savings and loan associations, including, among other things,
regulations regarding the maintenance of reserves and the quality or condition
of its assets. The Securities offered hereby represent unsecured obligations of
the Company and are not insured or guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") or any other governmental or private entity. SEE "RISK
FACTORS" ON PAGE 6.
The Securities are being offered by the Company directly without an
underwriter or selling agent. The Securities are being offered on a continuous
basis without an expected termination date. See "Plan of Distribution." The
terms of the offering or the Securities may be modified prospectively at any
time. Certain terms of outstanding RediReserve Certificates may be modified. See
"Description of Securities." There is no assurance that all or any portion of
the offered Securities will be sold. It is not expected that there will be a
trading market for any of the Securities. The Company reserves the right to
reject any subscription in whole or in part.
The Securities being offered will not be listed on a securities exchange and
the Company does not expect that any active trading market in the Securities
will develop or be sustained.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------
THE SECURITIES OFFERED HEREBY ARE NOT REGISTERED UNDER THE PENNSYLVANIA
SECURITIES ACT OF 1972. FOR SALES IN PENNSYLVANIA, THE COMPANY IS RELYING
UPON AN EXEMPTION FROM THAT ACT'S REGISTRATION REQUIREMENTS WHICH
IS AVAILABLE FOR THE OFFER AND SALE OF SECURITIES SENIOR TO
SECURITIES OF THE SAME ISSUER WHICH SECURITIES SATISFY
THE MARGIN REQUIREMENTS OF THE BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM UNDER
REGULATION T.
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
UNDERWRITING
PRICE TO COMMISSIONS AND PROCEEDS
PUBLIC(1)(2) DISCOUNTS TO THE COMPANY
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Per Security............................. 100% None 100%(2)
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Total.................................... $191,987,000 None $191,987,000(2)
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</TABLE>
(1) RediReserve Certificates will be issued in payment of interest due on
RediReserve Certificates.
(2) Before deducting expenses estimated at $101,000.00.
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The date of this Prospectus is October , 1995.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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Available Information.................... 2
Incorporation of Certain Information by
Reference.............................. 2
Summary of the Offering.................. 3
The Company............................ 3
Securities Offered..................... 3
Modification, Termination or Extension
of Offering......................... 4
Trustee and Indenture.................. 4
Highlights of Terms of Securities
Offered................................ 5
Risk Factors............................. 6
Ratio of Earnings to Fixed Charges....... 7
Plan of Distribution..................... 7
Use of Proceeds.......................... 7
Description of Securities................ 7
General................................ 7
Provisions Relating to RediReserve
Certificates........................ 8
Provisions Relating to Notes........... 10
Provisions Relating to All
Securities.......................... 11
Legal Opinion............................ 13
Experts.................................. 13
</TABLE>
No Company employee or other person has been authorized to give any oral
information or to make any oral representation other than those contained in
this Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company. This Prospectus
does not constitute an offer of any securities other than those to which it
relates or to any person in any jurisdiction where such offer would be unlawful.
The delivery of this Prospectus at any time does not imply that the information
herein is true as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Seven World Trade Center, 13th Floor, New York, N.Y.
10048; and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission at the
address of the Commission set forth above.
The Company has filed with the Commission registration statements
(collectively, with all amendments and exhibits thereto, called the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Securities offered hereby. This
Registration Statement and the descriptions of documents contained herein are
complete in all material respects. However, this Prospectus does not contain all
of the information set forth in the Registration Statement. For further
information with respect to the Company and the Securities offered hereby,
reference is made to the Registration Statement. Statements contained herein
concerning any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement. Each such statement is qualified in its entirety by such
reference. Copies of all or any part of the Registration Statement, including
exhibits thereto, may be obtained, upon payment of the prescribed fees, at the
offices of the Commission as set forth above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
As required by the Commission, the Company hereby incorporates by
reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1995; and
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<PAGE> 4
3. The Company's Current Reports on Form 8-K dated January 24, April 19,
July 12, July 20, August 3, August 15, 1995 and October 18, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a Post-Effective
Amendment which indicates that all Securities offered have been sold or which
deregisters all Securities then remaining unsold, shall be deemed to be
incorporated by reference in the Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that a statement
contained herein or any subsequently filed document which is deemed to be
incorporated by reference herein modifies or supersedes such document. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part hereof.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any
document incorporated herein by reference (other than exhibits to such document
which are not specifically incorporated by reference in such document). Requests
for such documents should be directed to: Investor Relations, Advanta Corp.,
Five Horsham Business Center, 300 Welsh Road, Horsham, Pennsylvania 19044-2209,
telephone (215) 784-5335.
SUMMARY OF THE OFFERING
The following information is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
THE COMPANY
The Company is a highly focused direct marketer of select consumer
financial services. The Company primarily originates and services credit cards
and mortgage loans. Other businesses include small ticket equipment leasing,
credit insurance and deposit products nationwide. At June 30, 1995, assets under
management totaled approximately $10.6 billion.
The Company was incorporated in Delaware in 1974 as Teachers Service
Organization, Inc., the successor to a business originally founded in 1951. In
January 1988, the Company's name was changed from TSO Financial Corp. to Advanta
Corp. The Company's principal executive office is located at Brandywine
Corporate Center, 650 Naamans Road, Claymont, Delaware 19703. Its principal
operating offices are located at Five Horsham Business Center, 300 Welsh Road,
Horsham, Pennsylvania 19044. The Company's telephone numbers at its principal
executive and operating offices are, respectively, (302) 791-4400 and (215)
657-4000.
SECURITIES OFFERED
This offering relates to $191,987,000 in principal amount of the following
Securities of the Company: RediReserve Variable Rate Certificates ("RediReserve
Certificates") and Notes ("Notes"). The RediReserve Certificates are payable on
the demand of the holder. The Notes have maturities of 91 Days, six months, one
year, 18 months, two years, 30 months, and three, four, five, seven and ten
years after the date of issue. The Securities are not insured, guaranteed or
secured by any lien on assets of the Company and there are no sinking fund
provisions.
