<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 33-49763
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED AUGUST 27, 1993
$500,000,000
LOGO
TRANSAMERICA FINANCE CORPORATION
$300,000,000 6.80% SENIOR NOTES DUE MARCH 15, 1999
$200,000,000 7.50% SENIOR NOTES DUE MARCH 15, 2004
----------------
The 6.80% Senior Notes due March 15, 1999 (the "1999 Notes") and the 7.50%
Senior Notes due March 15, 2004 (the "2004 Notes" and together with the 1999
Notes, the "Notes") are not redeemable prior to maturity. Interest is payable
semi-annually on March 15 and September 15, commencing September 15, 1994. The
Notes will be represented, in part, by one or more global securities
(collectively, the "Global Note") registered in the name of a nominee of The
Depository Trust Company, as Depositary and, in part, by Notes in definitive
form. Interests in the Global Note will be shown on, and transfers thereof will
be effected only through, records maintained by the Depositary and its
participants. Except as described in "Description of the 1999 Notes and the
2004 Notes--Book-Entry System", owners of beneficial interests in the Global
Note will not be entitled to receive Notes in definitive form and will not be
considered the holders thereof. Settlement for the Notes will be made in
immediately available funds. So long as the Global Note is registered in the
name of the Depositary or its nominee, the Global Note will trade in the
Depositary's Same-Day Funds Settlement System and secondary market trading
activity in the Notes will therefore settle in immediately available funds. See
"Description of the 1999 Notes and the 2004 Notes--Same-Day Settlement and
Payment".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per 1999 Note................... 99.973% .500% 99.473%
Total........................... $299,919,000 $1,500,000 $298,419,000
Per 2004 Note................... 100% .600% 99.400%
Total........................... $200,000,000 $1,200,000 $198,800,000
</TABLE>
- --------
(1) Plus accrued interest from March 15, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company, estimated at $425,000.
----------------
The 1999 Notes and the 2004 Notes are offered severally by the Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Notes will be ready for delivery in New York, New York, or through the
facilities of The Depository Trust Company, on or about April 7, 1994, against
payment therefor in immediately available funds.
GOLDMAN, SACHS & CO. MORGAN STANLEY & CO.
INCORPORATED
----------------
The date of this Prospectus Supplement is March 30, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 1999 NOTES AND
THE 2004 NOTES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
S-2
<PAGE>
TRANSAMERICA FINANCE CORPORATION
Transamerica Finance Corporation (formerly Transamerica Finance Group, Inc.)
is principally engaged in consumer lending, commercial lending and leasing
operations. Unless the context indicates otherwise, the term "Company" as used
herein refers to Transamerica Finance Corporation and its subsidiaries.
The Company is a wholly owned subsidiary of Transamerica Corporation
("Transamerica"). Transamerica is a financial services organization which
engages through its subsidiaries in two primary businesses: finance and
insurance. Finance consists of consumer lending, commercial lending, leasing
and real estate services. Insurance comprises life insurance, asset management
and insurance brokerage. In addition to activities conducted through the
Company, Transamerica conducts, through other subsidiaries, certain of
Transamerica's commercial lending (insurance finance) and consumer lending
operations.
The following table sets forth information regarding each of the Company's
operations during the years ended December 31, 1993 and 1992.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
-------------------------
1993 1992
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
REVENUES:
Consumer lending.......... $ 651,218 $ 654,078
Commercial lending........ 333,297 356,275
Leasing................... 407,774 420,512
Other operations.......... (163) 18
---------- ----------
Total................... $1,392,126 $1,430,883
========== ==========
INCOME (LOSS) BEFORE EX-
TRAORDINARY ITEM:
Consumer lending.......... $ 91,742 $ 99,210
Commercial lending........ (12,775)(1) 17,938
Leasing................... 53,641 58,068
Other operations.......... 1,931 (888)
Amortization of goodwill.. (11,658) (11,656)
---------- ----------
Total................... $ 122,881 $ 162,672
========== ==========
ASSETS:
Consumer lending.......... $3,985,720 $3,846,327
Commercial lending........ 3,461,316 3,513,760
Leasing................... 1,696,983 1,339,751
Other operations.......... 143,321 110,386
Consolidation adjustment.. (255,970) (121,330)
---------- ----------
Total................... $9,031,370 $8,688,894
========== ==========
</TABLE>
- --------
(1) The 1993 loss was due primarily to the inclusion of a $35,960,000 after
tax provision to reduce the net carrying value of repossessed rent-to-own
stores to their estimated realizable value. Information received during
the year from prospective buyers of the repossessed rent-to-own stores
held for sale indicated that the realizable value of the business had
declined below its carrying value. The commercial lending 1993 results
also included an $8,799,000 after tax charge for the restructuring of the
commercial lending unit's infrastructure, a $4,224,000 after tax provision
for anticipated legal and other costs associated with the runoff of the
liquidating portfolios and a $4,224,000 tax benefit from the resolution of
prior years' tax matters.
S-3
<PAGE>
DESCRIPTION OF BUSINESS SEGMENTS
Set forth below is a description of each of the Company's business segments.
The Company operates its business segments through a variety of subsidiaries.
Because the Company is a holding company, the rights of its creditors,
including the holders of the 1999 Notes and the 2004 Notes, to participate in
the assets of any subsidiary upon the latter's liquidation or reorganization
will be subject to the claims of the subsidiary's creditors, which will take
priority except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
CONSUMER LENDING
The Company's consumer lending operations make both real estate secured and
unsecured loans to individuals through 561 branch lending offices located in
the United States (548 in 41 states), Canada (11) and the United Kingdom (2).
The Company's customers typically borrow to consolidate debt, finance home
remodeling, pay for their children's college educations, make major purchases,
take vacations, and for other personal uses.
The Company's consumer lending operations offer three principal loan
products: fixed rate real estate secured loans, revolving real estate secured
lines of credit and personal loans. The Company's primary business is making
fixed rate, home equity loans that generally range up to $200,000.
Approximately 83% of the outstanding finance receivables at December 31, 1993
were secured by residential properties. Of the Company's real estate portfolio,
approximately 49% was located in California and 50% was secured by first
mortgages. Company policy generally limits the amount of cash advanced on any
one loan, plus any existing mortgage, to between 70% and 80% (depending on
location) of the appraised value of the mortgaged property, as determined by
qualified independent appraisers at the time of loan origination. Since 1991,
the Company has continued to broaden its receivables portfolio by expanding its
revolving real estate secured lines of credit, its unsecured personal loan
business and its purchase of retail finance contracts from dealers (i.e.,
appliances, furniture and services).