In lieu of paying interest by check, additional RediReserve Certificates
will be issued in payment of interest due on RediReserve Certificates. Interest
on RediReserve Certificates will only be paid in such manner, except that upon
redemption by a holder of all RediReserve Certificates held by such holder, any
accrued interest will be paid by check. Further, subject to the limitations
described under "Redemption at Holder's Election" and "Redemption by Draft,"
holders may access by draft all funds held in the form of RediReserve
Certificates.
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No interest will be paid on RediReserve Certificates for any day during
which the principal balance in an account is below $1,000.
A tabular summary of the terms of the Securities appears on page 5.
MODIFICATION, TERMINATION OR EXTENSION OF OFFERING
The Company reserves the right to modify at any time the terms of the
offering or the Securities as set forth on the cover page of this Prospectus.
Any such modification will apply only to Securities offered after the date of
such modification, except as described under "Description of Securities --
General." From time to time, the aggregate amount of Securities offered for sale
by the Company may be increased.
TRUSTEE AND INDENTURE
The Securities are to be issued under the terms of the Trust Indenture to
be entered into between the Company and Mellon Bank, N.A. ("Mellon"), as Trustee
(the "Indenture"). Mellon is also the successor trustee under a Trust Indenture
dated April 22, 1981 between the Company and a predecessor of Mellon (the "Prior
Indenture"). Securities to be issued initially under the Indenture will be
substantially identical to those issued under the Prior Indenture, except that
Securities issued under the Prior Indenture are subordinated in right of payment
to Senior Debt of the Company (as defined in the Prior Indenture) whereas
Securities to be issued under the Indenture will not be subordinated. In
addition, the definition of "Event of Default" in the Indenture includes a
default in the performance by the Company of covenants in the Indenture that
continues for 60 days (as opposed to 30 days in the Prior Indenture) after the
Company has been given notice of the default by the Trustee or holders of at
least 25% in principal amount of the outstanding Securities of the applicable
series (as opposed to 10% in principal amount of the outstanding Securities in
the Prior Indenture); and a default under Senior Debt constitutes an Event of
Default in the Prior Indenture, but not in the Indenture. The Company intends to
exchange Securities issued under the Indenture for the comparable Securities
issued under the Prior Indenture without any cost to the holders of Securities.
The Company expects that substantially all Securities issued under the Prior
Indenture will be cancelled in connection with this exchange. To the extent that
RediReserve Certificates issued under the Prior Indenture remain outstanding
after the exchange, RediReserve Certificates issued under the Prior Indenture
would be paid as interest on such RediReserve Certificates pursuant to this
Prospectus and the Registration Statement.
4
<PAGE> 6
HIGHLIGHTS OF TERMS OF SECURITIES OFFERED
<TABLE>
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REDIRESERVE
VARIABLE RATE
CERTIFICATES
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Denomination of Initial Minimum initial purchase: $1,000 or any amount in excess thereof;
Purchase and Additional additional purchases in any amount.
Purchases
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Annual Interest Interest rate on all outstanding Certificates may vary from week to
week. The rate will be set each week by the Company, to be at least the
average rate on Thirteen Week U.S. Treasury Bills over the preceding
eight weeks, less one percent. No interest will be paid for any day on
which the principal balance in an account is below the minimum balance
(currently $1,000).
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Payment of Interest Quarterly, on each March 31, June 30, September 30 and December 31,
accrued interest is added to the principal in each account in the form
of additional RediReserve Certificates. Except as otherwise provided
herein, no checks will be issued in payment of interest.
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Redemption by Holder Redeemable by holder upon oral or written demand, or by draft.
Redemption must be at least $250 except for redemption to close an
account.
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Redemption by Company Redeemable on 30 days' notice.
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Form Book-entry and non-negotiable.
(A statement will be issued, not a promissory note).
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Automatic Extension Not applicable (no fixed maturity).
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<CAPTION>
<S> <C>
91 DAY, SIX, EIGHTEEN AND THIRTY
MONTH, AND ONE, TWO, THREE, FOUR, FIVE,
SEVEN AND TEN YEAR NOTES
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Denomination of Initial Minimum purchase: $5,000 or other amount as specified by the
Purchase and Additional Company.
Purchases
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Annual Interest Fixed by the Company based on market conditions and the Company's
financial requirements. Once determined, the rate on each Note
remains fixed until its maturity, but may change if the Note is
extended and will be set forth in a supplement hereto.
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Payment of Interest On Notes with maturities of 91 days or six months, interest is
compounded daily and paid at maturity. On all other Notes, at the
election of the holder, interest is compounded daily and paid at
maturity or may be paid monthly, quarterly, semi-annually or
annually.
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Redemption by Holder May be redeemed by the original holder after total permanent
disability or by his estate after death, at the principal amount
plus accrued interest. Otherwise, there is no right of the holder
to cause redemption prior to maturity. For a statement of the
terms on which the Company, in its sole discretion, may
repurchase the Notes, see "Description of
Securities -- Provisions Relating to Notes."
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Redemption by Company Not redeemable until maturity.
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Form Book-entry and non-negotiable.
(A statement will be issued, not a promissory note).
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Automatic Extension If the Company does not request redemption at least seven
Business Days prior to maturity or if not redeemed by holder
within seven Business Days after its maturity date, then a Note
with a principal amount of $2,500 or more will be extended
automatically for a period equal to the original term. A Note
with a principal amount that is less than $2,500 at maturity will
automatically be redeemed. Notes are extended at the rate being
offered on newly-issued Notes of like tenor, term and
denomination at their respective maturity dates. If similar Notes
are not then being offered, absent instructions from the
Noteholder selecting a Note with a term currently being offered,
the maturing Note will be redeemed.
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</TABLE>
The Securities are unsecured obligations of the Company. The Company is not
subject to state or federal regulation applicable to banks and savings and loan
associations with regard to insurance, the maintenance of reserves, or the
quality or condition of its assets or other matters. It is not expected that
there will be a trading market for the Notes, see "Description of
Securities -- Provisions Relating to the Notes -- Liquidity."
The Securities are not insured or guaranteed by any bank subsidiary of the
Company or any other public or private entity.
5
<PAGE> 7
RISK FACTORS
Investors in the Securities offered hereby should consider the following
factors:
Absence of Insurance and Guarantees. The Securities are not insured by any
governmental or other entity such as the FDIC as are bank, savings and loan or
credit union accounts, and they are not guaranteed by any public or private
entity. In these respects, the Company is similar to most other commercial
enterprises (including bank holding companies) which sell debt securities to
public investors, but is dissimilar to most banking or savings institutions.
Limited Availability of Bank and Insurance Company Assets; Impact on
Liquidity. Banking regulations limit the amount of dividends that a bank may
pay. Further, because of regulatory considerations, Colonial National Bank USA
and Advanta National Bank (the "Banks"), which are subsidiaries of the Company,
do not intend to make loans to the Company. In addition, Arizona insurance
regulations restrict the amount of dividends which an insurance company may
distribute without the prior consent of the Director of Insurance.
The limited availability to the Company of dividends from its subsidiaries
impacts the Company's liquidity. While the Company was paid substantial
dividends by its subsidiaries in 1994 and such dividends are expected to remain
significant, for the reasons described above, dividends from the Banks and the
Company's insurance subsidiaries are not expected, for the foreseeable future,
to be the Company's major source of liquidity in satisfying its obligations to
creditors or in providing a source of dividend payments to stockholders. At June
30, 1995, approximately $67 million were available from the Company's
subsidiaries for the payment of dividends and other distributions to the Company
without prior regulatory approval.
Risks Associated with Maintaining Portfolios of Credit Card Receivables and
Mortgage Loans. There are certain risks associated with maintaining portfolios
of credit card receivables and mortgage loans. The primary risks involve the
possibility of future economic downturns causing an increase in credit losses,
and interest rate fluctuations. These risks are inherent to every lender. The
Company believes its credit loss experience is generally comparable to industry
averages. With respect to interest rate fluctuations, the Company pursues a
disciplined interest rate risk management strategy, which includes computer
simulations of various scenarios, that it believes will enable it to readily
adjust to most market variations.
Regulation. The banking and finance businesses in general are the subject
of extensive regulation at both the state and federal levels. Numerous
legislative and regulatory proposals are advanced each year which, if adopted,
could adversely affect the Company's profitability or the manner in which the
Company conducts its activities. In addition, the outcome of pending litigation
against other credit card issuers concerning the legality of certain credit card
fees and charges may adversely impact the Company's business.
Competition. As a marketer of credit products, the Company faces intense
competition from numerous providers of financial services. Although the Company
believes it is generally competitive, there can be no assurance that its ability
to market its services successfully or to obtain adequate yields on its loans
will not be impacted by the nature of the competition that now exists or may
develop.
Limited Events of Default; Absence of Provisions Relating to Highly
Leveraged Transactions or a Change in Control. The Indenture contains only
limited events of default other than default in the timely payment of principal
or interest. See "Description of Securities -- Provisions Relating to All
Securities -- Events of Default." Neither the Indenture nor the Prior Indenture
contain any covenants or other provisions to afford protection to holders of
Securities in the event of a highly leveraged transaction or a change in the
control of the Company.
6
<PAGE> 8
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- --------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges*................ 2.32 2.84 2.71 2.52 1.81 1.36 1.20
</TABLE>
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* Fixed charges represent interest plus one-third of all rentals.
PLAN OF DISTRIBUTION
The Securities will be sold by the Company directly without an underwriter
or selling agent. The Securities will be sold by employees of the Company who,
pursuant to Rule 3a4-1(a) promulgated under the Exchange Act, are deemed not to
be brokers. In accordance with certain provisions of Rule 3a4-1(a), such
employees are not compensated by commission, are not associated with any broker
or dealer and limit their activities so that, among other things, they do not
engage in oral solicitations of, and comply with certain specified limitations
when responding to inquiries from, potential purchasers.
The Company may vary the terms and conditions of the offer by state,
locality or as otherwise described under "Description of
Securities -- Provisions Relating to All Securities -- Additional Interest" and
"-- Variations in Terms and Conditions" in this Prospectus. Further, the Company
may offer different Securities at different times depending on such factors as
the Company's liquidity requirements, the interest rate environment and other
economic conditions.
USE OF PROCEEDS
The net proceeds to the Company from the sale of Securities will be used
for general corporate purposes, including the purchase of assets from,
investments in and extensions of credit to, subsidiaries and affiliates of the
Company which will use the proceeds for general corporate purposes; and,
possibly, for financing future acquisitions by the Company, including without
limitation, acquisitions of credit card, mortgage and equipment lease
portfolios. At the date hereof, no specific proposed acquisitions have been
identified as probable. Proceeds may also be used to invest in income-producing
securities and other assets. The amount of Securities offered from time to time
and the precise amounts and timing of the applications of such proceeds will
depend upon funding requirements of the Company and its subsidiaries and
affiliates.
In view of its anticipated requirements, the Company expects to engage on a
recurring basis in additional private or public financing of a character and
amount to be determined as the need arises.
DESCRIPTION OF SECURITIES
GENERAL
This offering relates to the RediReserve Certificates and the Notes. The
Notes have maturities of 91 Day months, six months, one year, 18 months, two
years, 30 months, or three, four, five, seven or ten years after their
respective dates of issue. The Securities are to be issued under a Trust
Indenture (the "Indenture") to be entered into between the Company and Mellon
Bank, N.A., a national banking association, as trustee (the "Trustee"). A copy
of the Indenture is filed as an exhibit to the Registration Statement of which
this Prospectus is a part. The following statements are brief summaries of
certain provisions of the Indenture, and are subject to the detailed provisions
of the Indenture, to which
7
<PAGE> 9
reference is hereby made for a complete statement of such provisions. Whenever
particular provisions of the Indenture or terms defined therein are referred to
herein, such provisions or definitions are incorporated by reference as part of
the statements made herein and the statements are qualified in their entirety by
such reference. Parenthetical Section and Article references appearing below are
to the Indenture. As described above under "Summary of the Offering -- Trustee
and Indenture," in limited circumstances RediReserve Certificates issued under
the Prior Indenture may be issued pursuant to this Prospectus and the
Registration Statement.