S-4
<PAGE>
Set forth below is certain selected data regarding the Company's consumer
lending operations:
SELECTED CONSUMER LENDING DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSUMER FINANCE RECEIV-
ABLES (AT PERIOD END):
Real estate secured
instalment loans(1).. $3,214,468 $3,267,479 $3,268,918 $2,962,674 $2,836,152
Other finance receiv-
ables(2)............. 617,560 489,174 341,807 300,441 239,448
Unearned finance
charges and insurance
premiums............. (181,505) (177,310) (165,295) (150,229) (150,214)
---------- ---------- ---------- ---------- ----------
Total outstanding... $3,650,523 $3,579,343 $3,445,430 $3,112,886 $2,925,386
========== ========== ========== ========== ==========
AVERAGE SIZE OF CONSUMER
INSTALMENT LOAN MADE... $ 11.6 $ 13.5 $ 16.8 $ 18.0 $ 18.6
EARNED FINANCE CHARGES
AS A % OF AVERAGE NET
FINANCE RECEIVABLES.... 17.5% 17.9% 18.0% 18.2% 18.3%
ASSETS HELD FOR SALE AND
ACCOUNTS IN FORECLOSURE
(AT PERIOD END)(3)..... $ 214,665 $ 176,054 $ 107,417 $ 77,857 $ 52,133
CREDIT EXPERIENCE (AS A
PERCENTAGE OF NET
FINANCE RECEIVABLES
OUTSTANDING)
Delinquent receivables
ratio (at period
end)(3)(4)........... 2.00% 1.86% 1.76% 1.54% 1.32%
Provision for credit
losses............... 1.72% 1.36% 1.28% 1.09% 1.18%
Net credit loss-
es(3)(5)............. 1.67% 1.22% 1.00% 0.79% 0.91%
Allowances for losses
(at period end)(6)... 2.83% 2.83% 2.85% 2.85% 2.71%
</TABLE>
- --------
(1) Includes only loans which at inception were at least 50% secured by real
estate and which had an original advance over $10,000 ($6,000 prior to
July 1, 1992). The 1993 and 1992 decreases were mainly due to sluggishness
in the domestic economy and a weak real estate market, particularly in
California.
(2) Increases since 1990 reflect general expansion in the Company's program of
non-real estate secured loans and, in 1993, also reflect the expansion
into the retail finance contract business, purchasing principally
contracts on appliances, furniture and services.
(3) The increasing ratios and amounts through 1993, which have continued
through the first two months of 1994, were principally due to the
sluggishness in the domestic economy and, in particular, the weakening in
the California real estate market.
(4) Represents consumer finance receivables which are contractually past due
60 days or more to gross finance receivables outstanding.
(5) During the fourth quarter of 1992, the Company adopted a required new
accounting rule which requires that losses on disposal of repossessed
assets be classified as operating expenses rather than credit losses.
Results for periods prior to the fourth quarter of 1992 have not been
reclassified. Losses on repossessed assets which were included in
operating expenses in 1993 and the fourth quarter of 1992 were $5,952,000
and $3,021,000, respectively.
(6) The allowance for losses as a percentage of receivables outstanding at
December 31, 1990 was increased in response to the economic uncertainties
due to the decline in the U.S. economy and resulting slowdown in the
residential housing market.
S-5
<PAGE>
COMMERCIAL LENDING
The Company's commercial lending operations consist principally of inventory
finance and business credit and are provided through 72 branch lending offices
located in the United States (47), Puerto Rico (15), Canada (6) and Europe (4).
Inventory finance (also known as wholesale financing or floor plan financing)
consists principally of financing dealers' purchases from distributors or
manufacturers of goods for inventory. The products financed primarily include
boats and other recreational equipment, television and stereo equipment, major
appliances such as refrigerators, washers, dryers and air conditioners, and
manufactured housing. Loan terms typically provide for repayment within 30 days
following sale of the inventory by the borrower. After initial review of a
borrower's credit worthiness, the ongoing management of credit risk in this
area may include various monitoring techniques, such as periodic physical
inventory checks and review of the borrower's sales, as well as maintenance of
repurchase agreements with manufacturers which provides a degree of security in
the event of slow moving or obsolete inventory.
Business credit consists of secured loans, primarily revolving, to
manufacturers, distributors and selected service businesses, including
financial service companies. The loans are collateralized, with credit lines
typically from $5 million to $25 million and terms ranging from three to five
years. Actual borrowings are limited to specified percentages of the borrower's
inventory, receivables and other eligible collateral which are regularly
monitored to ascertain that outstandings are within approved limits and that
the borrower is otherwise in compliance with the terms of the arrangement. The
loans to financial service companies are secured by their respective finance
receivable portfolios. The company manages its credit risk in this area by
monitoring the quality of the borrower's loan portfolio and compliance with
financial covenants.
In addition to receivables related to the businesses described above, other
receivables include furniture and appliance retail and finance operations in
Puerto Rico and the liquidating portfolios of businesses the Company has
exited. The Company made a decision late in the fourth quarter of 1991 to exit
the rent-to-own finance business, reduce lending to certain asset based lending
lines, accelerate disposal of repossessed assets and liquidate receivables
remaining from previously sold businesses. As a result of this action the
commercial lending operation recognized a special after tax charge of
$130,000,000.
S-6
<PAGE>
Set forth below is certain selected financial data regarding the Company's
commercial lending operations:
SELECTED COMMERCIAL FINANCE DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
COMMERCIAL FINANCE RE-
CEIVABLES (AT PERIOD
END)(1):
Inventory finance(2)... $1,959,757 $1,873,895 $1,928,670 $1,872,191 $2,240,453
Business credit(3)..... 553,859 575,984 288,776 968,216 897,128
Other.................. 127,687 208,866 481,272 403,647 1,173,880
Unearned finance
charges............... (40,856) (55,212) (67,737) (87,075) (146,006)
---------- ---------- ---------- ---------- ----------
Total.............. $2,600,447 $2,603,533 $2,630,981 $3,156,979 $4,165,455
========== ========== ========== ========== ==========
ASSETS HELD FOR SALE,
NET (AT PERIOD END)(4). $ 90,114 $ 191,515 $ 232,198 $ 91,080 $ 52,069
CREDIT EXPERIENCE (AS A
PERCENTAGE OF NET
FINANCE RECEIVABLES
OUTSTANDING):
Delinquent receivables
ratios (at period
end)(5):
Inventory finance(6). 0.13% 0.82% 1.31% 3.42% 2.95%
Business credit(6)... -- 0.21 0.88 10.34 2.35
Other................ 19.14 22.42 25.84 12.79 5.84
---------- ---------- ---------- ---------- ----------
Total.............. 1.02% 2.38% 5.64% 6.65% 3.61%
========== ========== ========== ========== ==========
Provision for credit
losses(7)............. 1.22% 1.42% 8.80% 3.58% 1.13%
========== ========== ========== ========== ==========
Net credit losses(8):
Inventory finance.... 1.30% 1.56% 2.86% 2.64% 0.99%
Business credit...... (0.02) 0.23 13.46 1.79 1.63
Other................ 12.93 28.98 6.39 3.53 2.36
---------- ---------- ---------- ---------- ----------
Total.............. 1.64% 4.53% 6.19% 2.61% 1.55%
========== ========== ========== ========== ==========
Allowance for losses
(at period end)(9).... 2.93% 3.35% 6.44% 3.15% 1.70%
========== ========== ========== ========== ==========
</TABLE>
- --------
(1) The Company's decision to exit the rent-to-own finance business and reduce
lending to certain asset based lending lines (formerly included in business
credit) resulted in the reclassification at December 31, 1991 of net rent-
to-own finance receivables totaling $221,247,000 to assets held for sale,
and the transfer of other receivables totaling $206,931,000 from business
credit to the "other" category set forth under finance receivables
outstanding. Prior year data has not been restated. On July 2, 1990, the
insurance finance operations were dividended to the Company's parent in
order to permit the operation to engage in asset securitizations which are
prohibited by the Company's covenants. At December 31, 1989, these
operations had finance receivables outstanding of $560,728,000. The Company
continues to manage these operations and receives a fee for these
activities. Excludes assets held for sale.
(2) The 1993 increase was due to increased volume, primarily in home and
recreational products. The 1992 decrease was mainly due to faster paying
customers resulting from implementation of stronger portfolio management
procedures and efforts by certain borrowers to decrease the time they hold
inventory by using "just in time" delivery arrangements.
(3) The 1992 increase includes the purchase of a $134,000,000
manufacturer/distributor business credit portfolio.