The Indenture may be modified as set forth below. Additionally, the Company
has reserved the right to terminate this offering, or modify the terms of the
offering or the Securities, at any time, by an appropriate amendment to this
Prospectus, but no such modification will affect the rights of the holders of
then outstanding Securities, except that, at the Company's election: (i) the
principal amount required to be maintained in an existing RediReserve
Certificate account may be increased (after 30 days' notice) or decreased; (ii)
the minimum amount of any withdrawal from a RediReserve Certificate account may
be increased (after 30 days' notice) or decreased; and (iii) certain service
charges may be imposed or modified as described under "Description of
Securities -- Provisions Relating to all Securities."
The Securities are not secured by any collateral or lien. There are no
provisions for a sinking fund.
PROVISIONS RELATING TO REDIRESERVE CERTIFICATES
Form; Non-negotiability and Statements: RediReserve Certificates are not
negotiable and are not evidenced by any promissory note issued to the holder. A
statement evidencing ownership of a RediReserve Certificate will be issued to
each purchaser of a RediReserve Certificate, but such statement is not a
negotiable instrument, and no rights of ownership in a RediReserve Certificate
can be transferred by mere endorsement and delivery of such a statement to a
purchaser. Each holder of a RediReserve Certificate will receive, at the end of
the month after each investment, withdrawal and interest payment, a statement
indicating any transactions in such holder's RediReserve Certificate account.
The Company maintains a register to record the owner of each outstanding
RediReserve Certificate, and may treat the person whose name is so recorded as
the owner of such RediReserve Certificate for all purposes. Ownership of a
RediReserve Certificate may be transferred on the register only by written
notice to the Company signed by the holder or his duly authorized representative
on a form to be supplied by the Company. (Article Three)
Denomination and Minimum Purchase: As of the date of this Prospectus, the
minimum initial purchase of a RediReserve Certificate is $1,000 and additional
purchases may be in any amount. From time to time, the Company may set other
minimum purchase amounts and minimum balance requirements (as described below)
for RediReserve Certificates.
Interest on RediReserve Certificate Accounts: The interest rate on all
outstanding RediReserve Certificates will be set by the Company each Tuesday (or
such other day as the Company may determine from time to time by Company Order)
and the interest rate paid on each outstanding RediReserve Certificate may vary
from week to week. As long as a holder maintains the applicable minimum balance
in his RediReserve Certificate account, the weekly rate, at a minimum, will be
1% below the average rate on Thirteen Week U.S. Treasury Bills for the preceding
eight weekly auctions. While the foregoing is the minimum at which the weekly
rate will be fixed, the actual rate may be above the minimum. Investors may
inquire concerning the rate then being paid on outstanding RediReserve
Certificates by writing or telephoning the Company.
Interest on each RediReserve Certificate account with a balance above the
minimum required (currently $1,000) accrues daily and is compounded quarterly on
March 31, June 30, September 30 and December 31 of each year. Interest accrued
during each quarterly period will not be paid by check, but rather will be added
to the principal balance of each holder's RediReserve Certificate account in
8
<PAGE> 10
the form of additional RediReserve Certificates. Interest accrues on the
principal balance of each RediReserve Certificate through the date of
redemption. If a holder redeems in full all RediReserve Certificates held by
him, the Company will pay all accrued interest by check as soon as practicable
after redemption.
Minimum Balance Requirement for RediReserve Certificate Accounts: No
interest shall be paid on any day the principal amount in a holder's RediReserve
Certificate account is less than the amount which may be designated from time to
time by the Company ($1,000 at the date of this Prospectus). The Company has the
right to increase or decrease the minimum principal amount which must be
maintained in a RediReserve Certificate account and such an increase or decrease
may be applied, at the Company's election, to RediReserve Certificates
outstanding as of the date of the increase or decrease as well as RediReserve
Certificates issued after such increase or decrease. The Company must give
holders of RediReserve Certificates at least 30 days advance written notice if
the Company elects to increase the minimum principal amount which must be
maintained in their RediReserve Certificate accounts.
Redemption at the Holder's Election: RediReserve Certificates may be
redeemed at any time in minimum amounts of $250 (or any amount if closing an
account), and will be paid in full upon demand by the holder, which demand is
received by the Company at its principal place of business or such other places
as may be designated by it for such purpose. The Company may delay redemption of
a newly purchased RediReserve Certificate for such time as may be necessary to
assure that it has received the full purchase price of such RediReserve
Certificate -- for example, until a check given to it in payment for the
RediReserve Certificate is collected.
The minimum amount for redemptions may be increased (after 30 days' notice)
or decreased by the Company from time to time.
Redemption by Draft: A holder may elect to make redemptions by draft
payable to the order of any payee in any amount of $250 or more. At the request
of a holder, the Company will provide drafts drawn on it that will be payable
through one of its subsidiary banks, or a successor bank. All authorized signers
on a RediReserve Certificate account must submit specimen signatures on a
signature card provided by the Company and must agree to abide by the Company's
rules and regulations pertaining to such accounts. As with regular bank checks,
certain banks may not provide cash at the time of deposit, but will wait until
they have received payment from the subsidiary bank. When a draft is presented
to the subsidiary bank for payment, the subsidiary bank, as agent of the holder,
will cause the Company to redeem a sufficient amount from the holder's
RediReserve Certificate account to cover the amount of the draft. Interest
continues to accrue on a RediReserve Certificate account until a draft is
presented to the subsidiary bank for payment. The subsidiary bank will return a
draft if the amount of collected funds in the holder's RediReserve Certificate
account is insufficient to cover the draft or if the signature(s) on the draft
is (are) not, in the judgment of the Company, the same as the specimen
signature(s) previously submitted to the Company. The Company reserves the right
to charge a fee for the dishonor of a draft or for a stop payment order.
Neither the Company nor the subsidiary bank will return canceled drafts to
the holders of RediReserve Certificate accounts, although the Company will, upon
request, provide a holder with copies of drafts designated by the holder upon
payment of a service charge. Holders of RediReserve Certificate accounts will
receive statements as described under "Form; Non-negotiability and Statements"
above, which will reflect draft transactions.
Redemption at the Company's Election: The Company may, at its election,
redeem RediReserve Certificates either as a whole or from time to time in part,
upon not less than 30 days' written notice to the holder, at the principal
amount thereof without premium, plus interest accrued to the date of redemption.
Accrued interest on RediReserve Certificates so redeemed will be paid as soon as
practicable.
9
<PAGE> 11
PROVISIONS RELATING TO NOTES
Form and Denominations: The Notes shall be uncertificated and evidenced by
book entry and a statement issued to each purchaser.
Statements issued by the Company are not negotiable instruments, and no
rights of ownership can be transferred by mere endorsement and delivery of a
statement. Ownership of a Note may be transferred on the Company register only
by written notice to the Company signed by the owner(s) or such owner's duly
authorized representative on a form to be supplied by the Company. (Section
3.05) The Notes may not be pledged, assigned or hypothecated (as collateral for
a loan or otherwise). The Notes may be purchased in minimum denominations to be
determined, from time to time, by the Company. Separate purchases may not be
accumulated to satisfy the minimum denomination requirements.
Interest: The interest rates payable on the Notes will be fixed by the
Company from time to time based on market conditions and the Company's financial
requirements. Once determined, the rate of interest payable on a Note will
remain fixed on such Note until it matures or is redeemed by the Noteholder.
Interest on 91 Day and Six Month Notes compounds daily and is paid only at
maturity. While interest on 18 Month, Two Year, 30 Month, and Three, Four, Five,
Seven and Ten Year Notes compounds daily, holders may elect to have interest
paid monthly, quarterly, semiannually, annually, or paid at maturity. This
election may be changed one time by the holder during the term of the Note.
Interest on One Year Notes compounds daily and holders may elect to have
interest paid monthly, quarterly, semiannually or at maturity. This election may
not be changed during the term of a One Year Note.
Automatic Extension: If the Company does not request redemption of a Note
at least seven Business Days prior to maturity, or if a Note is not redeemed or
converted to another term by the Noteholder within seven Business Days after
maturity, a Note with a principal amount of $2,500 or more will be extended
automatically for a period equal to the original term. As used herein, "Business
Day" means any day that is not a Saturday, a Sunday or a day on which banking
institutions or trust companies in the State of Delaware or the Commonwealth of
Pennsylvania are not authorized or obligated to be open. If a Note is renewed as
described above, such Note will continue in all its provisions, including
provisions relating to payment, except that the interest rate payable during any
renewed term shall be the interest rate which is being offered by the Company on
similar Notes as of the renewal date. If similar Notes are not then being
offered, the Note will not renew, and, absent instructions from the Noteholder
selecting a Note with a term that is currently being offered, the maturing Note
will be redeemed. The Company will give each Noteholder notice at least seven
days prior to maturity reminding him of the maturity. If the Company gives
notice to a Noteholder of the Company's desire to redeem a Note at maturity, no
interest will accrue after the date of maturity. Likewise, if a Noteholder
submits a written request for redemption within seven days after its maturity
date, no interest will accrue after the date of maturity. A Note with a
principal amount that is less than $2,500 at maturity will be redeemed
automatically.
No Redemption by the Company: The Company has no right to redeem a Note
and the holder has no right to require the Company to redeem any such Note prior
to its maturity date as originally stated or as it may be extended, except as
indicated below.
Redemption by the Holder on Death or Disability: A Note may be redeemed at
the election of the original owner (if he is still the holder) following his
total permanent disability, or at the election of his estate following his
death, as established to the satisfaction of the Company. The redemption price,
in the event of such a death or disability, is the principal amount of the Note,
plus interest accrued and not previously paid, to the date of redemption. If two
or more persons are joint record owners of a Note, the election to redeem will
not apply until both record owners are either deceased or disabled,
10
<PAGE> 12
except that, if the joint owners are husband and wife, the election may be made
after the death or total permanent disability of either spouse.
The Company may modify the foregoing policy on redemption after death or
disability. However, no such modification will affect the right of redemption
applicable to any Note which was purchased at a time when the then current
prospectus of the Company stated the Company's policy to redeem as indicated in
the preceding paragraph.
Liquidity: It is not expected that there will be a trading market for the
Notes. Although Noteholders have no contractual right to redeem a Note prior to
maturity, the Company, in its sole discretion, may honor a written request for
early redemption. Should the Company elect to do so, the Company will impose a
penalty that is the higher of (a) 91 days' compound interest at the actual rate
of interest borne by the Note, plus an amount equal to the difference, if any,
between the interest earned on the Note, at the rate and on the terms stated
therein, and the interest that would have been earned on the Note at a rate of
5%, if 5% is lower than the rate borne by the Note; or (b) the rate currently
being offered by the Company (as of the redemption date) on a Note of the same
term as the Note being redeemed, less the actual interest rate borne by the Note
being redeemed, multiplied by the remaining term of the Note being redeemed on a
365 day basis. Under either calculation method, early redemption may result in a
loss of principal.
PROVISIONS RELATING TO ALL SECURITIES
Interest Accrual Date: Interest on the Securities accrues from the date of
purchase which is deemed to be the date the Company receives funds which are
received prior to 3:00 p.m. on a business day or the next business day if the
Company receives such funds on a non-business day or after 3:00 p.m. on a
business day. For this purpose, the Company's business days will be deemed to be
Monday through Friday, except for Pennsylvania legal holidays.
Interest Withholding: With respect to those investors who do not provide
the Company with a fully executed Form W-9, the Company will withhold 31% of any
interest paid.
Additional Interest: In addition to the interest rates payable as set
forth above, the Company may make such additional payments of interest, premiums
or other benefits ("Additional Interest") on such of the Securities, in such
amounts, in such form, on such terms and at such times as shall be determined
from time to time by the Company. Such Additional Interest payments may be
modified or discontinued at any time. For example, such Additional Interest
payments may be limited to new investors, or to current investors increasing or
renewing their investments in the Securities. Also, such Additional Interest
payments may be limited to current or new investors residing in one or more
states or localities where the Company is authorized to sell the Securities.
Aggregate Indebtedness: The amount of indebtedness which may be
outstanding under the Indenture at any one time is unlimited. There also is no
limitation on the respective amounts of each class of Securities which may be
outstanding at any one time.