(4) Since December 31, 1991, consists primarily of assets related to 1991
restructuring of operations. At December 31, 1993 is net of a $156,985,000
valuation allowance and includes rent-to-own finance receivables of
$120,469,000 and repossessed rent-to-own stores of $107,227,000. At
December 31, 1992 is net of a $121,549,000 valuation allowance and
includes rent-to-own finance receivables of $179,013,000 and repossessed
rent-to-own stores of $103,418,000.
(5) Excludes assets held for sale. Represents delinquent commercial finance
receivables to gross finance receivables outstanding. Effective in 1993,
the policy used for determining delinquent receivables was revised to
provide greater consistency among the Company's receivable portfolios. It
is management's view that the new methodology provides a better and more
meaningful assessment of the condition of the portfolio. Delinquent
receivables are now defined as the instalment balance for inventory
finance and business credit receivables and the receivable balance for all
other receivables over 60 days past due. Previously, delinquent
receivables were generally defined as finance inventory sold but unpaid 30
days or more, the portion of business credit loans in excess of the
approved lending limit and all other receivable balances contractually
past due 60 days or more. Data for 1992 and prior years has not been
restated.
(6) The decreases in 1992 and 1991 reflect write offs of delinquent accounts
(and accounting reclassifications--see note 1 above), implementation of
stronger portfolio management procedures and general improvement in the
economy. Increased
S-7
<PAGE>
delinquency in 1990 reflected the overall weak economy. This trend began in
1989, when consumer spending, which supports these businesses, began to
decline. Particularly affected were the marine industry (inventory finance),
and the appliance and furniture rental and Canadian computer markets
(business credit).
(7) The 1991 provision for losses included $62,816,000 taken as part of the
special charge recognized from the Company's decision to reduce lending to
certain asset based lending lines and liquidate receivables remaining from
previously sold businesses. The increased provision in 1991, excluding the
special charge, and in 1990 were in response to increased credit losses
and higher than normal delinquencies and nonearning receivables associated
with the weak U.S. and Canadian economies.
(8) The decreases in net credit losses in 1993 and 1992 were caused mainly by
decreases in delinquent and nonearning receivables resulting from improved
economic conditions, the reclassification of certain receivables to assets
held for sale and, in 1992, implementation of stronger portfolio
management procedures. The increase in 1992 in other net credit losses
resulted mainly from the write-off of delinquent and nonearning
receivables that were reclassified to the "other" category in 1991. In
1991 and 1990, credit losses increased principally as a result of the
depressed appliance and furniture rental and Canadian computer markets
associated with the general downturn in the U.S. and Canadian economies.
(9) The 1993 and 1992 reductions in the allowance for losses as a percentage
of receivables outstanding primarily was attributable to the write off of
delinquent and nonearning receivables in 1993 and 1992 and lower levels of
delinquent and nonearning accounts in the remaining portfolio at December
31, 1993 and 1992. In 1991, the percentage was increased principally due
to the Company's decision to reduce lending to certain asset based lending
lines and liquidate receivables remaining from previously sold businesses
(see note 7 above). The 1990 increase was in response to the weak U.S. and
Canadian economies resulting in higher than normal delinquencies and
nonearning receivables.
S-8
<PAGE>
LEASING OPERATIONS
The Company's leasing operations lease, service and manage containers,
chassis and trailers around the world and operate through 386 offices, depots
and other facilities in 44 countries. The operations specialize in intermodal
transportation equipment, which allows goods to travel by road, rail or ship.
The customers include railroads, steamship lines and motor carriers.
At December 31, 1993, the leasing operations' fleet consisted of standard
containers, refrigerated containers, domestic containers, tank containers and
chassis totaling 316,000 units which are owned or managed, and leased from 347
depots worldwide, 36,500 rail trailers leased to all major United States
railroads and to roll on/roll off steamship operators, shippers, shippers'
agents and regional truckers, and 3,800 over-the-road trailers in Europe. The
Company's leasing operations began leasing tank containers for carrying bulk
liquids in 1990 and had 1,900 tank containers in its fleet at December 31,
1993. Approximately 49% of the standard container, refrigerated container,
domestic container, tank container and chassis fleet is on term lease or
service contract minimum lease for periods of one to five years. Also, 34% of
the rail trailer fleet is on term lease or service contract minimum lease for
periods of one to five years.
Set forth below is certain data regarding the Company's leasing operations:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Fleet Size (in units)(at period
end):
Containers and chassis......... 316,000 280,000 255,100 244,400 235,900
Rail trailers.................. 36,500 34,400 36,800 40,500 43,300
European trailers.............. 3,800 2,900 1,700 800 --
Utilization:
Containers and chassis(1)...... 83% 85% 89% 90% 93%
Rail trailers(2)............... 91% 84% 75% 79% 83%
European trailers.............. 89% 84% 83% 81% --
</TABLE>
- --------
(1) The 1993 container and chassis utilization decline was due to slow
economic growth in key European economies and Japan; the 1992 decline was
due to higher than expected industry-wide supply of equipment. The 1991
and 1990 reductions resulted from a small decline in the rate of growth of
world trade and less favorable geographic balance of business.
(2) The rail trailer utilization increased in 1993 and 1992 due to a smaller
industry fleet, higher domestic economic activity and because many
shippers are moving from trucks to rail transport for long-haul shipments;
the 1991 and 1990 declines were due to reduced domestic economic activity.
On March 15, 1994, the Company's leasing operations acquired substantially
all the operating assets of the Container Rental Businesses of Tiphook plc.
See "Recent Developments".
S-9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following summary of consolidated financial information of the Company
and its consolidated subsidiaries should be read in conjunction with the
detailed information and consolidated financial statements and notes thereto
included in the documents described under "Information Incorporated by
Reference" in the Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues......... $1,392,126 $1,430,883 $1,402,417 $1,557,344 $1,635,400
Interest and debt ex-
pense................. 414,556 459,518 514,230 620,626 659,114
Depreciation on equip-
ment held for lease... 102,538 98,789 91,138 87,111 83,858
Salaries and other
operating expenses.... 512,652 504,037 492,019 501,642 523,528
Provision for losses on
receivables........... 94,142 84,815 287,404 166,861 83,898
Provision for losses on
assets held for sale.. 50,000 -- 141,225 -- --
---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before income taxes,
extraordinary item and
cumulative effect of
accounting change..... 218,238 283,724 (123,599) 181,104 285,002
Income taxes (benefit). 95,357 121,052 (30,088) 62,420 99,752
---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before extraordinary
item and cumulative
effect of accounting
change................ 122,881 162,672 (93,511) 118,684 185,250
Extraordinary loss on
early extinguishment
of debt............... (23,084) -- -- -- --
Cumulative effect of
change in accounting
for post
employment benefits
other than pensions... -- -- (10,875) -- --
---------- ---------- ---------- ---------- ----------
Income (loss) from con-
tinuing operations.... 99,797 162,672 (104,386) 118,684 185,250
Loss from discontinued
operations(1)......... -- -- -- -- (1,720)
---------- ---------- ---------- ---------- ----------
Net Income (loss)...... $ 99,797 $ 162,672 $ (104,386) $ 118,684 $ 183,530
========== ========== ========== ========== ==========
BALANCE SHEET DATA
(AT PERIOD END):
Assets:
Finance receivables,
net.................. $6,071,578 $5,994,512 $5,808,697 $6,081,928 $6,940,592
Equipment held for
lease, net of accu-
mulated
depreciation......... 1,306,458 1,062,116 995,141 912,467 870,469
Goodwill.............. 372,368 384,598 397,290 416,027 473,415
Other................. 1,280,966 1,247,668 1,318,129 952,728 611,953
---------- ---------- ---------- ---------- ----------
Total assets........ $9,031,370 $8,688,894 $8,519,257 $8,363,150 $8,896,429
========== ========== ========== ========== ==========
Liabilities and Share-
holder's Equity:
Notes payable........ $7,031,503 $6,589,576 $6,547,806 $6,237,097 $6,640,892
Other liabilities.... 550,246 670,382 611,400 743,181 762,481
---------- ---------- ---------- ---------- ----------
Total liabilities.... 7,581,749 7,259,958 7,159,206 6,980,278 7,403,373
Shareholder's equity. 1,449,621 1,428,936 1,360,051 1,382,872 1,493,056
---------- ---------- ---------- ---------- ----------
Total liabilities
and shareholder's
equity............ $9,031,370 $8,688,894 $8,519,257 $8,363,150 $8,896,429
========== ========== ========== ========== ==========
SELECTED RATIOS:(2)
Operating return on
tangible assets(3).... 1.31%(2) 2.12% (1.14)% 1.60% 2.34%
Operating return on
tangible equity(4).... 10.51%(2) 17.37% (9.53)% 13.20% 19.40%
Debt to tangible equity
ratio(5).............. 6.53x 6.31x 6.80x 6.45x 6.51x
Ratio of earnings to
fixed charges......... 1.50x 1.59x 0.77x 1.28x 1.42x
</TABLE>
- --------
(1) On September 11, 1989, the Company paid as a dividend to Transamerica
Corporation all of the outstanding capital stock of Transamerica Title
Insurance Company ("Title"), its wholly owned title insurance subsidiary.
The dividend was made at the net book value of Title as of August 31, 1989,
which amounted to $65,753,000. The operating results of the discontinued
title insurance operations have been shown as a single amount in the
statement of operations data. The revenues of the discontinued title
insurance operations were $125,731,000.
S-10
<PAGE>
(2) 1993 results include an extraordinary loss on early extinguishment of debt
of $23,084,000. Excluding this loss, the operating return on tangible
assets and operating return on tangible equity would have been 1.59% and
12.68%, respectively.
(3) Net income before goodwill amortization divided by simple average total
tangible assets. Tangible assets consist of total assets minus goodwill.
(4) Net income before goodwill amortization divided by simple average tangible
equity. Tangible equity consists of equity minus goodwill.
(5) Notes payable divided by equity minus goodwill at period end.
(6) The ratio of earnings to fixed charges is computed by dividing income from
continuing operations before income taxes, extraordinary loss on early
extinguishment of debt and cumulative effect of change in accounting, and
before fixed charges, by the fixed charges. Fixed charges consist of
interest and debt expense, and one-third of rent expense (which
approximates the interest factor).
S-11
<PAGE>
SUMMARY DISCUSSION OF 1993 RESULTS OF OPERATIONS
The following discussion is modified by and should be read in conjunction
with more detailed information included in the Company's Annual Report on Form
10-K which is incorporated by reference in this Prospectus Supplement.
CONSUMER LENDING
Consumer lending income, before the amortization of goodwill, in 1993
decreased $7,468,000 (8%) from 1992. The decrease was principally due to
increased operating expenses, an increased provision for losses on receivables
and lower revenues that more than offset lower interest expense and a
$5,269,000 benefit included in operating expenses from a reversal of reserves
related to a 1990 securitization and sale of receivables. Revenues in 1993
decreased $2,860,000 (--%) from 1992 principally because of lower income from
affiliates and servicing fees related to the run off of the receivables that
had been securitized and sold in 1990 and lower fees due to reduced volume of
real estate secured loans. Operating expenses increased in 1993 mainly due to
investments in new branches and losses on the disposal of repossessed assets.
The provisions for losses on receivables increased $14,364,000 (30%) in 1993
over 1992 due to increased credit losses. Interest expense declined $24,449,000
(9%) in 1993 from 1992 due to a lower average interest rate which more than
offset the effect of higher borrowings due to increased average receivables
outstanding. Net consumer finance receivables outstanding increased $71,180,000
(2%) in 1993.
COMMERCIAL LENDING
Commercial lending results, before the amortization of goodwill and a
$23,084,000 after tax extraordinary loss on the early extinguishment of
$125,000,000 deep discount long-term debt in 1993, were a loss of $12,775,000
for 1993 compared to income in 1992 of $17,938,000. The 1993 loss was due
primarily to the inclusion of a $50,000,000 ($35,960,000 after tax) provision
to reduce the net carrying value of repossessed rent-to-own stores to their
estimated realizable value. Information received during the year from
prospective buyers of the repossessed rent-to-own stores held for sale
indicated that the realizable value of the business had declined below its
carrying value.
The commercial lending 1993 results also included an $8,799,000 after tax
charge for the restructuring of the commercial lending unit's infrastructure, a
$4,224,000 after tax provision for anticipated legal and other costs associated
with the runoff of the liquidating portfolios and a $4,224,000 tax benefit from
the resolution of prior years' tax matters. Excluding the aforementioned items,
commercial lending income, before the amortization of goodwill and the
extraordinary loss on the early extinguishment of debt, increased $14,046,000
(78%) in 1993 over 1992. This improvement was primarily due to lower operating
expenses, a lower provision for losses on receivables and stronger margins
brought about by the declining interest rate environment. The interest rates at
which commercial lending borrows funds for its businesses have moved more
quickly than the rates at which it lends to its customers. As a result, margins
have been enhanced by the declining interest rate environment.
LEASING OPERATIONS
Leasing income, before the amortization of goodwill, decreased $4,427,000
(8%) in 1993 due primarily to an additional tax provision of $4,321,000 caused
by the revaluation of deferred income tax liability for the 1993 federal tax
rate increase. Excluding the additional tax provision, results for 1993 were
comparable to 1992 as higher fleet utilization and per diem rates in the rail
trailer business, a larger finance lease portfolio and a larger fleet of
refrigerated containers were offset by a decline in standard container
utilization.
S-12
<PAGE>
USE OF PROCEEDS
The net proceeds to be received from the sale of the 1999 Notes and the 2004
Notes will be used by the Company to repay a portion of the short-term debt
incurred to finance the acquisition by the Company of certain assets of Tiphook
plc. See "Recent Developments".
RECENT DEVELOPMENTS
On March 15, 1994, the Company, through wholly-owned subsidiaries, acquired
substantially all of the operating assets of the Container Rental Businesses of
Tiphook plc, a London-based container, trailer and rail equipment lessor
("Tiphook"). The Company paid 673 million pounds sterling to Tiphook on the
closing date with further payments to be made upon delivery of title to certain
assets and release of escrows. When completed, payments would total up to 722
million pounds sterling (about $1.1 billion).
The assets acquired consisted primarily of approximately 354,200 containers,
6,400 tank containers and 400 container chassis (which aggregated 501,000 ITEUs
(investment twenty-foot equivalent units) of containers). The containers and
chassis were acquired subject to existing leases to customers of Tiphook. The
Company also acquired certain related trade receivables. In addition, the
Company assumed agency agreements with respect to approximately 200 depots and
assumed certain specified liabilities of the Container Rental Businesses
including certain trade accounts payable, but did not assume any borrowings,
tax liabilities or contingent liabilities. See "Selected Pro Forma Financial
Data" for selected unaudited financial data which reflects the acquisition of
certain assets and the assumption of certain liabilities of Tiphook by the
Company on a pro forma basis. The Company has financed the acquisition through
an $80 million capital contribution from its parent, Transamerica Corporation,
and short-term borrowings of approximately $1 billion. The short-term
borrowings will be repaid by the proceeds of this offering, future issuances of
medium-term debt and cash generated from operations.