Modification of Indenture: The Indenture may be modified by the Company
and the Trustee at any time or times with the consent of the holders of not less
than a majority in principal amount of the Securities then outstanding, but no
modification of the Indenture may be made which will affect the terms of payment
or the principal of any Security, without consent of the holder thereof, or
reduce the percentage of holders of Securities whose consent to modification is
required. The Company and the Trustee may enter into supplemental indentures
adding covenants or agreements of the Company for the protection of the holders
of Securities, or clarifying any ambiguity or correcting any defect in the
Indenture, consistent with its terms, or modifying provisions of the Indenture
provided that such modifications do not have a material adverse effect on the
interest of holders of outstanding Securities, without action by the holders of
Securities. (Article Nine)
Place and Method of Payment: Principal and interest upon the Securities
will be payable at the principal executive office of the Company, as it may be
established from time to time, or at such other
11
<PAGE> 13
place as the Company may designate for that purpose; provided, however, that
payments may be made at the option of the Company by check mailed to the person
entitled thereto at his address appearing in the register which the Company
maintains for that purpose. (Sections 307 and 1002)
Events of Default: An Event of Default is defined in the Indenture as
being any of the following: (i) default in payment of principal on any of the
Securities under the Indenture which has not been cured; (ii) a default for 30
days in payment of any installment of interest on a Security; or (iii) certain
events of bankruptcy, insolvency or reorganization or default in the performance
or breach of any covenant or warranty of the Company in the Indenture and
continuance of such default in performance or breach for a period of 60 days
after notice of such default has been received by the Company from the Trustee
or from the holders of 25% in principal amount of the outstanding Securities.
The Company is required to file annually with the Trustee an officer's
certificate as to the absence of certain defaults under the terms of the
Indenture. The Indenture provides that the holders of a majority in aggregate
principal amount of the applicable Securities at the time outstanding may, on
behalf of all holders, waive any past default except in payment of principal or
interest on the Securities and certain other specified covenants or provisions.
(Article Five)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing, the Trustee
is under no obligation to exercise any of its rights or powers under the
Indenture at the request, order or direction of any of the holders of
Securities, unless such holders of Securities shall have offered to the Trustee
reasonable indemnity. (Section 601) Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in principal amount of
the Securities at the time outstanding have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
subject to specified limitations, or exercising any power conferred on the
Trustee. The Indenture contains certain limitations on the right of an
individual holders of Securities to institute legal proceedings in the event of
the Company's default. (Sections 507 and 512)
Certain Covenants: The Company has entered into certain covenants
including that it will not consolidate or merge with or into any other
corporation, unless the other corporation expressly assumes the obligations of
the Company under the Indenture. (Article Eight) The Indenture contains no
covenants or other provisions to afford protection to holders of Securities in
the event of a highly leveraged transaction or a change in the control of the
Company.
Concerning the Trustee: The Trustee may resign at any time, may be removed
by the holders of a majority of the principal amount of applicable outstanding
Securities, or upon the occurrence of certain contingencies (relating generally
to the insolvency of the Trustee or the Trustee's ineligibility to serve as such
under the Trust Indenture Act of 1939, as amended), may be removed by the
Company or by a court of competent jurisdiction upon petition of a holder of
Securities, but no such resignation or removal of the Trustee may become
effective until a successor Trustee has accepted the appointment as provided in
the Indenture. (Sections 607 and 608) The Company and its subsidiaries reserve
the right to enter into banking relationships with the Trustee and its
subsidiaries. CoreStates is also the trustee under the Prior Indenture. In the
event that a default arises under the Indenture or the Prior Indenture while
Securities remain outstanding under both such Indentures, CoreStates may be
obligated to resign as trustee under one of the Indentures.
Satisfaction and Discharge of Indenture: The Indenture may be discharged
upon the payment of all RediReserve Certificates and Notes outstanding
thereunder or upon deposit in trust of funds sufficient therefor, plus
compliance with certain formal procedures. (Article Four)
Reports: The Company publishes annual reports containing audited financial
statements and quarterly reports containing unaudited financial information for
the first three quarters of each fiscal year. Copies of such reports will be
sent to any holder of Securities upon oral or written request.
Service Charges: The Company reserves the right to assess service charges
for services such as changing the registration of any Security when such change
is occasioned by a change in name of the
12
<PAGE> 14
holder, or a transfer (whether by operation of law or otherwise) of the Security
by the holder to another person.
The Company also reserves the right, upon 30 days' written notice to the
holder, to increase service charges currently imposed in connection with
redemptions by draft from RediReserve Certificate accounts and assess service
charges for: (i) a holder making more than a specified number of redemptions in
a specified period from a RediReserve Certificate account; and (ii) for certain
other services provided with respect to RediReserve Certificate accounts.
Additional Securities: The Company may offer from time to time, pursuant
to the Indenture, additional classes of securities with terms and conditions
different from the Securities offered hereby, (except that no such security
issued under the Indenture may be senior to the Securities offered hereby). The
Company will supplement this Prospectus if and when it decides to offer to the
public any additional class of Security.
Variations in Terms and Conditions: The Company reserves the right from
time to time to offer different Securities and to vary the terms and conditions
of the offer (including, but not limited to, minimum balance requirements for
RediReserve Certificates and minimum denominations, additional interest payments
and service charges for all Securities) depending upon the state or locality
where the purchaser resides, the purchaser's tenure as an investor with the
Company or whether an investor is increasing or renewing his/her investment in
the Company's securities. In addition, the Company may vary certain terms and
conditions of the RediReserve account and/or Notes for its employees and the
employees of its subsidiaries.
Compliance with Rule 14e-1:. Any purchase of Securities by the Company
will be accomplished in compliance with Section 14(e) of the Exchange Act and
Rule 14e-1 promulgated thereunder, if applicable.
LEGAL OPINION
Certain legal matters relating to the Securities offered hereby will be
passed upon for the Company by Gene S. Schneyer, Esquire, Vice President,
Secretary and General Counsel of the Company. Mr. Schneyer owns or has the right
to acquire a number of shares of Class A and Class B Common Stock of the Company
which is well below 1% of the outstanding common stock of the Company.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the registration statement to the
extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accounts, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said reports.