S-13
<PAGE>
SELECTED PRO FORMA FINANCIAL DATA
The following pro forma selected unaudited financial data for the year ended
December 31, 1993 are derived from the audited consolidated financial
statements of the Company and the unaudited combined financial statements of
Tiphook Container Rental Company Limited and Tiphook Rentals Limited
(hereinafter referred to as the "Container Rental Businesses") after giving
effect to the acquisition of certain assets of the Container Rental Businesses
by the Company as described under "Recent Developments". The data should be
read in conjunction with such financial statements, related notes and other
financial information included or incorporated by reference herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993(1)
----------------------------------------------------
TRANSAMERICA CONTAINER
FINANCE RENTAL
CORPORATION BUSINESSES
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
AMOUNTS AMOUNTS ADJUSTMENTS CONSOLIDATED
------------ ---------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues:
Finance charges.......... $ 929,464 $ -- $ -- $ 929,464
Leasing revenues......... 388,327 250,172 -- 638,499
Other.................... 74,335 -- -- 74,335
---------- ---------- --------- -----------
1,392,126 250,172 -- 1,642,298
Expenses:
Interest and debt ex-
pense................... 414,556 55,168 53,559 (2) 468,115
(55,168)(2)
Depreciation on equipment
held for lease.......... 102,538 67,116 30,576 (3) 200,230
Salaries and other oper-
ating expenses.......... 512,652 109,450 -- 622,102
Other.................... 144,142 5,310 (5,310)(6) 144,142
---------- ---------- --------- -----------
1,173,888 237,044 23,657 1,434,589
---------- ---------- --------- -----------
Income before income tax-
es....................... 218,238 13,128 (23,657) 207,709
Income taxes.............. 95,357 13,571 (17,783)(4) 91,145
---------- ---------- --------- -----------
Income before extraordi-
nary item................ $ 122,881 $ (443) $ (5,874) $ 116,564
========== ========== ========= ===========
At period end:
Assets:
Finance receivables, net
of allowance for losses
and unearned fees....... $6,071,578 $ -- $ -- $ 6,071,578
Equipment held for lease,
net of accumulated
depreciation............ 1,306,458 929,294 104,083 (3) 2,339,835
Other.................... 1,653,334 282,623 (195,299)(5) 1,724,422
(16,236)(5)
---------- ---------- --------- -----------
$9,031,370 $1,211,917 $(107,452) $10,135,835
========== ========== ========= ===========
Liabilities and Sharehold-
er's Equity:
Notes payable............ $7,031,503 $ 872,865 $(872,865)(5) $ 8,016,503
985,000 (2)
Other liabilities........ 550,246 123,691 (84,226)(5) 589,711
---------- ---------- --------- -----------
7,581,749 996,556 27,909 8,606,214
Shareholder's equity..... 1,449,621 215,361 80,000 (1) 1,529,621
(215,361)(5)
---------- ---------- --------- -----------
$9,031,370 $1,211,917 $(107,452) $10,135,835
========== ========== ========= ===========
</TABLE>
- --------
(1)Basis of Presentation
The pro forma financial information was prepared using the Container
Rental Businesses balance sheet as of October 31, 1993 and income
statement for the year ended October 31, 1993, converted at an exchange
rate of (Pounds)1.0 = $1.475. The income statement was prepared by
combining the interim period results for the six month periods ended
April 30, 1993 and October 31, 1993.
S-14
<PAGE>
The following adjustments have been made to convert the Container Rental
Businesses financial statements, which are prepared in conformity with
United Kingdom standard accounting practices, to a basis in conformity
with accounting principles generally accepted in the United States:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
October 31, 1993 balance sheet:
Goodwill................................................ $ 195,299
==========
Deferred income tax liability........................... $ 84,226
==========
Year ended October 31, 1993 income statement:
Foreign currency translation expense.................... $ 2,212
==========
Goodwill amortization................................... $ 5,310
==========
Deferred income tax provision........................... $ 13,571
==========
The following summarizes the total purchase price:
<CAPTION>
(IN THOUSANDS)
<S> <C>
Cash purchase price...................................... $1,065,000
==========
Cash purchase price obtained through:
Issuance of notes payable............................... $ 985,000
Capital contribution from Transamerica Corporation...... 80,000
----------
$1,065,000
==========
</TABLE>
Under purchase accounting, the assets purchased and liabilities assumed
in the transaction are required to be adjusted to estimated fair values
based upon an allocation of the purchase price. For the purposes of
preparing the December 31, 1993 pro forma balance sheet, the assets of
the Container Rental Businesses as of October 31, 1993 were valued based
on the information obtained during due diligence conducted by the
Company prior to execution of the asset purchase agreement. The
Container Rental Businesses assets acquired and liabilities assumed will
be recorded based upon fair values as of March 15, 1994, the actual date
of acquisition.
(2)Notes Payable
Notes payable have been adjusted to eliminate the Container Rental
Businesses notes payable not assumed and to reflect the debt to be
issued by the Company in connection with the acquisition. Interest
expense has been adjusted to reflect current interest rates on the
related notes of the Company.
(3)Equipment Held for Lease
Equipment held for lease has been adjusted to reflect the allocation of
the purchase price not otherwise allocated to the fair value of nonlease
assets. Depreciation expense has been adjusted to reflect depreciation
of the allocated balance using the methodology followed by the Company.
(4) Income Tax Expense
Income taxes have been calculated based on the effective income tax rate
for the Company's leasing operations.
(5)Allocation of Purchase Price
The purchase price has been allocated as described in the table below:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Increase (decrease) to the Container Rental Businesses
net asset value at October 31, 1993 as a result of
estimated fair value adjustments:
Equipment held for lease............................ $ 104,083
Other assets........................................ (16,236)
----------
Total estimated fair value adjustments............ 87,847
Net assets of Container Rental Businesses at October
31, 1993.............................................. 215,361
Elimination of goodwill not acquired................... (195,299)
Elimination of notes payable not assumed............... 872,865
Elimination of deferred taxes not assumed.............. 84,226
----------
$1,065,000
==========
</TABLE>
(6)Goodwill Amortization
The Container Rental Businesses financial statements include goodwill
amortization. The goodwill was not included in the assets acquired and
accordingly the associated expense has been eliminated.
S-15
<PAGE>
DESCRIPTION OF THE 1999 NOTES AND THE 2004 NOTES
The following description of the particular terms of the 1999 Notes and the
2004 Notes offered hereby supplements the description of the general terms and
provisions of Senior Securities set forth in the accompanying Prospectus, to
which description reference is hereby made.
GENERAL
The 1999 Notes and the 2004 Notes will each be issued as a separate series of
Senior Securities under an indenture dated as of April 1, 1991 between the
Company and Harris Trust and Savings Bank, as trustee (the "Trustee"), in fully
registered form only. The 1999 Notes and the 2004 Notes will be limited to
$300,000,000 and $200,000,000 aggregate principal amount, respectively. The
1999 Notes will mature on March 15, 1999 and the 2004 Notes will mature on
March 15, 2004.
The Notes will be represented, in part, by the Global Note registered in the
name of a nominee of The Depository Trust Company and, in part, by Notes in
definitive form ("Certificated Notes"). Only $10 million principal amount of
the 2004 Notes will be issued as Certificated Notes. Notes issued as
Certificated Notes will trade as Certificated Notes until maturity. Except as
set forth under "Book-Entry System" below, Notes issued in the form of a Global
Note may not be exchanged for Certificated Notes prior to maturity. Notes
issued in the form of a Global Note will be registered in denominations of
$1,000 and integral multiples thereof and Notes issued in the form of
Certificated Notes will be registered in denominations of $100,000 or any
amount in excess thereof which is an integral multiple of $1,000.
Interest on the 1999 Notes will accrue from March 15, 1994 at the rate of
6.80% per annum and interest on the 2004 Notes will accrue from March 15, 1994
at the rate of 7.50% per annum, in each case payable semi-annually on March 15
and September 15, commencing September 15, 1994 and at maturity (each an
"Interest Payment Date"), to the persons in whose names the 1999 Notes or the
2004 Notes are registered at the close of business on the March 1 or September
1 next preceding the Interest Payment Date. Principal of and interest on the
1999 Notes and the 2004 Notes will be payable at the Corporate Trust Office of
the Trustee in the City of Chicago, or at the office or agency of the Company
maintained for such purposes in the Borough of Manhattan, the City of New York;
provided that payment of interest may be made at the option of the Company by
check mailed on any Interest Payment Date to the registered holders at the
close of business on the March 1 or September 1 next preceding such Interest
Payment Date. See "Book-Entry System". Notwithstanding the foregoing, a holder
of $10 million or more in aggregate principal amount of Certificated Notes
shall be entitled to receive such payments of principal and interest by wire
transfer of immediately available funds, provided that payment instructions
have been received by the Trustee in writing by not less than 15 calendar days
prior to the applicable Interest Payment Date.
REDEMPTION
The 1999 Notes and the 2004 Notes will not be redeemable by the Company prior
to maturity.
BOOK-ENTRY SYSTEM
Except for $10 million principal amount of the 2004 Notes, the Notes will be
issued in the form of one or more Global Notes which will be deposited with, or
on behalf of, The Depository Trust Company, New York, New York (the
"Depositary"), and registered in the name of the Depositary's nominee. Except
as set forth below, the Global Note may be transferred, in whole and not in
part, only by the Depositary to a nominee of the Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
the Depositary or any nominee to a successor depositary or any nominee of such
successor.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization"
S-16
<PAGE>
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. The Depositary holds
securities that its participants ("Participants") deposit with the Depositary.
The Depositary also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations ("Direct Participants").
The Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the 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
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Securities and Exchange Commission.
Purchases of interests in the Global Note under the Depositary's system must
be made by or through Direct Participants, which will receive a credit for such
interests on the Depositary's records. The ownership interest of each actual
purchaser of interests in the Global Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchase,
but Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Global
Note are to be accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Global Note, except as described
below.
To facilitate subsequent transfers, the Global Note deposited by Participants
with the Depositary is registered in the name of the Depositary's partnership
nominee, Cede & Co. The deposit of the Global Note with the Depositary and its
registration in the name of Cede & Co. effects no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners of
the interests in the Global Note; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts interests in the Global
Note are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Note. Under its usual procedures, the Depositary mails an Omnibus
Proxy to the Company as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts interests in the Global Note are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Note will be made to the
Depositary. The Depositary's practice is to credit Direct Participants'
accounts on the payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that it
will not receive payment on the payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is 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 Participant and not of the Depositary, the Trustee, or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and
S-17
<PAGE>
interest to the Depositary is the responsibility of the Company or the Trustee,
disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
The Depositary may discontinue providing its services as depositary with
respect to the Notes at any time by giving reasonable notice to the Company or
the Trustee. Under such circumstances, in the event that a successor depositary
is not obtained, definitive Note certificates are required to be printed and
delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor depositary). In that event,
Note certificates will be printed and delivered.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Note may not be transferred except as a whole by
the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
The Notes represented by the Global Note will be exchangeable for Notes in
definitive form of like tenor as such Global Note in denominations of $1,000
and in any greater amount that is an integral multiple thereof if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 and, in
either case, a successor depositary is not appointed by the Company within 90
days of receipt by the Company of such notice or of the Company becoming aware
of such ineligibility, (ii) the Company in its discretion at any time
determines not to have all of the Notes represented by the Global Note and
notifies the Trustee thereof, or (iii) an Event of Default has occurred and is
continuing with respect to the Notes. Any Global Note that is exchangeable
pursuant to the preceding sentence is exchangeable for Notes issuable in
authorized denominations and registered in such names as the Depositary holding
such Global Note shall direct. Subject to the foregoing, the Global Note is not
exchangeable, except for a Global Note or Global Notes of the same aggregate
denominations to be registered in the name of the Depositary or its nominee or
in the name of a successor of the Depositary or a nominee of such successor.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available or same-day funds.
Secondary trading on long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
represented by the Global Note will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in the
Notes represented by the Global Note will therefore be required by the
Depositary to settle in same-day funds. In addition, it is anticipated that
secondary market trading activity, if any, in the Certificated Notes will
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in same-day funds on trading activity in the
Notes.
S-18
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and
each of the Underwriters, for whom Goldman, Sachs & Co. and Morgan Stanley &
Co. Incorporated are acting as representatives, has severally agreed to
purchase, the respective principal amounts of the 1999 Notes and the 2004 Notes
set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 1999 NOTES 2004 NOTES
----------- ------------ ------------
<S> <C> <C>
Goldman, Sachs & Co............................ $ 97,500,000 $ 65,000,000
Morgan Stanley & Co. Incorporated.............. 97,500,000 65,000,000
CS First Boston Corporation.................... 21,000,000 14,000,000
Lehman Brothers Inc............................ 21,000,000 14,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................. 21,000,000 14,000,000
J.P. Morgan Securities Inc..................... 21,000,000 14,000,000
Salomon Brothers Inc .......................... 21,000,000 14,000,000
------------ ------------
Total...................................... $300,000,000 $200,000,000
============ ============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and to pay for all of the 1999 Notes and the
2004 Notes offered hereby, if any are taken.
The Underwriters propose to offer the 1999 Notes and the 2004 Notes in part
directly to retail purchasers at the initial public offering price set forth on
the cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession not in excess of 0.30% of the principal
amount of the 1999 Notes and 0.35% of the principal amount of the 2004 Notes.
The Underwriters may allow and such dealers may reallow a concession not in
excess of 0.25% of the principal amount of the Notes to certain brokers and
dealers. After the 1999 Notes and the 2004 Notes are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the representatives.
The 1994 Notes and the 2004 Notes are a new issue of securities with no
established trading market. The Company has been advised by the representatives
of the Underwriters that the representatives intend to make a market in the
1994 Notes and the 2004 Notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the 1994 Notes and the 2004
Notes.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
LEGAL OPINIONS
The validity of the 1999 Notes and the 2004 Notes offered hereby will be
passed upon for the Company by Orrick, Herrington & Sutcliffe, San Francisco,
California and for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New
York, New York. Cleary, Gottlieb, Steen & Hamilton will rely as to matters of
California law on the opinion of Orrick, Herrington & Sutcliffe.
S-19
<PAGE>
PROSPECTUS
$2,000,000,000
TRANSAMERICA FINANCE CORPORATION
DEBT SECURITIES AND WARRANTS
Transamerica Finance Corporation (the "Company") from time to time may offer
its debt securities consisting of senior debentures, notes, bonds and/or other
evidences of indebtedness ("Senior Securities") and/or subordinated debentures,
notes, bonds and/or other evidences of indebtedness ("Subordinated Securities";
the Senior Securities and the Subordinated Securities being herein collectively
referred to as "Debt Securities") and warrants to purchase Debt Securities
("Warrants") with an aggregate initial public offering price of up to
$2,000,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including European Currency Units ("ECU"). The Debt
Securities and Warrants may be offered in separate series in amounts, at prices
and on terms to be set forth in supplements to this Prospectus. The Debt
Securities and Warrants may be sold for U.S. Dollars, one or more foreign
currencies or amounts determined by reference to an index and the principal of
and any interest on the Debt Securities may likewise be payable in U.S.