13
<PAGE> 15
(LOGO)PRINTED ON RECYCLED PAPER
-----------------------------------------
LOGO
Corp.
-----------------------------------------
PROSPECTUS
THE DATE OF THIS PROSPECTUS IS
OCTOBER , 1995
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
3.1 Restated Certificate of Incorporation of the Registrant (incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form S-3 (File No. 33-53475), filed June 19, 1994).
3.2 By-Laws of the Registrant, as amended (incorporated by reference to Exhibit 3.11 to
the Registrant's Current Report on Form 8-K dated December 22, 1994, filed the same
date).
4.1 Form of Trust Indenture between Registrant and Mellon Bank, N.A., as Trustee
(previously filed).
5 Opinion and Consent of Gene S. Schneyer, Vice President, Secretary and General Counsel
(previously filed).
12 Computation of Ratio of Earnings to Fixed Charges (filed herewith).
23.1 Consent of independent public accountants (previously filed).
23.2 Consent of Gene S. Schneyer, Vice President, Secretary and General Counsel (included
in Exhibit 5 as previously filed).
24 Powers of Attorney (included on Signature Pages as previously filed).
25 Form T-1, Statement of Eligibility and Qualification Under the Trust Indenture Act of
1933 of a Corporation Designated to Act as Trustee (filed herewith).
</TABLE>
I-1
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Horsham Township, Montgomery County,
Commonwealth of Pennsylvania, on October 18, 1995.
ADVANTA CORP.
By: /s/ DAVID D. WESSELINK
-----------------------------------
David D. Wesselink, Senior Vice
President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE DATE
- --------------------------------------------- --------------------
<S> <C>
/s/ DENNIS A. ALTER* October 18, 1995
- ---------------------------------------------
Dennis Alter
Chairman of the Board and Director
/s/ ALEX W. HART* October 18, 1995
- ---------------------------------------------
Alex W. Hart
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ RICHARD A. GREENAWALT* October 18, 1995
- ---------------------------------------------
Richard A. Greenawalt
President, Chief Operating
Officer and Director
/s/ DAVID D. WESSELINK October 18, 1995
- ---------------------------------------------
David D. Wesselink
Senior Vice President and Chief Financial
Officer (Principal Financial Officer)
/s/ JOHN J. CALAMARI* October 18, 1995
- ---------------------------------------------
John J. Calamari
Vice President, Finance, and Chief Accounting
Officer (Principal Accounting Officer)
/s/ ARTHUR P. BELLIS* October 18, 1995
- ---------------------------------------------
Arthur P. Bellis, Director
/s/ MAX BOTEL* October 18, 1995
- ---------------------------------------------
Max Botel, Director
/s/ RICHARD J. BRAEMER* October 18, 1995
- ---------------------------------------------
Richard J. Braemer, Director
</TABLE>
I-2
<PAGE> 18
<TABLE>
<CAPTION>
SIGNATURE DATE
- --------------------------------------------- --------------------
<S> <C>
/s/ ANTHONY P. BRENNER* October 18, 1995
- ---------------------------------------------
Anthony P. Brenner, Director
/s/ WILLIAM C. DUNKELBERG* October 18, 1995
- ---------------------------------------------
William C. Dunkelberg, Director
/s/ ROBERT C. HALL* October 18, 1995
- ---------------------------------------------
Robert C. Hall, Director
/s/ WARREN KANTOR* October 18, 1995
- ---------------------------------------------
Warren Kantor, Director
- ---------------------------------------------
Ronald J. Naples, Director
/s/ PHILLIP A. TURBERG* October 18, 1995
- ---------------------------------------------
Phillip A. Turberg, Director
- ---------------------------------------------
James E. Ksansnak, Director
</TABLE>
*By: /s/ DAVID D. WESSELINK
------------------------------------------------------
Attorney-in-Fact
Pursuant to powers of attorney
previously filed as part of
this Registration Statement.
I-3
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
ITEM
- --------
<S> <C>
3.1 Restated Certificate of Incorporation of the Registrant (incorporated by reference
to Exhibit 4.1 to pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form S-3 (File No. 33-53475), filed June 19, 1994).
3.2 By-Laws of the Registrant, as amended (incorporated by reference to Exhibit 3.11 to
the Registrant's Current Report on Form 8-K dated December 22, 1994, filed the same
date).
4.1 Form of Trust Indenture between Registrant and Mellon Bank, N.A., as Trustee
(previously filed).
5 Opinion and Consent of Gene S. Schneyer, Vice President, Secretary and General
Counsel (previously filed).
12 Computation of Ratio of Earnings to Fixed Charges (filed herewith).
23.1 Consent of independent public accountants (previously filed).
23.2 Consent of Gene S. Schneyer, Secretary and General Counsel (included in Exhibit 5
as previously filed).
24 Powers of Attorney (included on signature page as previously filed).
25 Form T-1, Statement of Eligibility and Qualification Under the Trust Indenture Act
of 1933 of a Corporation Designated to Act as Trustee (filed herewith).
</TABLE>
<PAGE> 1
<PAGE> 1
Exhibit 12.1
Advanta Corp.
and Subsidiaries
Statements setting forth details of computation of ratio
of earnings to fixed charges and preferred dividends
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months
Ended
September 30, Year Ended December 31,
--------------- --------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net earnings before extraordinary items... $ 99,097 $ 77,448 $106,063 $ 77,920 $ 48,037 $ 25,165 $ 15,095
Federal and state income taxes............ 55,019 44,384 59,144 45,335 29,063 14,154 7,435
-------- -------- -------- -------- -------- -------- --------
Earnings before income taxes and
extraordinary items..................... 154,116 121,832 165,207 123,255 77,100 39,319 22,530
-------- -------- -------- -------- -------- -------- --------
Fixed charges:
Interest................................ 115,203 64,954 94,758 79,303 93,545 109,139 112,636
One-Third of all rentals................ 1,170 1,341 1,809 1,591 1,252 1,103 1,031
-------- -------- -------- -------- -------- -------- --------
Total fixed charges....................... 116,373 66,295 96,567 80,894 94,797 101,242 113,667
-------- -------- -------- -------- -------- -------- --------
Earnings before income taxes
extraordinary item and fixed charges... $270,489 $188,127 $261,774 $204,149 $171,897 $149,561 $136,197
-------- -------- -------- -------- -------- -------- --------
Ratio of earnings to fixed charges...... 2.32x 2.84x 2.71x 2.52x 1.91x 1.36x 1.20x
</TABLE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
-----------------------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
-----------------------
Check if an application to determine eligibility of
a Trustee pursuant to Section 305(b)(2) /X/
MELLON BANK, N.A.
(Name of Trustee)
25-0659306 U.S.
(I.R.S. Employer Identification No.) (Jurisdiction of incorporation)
One Mellon Bank Center
Pittsburgh, PA 15258-0001
(Address of Principal Executive Office)
BRIDGET M. SCHESSLER
Vice President
MELLON BANK, N.A.
ONE MELLON BANK CENTER
PITTSBURGH, PENNSYLVANIA 15258-0001
(412) 234-0139
(Name, Address and Telephone Number of Agent for Service)
-----------------------
ADVANTA CORP.
(Name of Obligor)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
23-1462070
(I.R.S. Employer Identification No.)
BRANDYWINE CORPORATE CENTER, 650 NAAMANS ROAD, CLAYMONT, DE 19703
(Address of Principal Executive Offices)
REDIRESERVE VARIABLE RATE CERTIFICATES, NOTES
(Title of Indenture Securities)
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE --
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of Cleveland Cleveland, Ohio
Federal Deposit Insurance Corporation Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEMS 3-15 ARE NOT APPLICABLE SINCE THE OBLIGOR IS NOT IN DEFAULT ON SECURITIES
ISSUED UNDER INDENTURES UNDER WHICH THE APPLICANT IS TRUSTEE.
16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
Exhibit 1 - Copy of articles of association of the
trustee as now in effect, filed as
Exhibit 1 to trustee's statement of
eligibility and qualification,
Registration No. 33-46990, and
incorporated herein by reference.
Exhibit 2 - Copy of certificate of the authority of
the trustee to commence business, copy of
certificate of consolidation with the
Union Trust Company of Pittsburgh and
copy of certificate approving merger of
Mellon National Bank and Trust Company
into Mellon Bank, N.A. filed as Exhibit
T1A(b) to trustee's statement of
eligibility and qualification,
Registration No. 33-13020, and
incorporated herein by reference.
Exhibit 3 - Copy of certificate as to authority of
the trustee to exercise corporate trust
powers, filed as Exhibit T1A(c) to
trustee's statement of eligibility and
qualification, Registration No.
33-13020, and incorporated herein by
reference.
Exhibit 4 - Copy of existing by-laws of the trustee,
filed as Exhibit 4 to trustee's statement
of eligibility and qualification,
Registration No. 33-46990, and
incorporated herein by reference.
Exhibit 5 - Copy of each indenture referred to in
Item 4, if the obligor is in default.
Not Applicable.
Exhibit 6 - Consent of the trustee required by
Section 321(b) of the Act, filed as
Exhibit T1D to trustee's statement of
eligibility and qualification,
Registration No. 33-13020, and
incorporated herein by reference.
Exhibit 7 - Copy of the latest report of condition of
the trustee transmitted electronically
pursuant to law or the requirements of
its supervising or examining authority.
1
<PAGE> 3
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, MELLON BANK, N.A., A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF PITTSBURGH, AND COMMONWEALTH OF
PENNSYLVANIA, ON THE 13TH DAY OF OCTOBER, 1995.
MELLON BANK, N.A.
TRUSTEE
By: Bridget M. Schessler
---------------------------
Bridget M. Schessler
Vice President
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF
MELLON BANK, N.A.
FOR JUNE 30, 1995
IN THE COMMONWEALTH OF PENNSYLVANIA, AT THE CLOSE OF BUSINESS ON JUNE
30, 1995; TRANSMITTED ELECTRONICALLY IN RESPONSE TO CALL MADE BY COMPTROLLER OF
THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161.
CHARTER NO. 6301 NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
(in thousands)
<TABLE>
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . $ 2,064,905
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . 1,295,128
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . 2,916,066
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . 1,903,479
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375,564
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . . $ 22,945,571
LESS: Allowance for loan and lease losses . . . . . . . . . 392,872
Loans and leases, net of unearned income, allowance, and reserve . . . . . . 22,552,699
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . 503,092
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . 462,332
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,075
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . 248,411
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849,113
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,339,251
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,577,115
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,895,046
Noninterest-bearing . . . . . . . . . . . . . . . . . . 5,174,886
Interest-bearing . . . . . . . . . . . . . . . . . . . . 14,720,160
In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . . 3,474,360
Noninterest-bearing . . . . . . . . . . . . . . . . . . 12,639
Interest-bearing . . . . . . . . . . . . . . . . . . . . 3,461,721
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . 3,549,011
Securities sold under agreements to repurchase . . . . . . . . . . . . . . . 306,661
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . 800,000
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,684
Other borrowed money:
With original maturity of one year or less . . . . . . . . . . . . . . . . . 1,395,704
With original maturity of more than one year . . . . . . . . . . . . . . . . 287,098
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . 1,227
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . 248,411
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . 398,088
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627,366
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . 31,451,656
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,285
Surplus (exclude all surplus related to preferred stock) . . . . . . . . . . . . 1,027,567
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . 1,963,156
Net unrealized holding gains (losses) on available-for-sale securities . . . . . (25,447)
Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . (7,102)
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . 3,125,459
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL 34,577,115
</TABLE>
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I, Michael K. Hughey, Senior Vice President and Corporate Controller
of the above-named bank, do hereby declare that this Report of Condition is
true and correct to the best of my knowledge and belief.
Michael K. Hughey
August 8, 1995
We, the undersigned directors, attest to the correctness of this
Statement of Resources and Liabilities. We declare that it has been examined
by us, and to the best of our knowledge and belief has been prepared in
conformance with the instructions and is true and correct.
FRANK V. CAHOUET
W. KEITH SMITH
CHARLES A. CORRY
4