Dollars, one or more foreign currencies or amounts determined by reference to
an index.
The Senior Securities will rank equally with all other unsubordinated
indebtedness of the Company. The Subordinated Securities will be subordinated
to all existing and future Senior Indebtedness (as defined) of the Company. See
"Description of Debt Securities."
The terms of the Debt Securities and any Warrants, including, where
applicable, the specific designation, aggregate principal amount, currency,
denomination, maturity, premium, rate (which may be fixed or variable) and time
of payment of interest, terms for redemption at the option of the Company or
the holder, for sinking fund payments, for payments of additional amounts or
for exercising the Warrants, and the initial public offering price, will be set
forth in the accompanying Prospectus Supplement (the "Prospectus Supplement").
The Debt Securities and Warrants may be sold through underwriting syndicates
led by one or more managing underwriters or through one or more underwriters
acting alone. The Debt Securities and Warrants may also be sold directly by the
Company or through agents designated from time to time. If any underwriters or
agents are involved in the sale of the Debt Securities or Warrants, their
names, the principal amount of Debt Securities or Warrants to be purchased by
them and any applicable fee, commission or discount arrangements with them will
be set forth in the Prospectus Supplement. See "Plan of Distribution." With
regard to the Warrants, if any, in respect of which this Prospectus is being
delivered, the applicable Prospectus Supplement will set forth a description of
the Debt Securities for which the Warrants are exercisable and the offering
price, if any, exercise price, duration, detachability and any other specific
terms of the Warrants.
The Debt Securities may be issued in registered form or bearer form with
coupons attached or both. In addition, all or a portion of the Debt Securities
of a series may be issuable in temporary or permanent global form. Debt
Securities in bearer form will be offered only (1) to persons located outside
the United States and (2) to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is August 27, 1993.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 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 Regional
Offices of the Commission located at 230 South Dearborn Street, Chicago,
Illinois and 75 Park Place, New York, New York; and at the Public Reference
Office of the Commission at 450 Fifth Street, N.W., Washington D.C. Copies of
such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington D.C. 20549 at prescribed rates.
In addition, certain securities of the Company are listed on the New York Stock
Exchange, and such reports and other information concerning the Company can
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York.
INFORMATION INCORPORATED BY REFERENCE
The Company's annual report on Form 10-K for the year ended December 31, 1992
and the Company's quarterly report on Form 10-Q for the quarter ended March 31,
1993 filed by the Company with the Commission are incorporated by reference in
this Prospectus.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities and the
Warrants offered hereby shall be deemed to be incorporated by reference in this
Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed
to Edwin C. Summers, Senior Vice President, Secretary and General Counsel,
Transamerica Finance Corporation, 1150 South Olive Street, Los Angeles,
California 90015 (telephone: 213-742-4757).
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars",
"U.S. dollars" or "U.S. $").
This Prospectus may not be used to consummate sales of Debt Securities or
Warrants unless accompanied by a Prospectus Supplement.
TRANSAMERICA FINANCE CORPORATION
Transamerica Finance Corporation (formerly Transamerica Finance Group, Inc.)
is principally engaged in consumer lending, commercial lending and leasing
operations. Unless the context indicates otherwise, the term "Company" as used
herein refers to Transamerica Finance Corporation and its subsidiaries.
The Company was incorporated in Delaware in 1931 under the name Pacific
Finance Corporation, as successor to a California corporation of the same name
organized in 1920. In 1961, the Company became a wholly owned subsidiary of
Transamerica Corporation ("Transamerica"). On June 20, 1990, Transamerica
formed a new subsidiary and contributed to it all of the outstanding capital
stock of the Company. On February 19, 1991, the Company's name was changed to
Transamerica Finance Corporation, and Transamerica's new subsidiary's name was
changed to Transamerica Finance Group, Inc. In addition to activities conducted
through the Company, Transamerica Finance Group, Inc. conducts, through other
subsidiaries, certain of Transamerica's commercial lending (insurance premium
finance) and consumer lending operations. The executive offices of the Company
are located at Transamerica Center, 1150 South Olive Street, Los Angeles,
California 90015 (telephone: 213-742-4321).
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Transamerica is a financial services organization which engages through its
subsidiaries in two primary businesses: finance and insurance. Finance consists
of consumer lending, commercial lending, leasing and real estate services.
Insurance comprises life insurance, asset management and insurance brokerage.
On July 20, 1992, Transamerica announced its intention to divest its property
and casualty insurance business as part of Transamerica's strategy to focus on
its finance and life insurance businesses. On April 27, 1993, Transamerica
completed the initial public offering of a majority interest in its former
property and casualty insurance subsidiary which reduced its equity ownership
to 27%.
Because Transamerica Finance Corporation is a holding company, the rights of
its creditors, including the holders of the Debt Securities, to participate in
the assets of any subsidiary upon the latter's liquidation or reorganization
will be subject to the claims of the subsidiary's creditors, which will take
priority except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
APPLICATION OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities and Warrants offered hereby and the
exercise of Warrants will be applied to the reduction of short-term debt
incurred to provide funds for use in the ordinary course of the Company's
financing business. The Company anticipates that such proceeds will also be
used from time to time (1) to provide funds needed in the ordinary course of
its financing business, the amount and nature of which are dependent on several
factors, including the volume of the Company's business, and (2) to pay
maturing long-term debt.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges are computed by dividing earnings
from continuing operations before fixed charges and income taxes by the fixed
charges. For purposes of computation of the ratios, earnings and fixed charges
include those of the Company and all subsidiaries, and fixed charges consist of
interest and debt expense, and one-third of rent expense (which approximates
the interest factor) of such companies.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS
------------------------ ENDED MARCH 31,
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 1.53 1.42 1.28 0.77 1.59 1.61
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
The Senior Securities are to be issued under an Indenture dated as of April
1, 1991 (the "Senior Indenture") between the Company and Harris Trust and
Savings Bank, as Trustee (the "Senior Trustee"). The Subordinated Securities
are to be issued under an Indenture dated as of April 1, 1991 (the
"Subordinated Indenture") between the Company and First Interstate Bank of
California, formerly First Interstate Bank, Ltd., as Trustee (the "Subordinated
Trustee"; together with the Senior Trustee, the "Trustees"). The Senior
Indenture and the Subordinated Indenture (collectively, the "Indentures") are
exhibits to the Registration Statement. The following summaries of certain
provisions of the Indentures do not purport to be complete and are qualified in
their entirety by reference to the provisions of the Indentures. Numerical
references in
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parentheses below are to sections of the Indentures and, unless otherwise
indicated, capitalized terms shall have the meanings ascribed to them in the
Indentures.
GENERAL
Debt Securities and Warrants offered by this Prospectus will be limited to an
aggregate initial public offering price of $2,000,000,000 or the equivalent
thereof in one or more foreign currencies or composite currencies (including
ECU). The Indentures provide that Debt Securities in an unlimited amount may be
issued thereunder from time to time in one or more series. The Senior
Securities will rank pari passu with other Senior Indebtedness of the Company.
The Subordinated Securities will rank pari passu with other Subordinated
Indebtedness of the Company and, together with such Subordinated Indebtedness,
will be subordinated in right of payment to the prior payment in full of the
Senior Indebtedness of the Company as described under "Subordination--
Subordinated Securities."
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities offered thereby: (1) the
title of the Debt Securities; (2) any limit on the aggregate principal amount
of the Debt Securities; (3) whether the Debt Securities are to be issuable as
Registered Securities or Bearer Securities or both, whether any Bearer
Securities will be subject to any limitations on offering, sale and
distribution, whether any of the Debt Securities are to be issuable initially
in temporary global form and whether any of the Debt Securities are to be
issuable in permanent global form; (4) the price or prices (expressed as a
percentage of the aggregate principal amount thereof) at which the Debt
Securities will be issued; (5) the date or dates on which the Debt Securities
will mature; (6) the rate or rates at which the Debt Securities will bear
interest, if any, or the formula pursuant to which such rate or rates shall be
determined, and the date or dates from which any such interest will accrue; (7)
the Interest Payment Dates on which any such interest on the Debt Securities
will be payable, the Regular Record Date for any interest payable on any Debt
Securities which are Registered Securities on any Interest Payment Date, and
the extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other
than in the manner described under "Temporary Global Securities" below; (8) the
person to whom any interest on any Registered Security will be payable if other
than the person in whose name such Registered Security is registered at the
close of business on the Regular Record Date for such interest as described
under "Payment and Paying Agents" below, and the manner in which any interest
on any Bearer Security will be paid if other than in the manner described under
"Payment and Paying Agents" below; (9) any mandatory or optional sinking fund
or analogous provisions; (10) each office or agency where, subject to the terms
of the Indenture as described below under "Payment and Paying Agents," the
principal of and any premium and interest on the Debt Securities will be
payable and each office or agency where, subject to the terms of the Indenture
as described under "Form, Exchange, Registration and Transfer" below, the Debt
Securities may be presented for registration of transfer or exchange; (11) the
date, if any, after which and the price or prices at which the Debt Securities
may be redeemed, in whole or in part at the option of the Company or the
Holder, or pursuant to mandatory redemption provisions, and the other detailed
terms and provisions of any such optional or mandatory redemption provisions;
(12) the denominations in which any Debt Securities which are Registered
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which any
Debt Securities which are Bearer Securities will be issuable, if other than the
denomination of $5,000; (13) the currency or currencies of payment of principal
of and any premium and interest on the Debt Securities; (14) any index used to
determine the amount of payments of principal of and any premium and interest
on the Debt Securities; (15) the portion of the principal amount of the Debt
Securities, if other than the principal amount thereof, payable upon
acceleration of maturity thereof; (16) the application, if any, of either or
both of the defeasance or covenant defeasance sections of the Indenture as
described below under "Defeasance and Covenant Defeasance" to the Debt
Securities; (17) the Person who shall be the Security Registrar for Debt
Securities issuable as Registered Securities, if other than the Trustee, the
Person who shall be the initial Paying Agent and the Person who shall be the
initial Common Depositary or the depositary, as the case may be; (18) any other
terms of the Debt Securities not inconsistent with the provisions of the
Indenture; and (19) the terms of
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<PAGE>
any Warrants offered together with such Debt Securities. Any such Prospectus
Supplement will also describe any special provisions for the payment of
additional amounts with respect to the Debt Securities of such series.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their stated principal amounts. Special
United States federal income tax considerations applicable to Debt Securities
issued at an original issue discount will be set forth in a Prospectus
Supplement relating thereto. Special United States tax considerations
applicable to any Debt Securities that are denominated in a currency other than
United States dollars or that use an index to determine the amount of payments
of principal of and any premium and interest on the Debt Securities will be set
forth in a Prospectus Supplement relating thereto.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in an applicable
Prospectus Supplement, definitive Bearer Securities (other than Bearer
Securities in global form) will have interest coupons attached. (Section 201)
The Indenture also will provide that Bearer Securities of a series may be
issuable in permanent global form. (Section 201) See "Permanent Global
Securities." If Bearer Securities are being offered, the applicable Prospectus
Supplement will set forth various limitations on their offering, sale and
distribution.
Registered Securities of any series will be exchangeable for other Registered
Securities of the same series of authorized denominations and of a like
aggregate principal amount and tenor. In addition, if Debt Securities of any
series are issuable as both Registered Securities and Bearer Securities, at the
option of the Holder upon request confirmed in writing, and subject to the
terms of the Indenture, Bearer Securities (with all unmatured coupons, except
as provided below, and all matured coupons in default) of such series will be
exchangeable into Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Bearer
Securities surrendered in exchange for Registered Securities between the close
of business on a Regular Record Date or a Special Record Date and the relevant
date for payment of interest shall be surrendered without the coupon relating
to such date for payment of interest and interest will not be payable in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the terms of the Indenture. Bearer Securities will not be issued in
exchange for Registered Securities. (Section 305) Each Bearer Security other
than a temporary global Bearer Security will bear a legend substantially to the
following effect: "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."
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Debt Security issued in global form) may be
presented for registration of transfer (with the form of transfer endorsed
thereon duly executed), at the office of the Security Registrar or at the
office of any transfer agent designated by the Company for such purpose with
respect to any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. Unless the Prospectus Supplement provides
otherwise, the applicable Trustee will be the initial Security Registrar for
the Debt Securities. (Sections 101 and 305) If a Prospectus Supplement refers
to any transfer agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of Debt Securities, the
Company may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent (or
Security Registrar) acts, except that, if Debt Securities of a series are
issuable solely as Registered
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Securities, the Company will be required to maintain a transfer agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (in
addition to the Security Registrar) a transfer agent in a Place of Payment for
such series located in Europe. The Company may at any time designate additional
transfer agents with respect to any series of Debt Securities. (Section 1002)
The Company shall not be required to (i) issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before (A) if Debt Securities of the series are issuable
only as Registered Securities, the day of mailing of the relevant notice of
redemption and ending at the close of business on the day for such mailing and
(B) if Debt Securities of the series are issuable as either Bearer Securities
or Registered Securities, the earlier of the day of the first publication of
the relevant notice of redemption or the mailing of the relevant notice of
redemption and ending on the close of business on such earlier day; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; or (iii) exchange any Bearer Security called
for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately surrendered for
redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Bearer Securities will be payable,
subject to any applicable laws and regulations, at the offices of such Paying
Agents outside the United States as the Company may designate from time to time
or, at the option of the Holder, by a check or by transfer to an account
maintained by the payee with a bank located outside the United States. (Section
1002) Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on Bearer Securities on any Interest Payment Date will be
made only against surrender outside the United States, to a Paying Agent, of
the coupon relating to such Interest Payment Date. (Section 1001) No payment
with respect to any Bearer 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, payments of principal of and any
premium and interest on Bearer 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, The City of New York, if (but 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. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Registered Securities will be made
at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment
of any interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the Person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest. (Sections 307 and 1002)
Any Paying Agents outside the United States and any other Paying Agents in
the United States initially designated by the Company for the Debt Securities
will be named in an applicable Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Debt Securities of a series are issuable solely as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series and, if Debt Securities of a series
are issuable as Bearer Securities, the Company will be required to maintain (i)
a Paying Agent in the Borough of Manhattan, The City of New York for payments
with respect to any Registered Securities of the series (and for payments with
respect to Bearer Securities of the series in the limited circumstances
described above, but not otherwise),
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<PAGE>
and (ii) a Paying Agent in a Place of Payment located outside the United States
where Debt Securities of such series and any coupons appertaining thereto may
be presented and surrendered for payment; provided that if the Debt Securities
of such series are listed on The International Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent in London or
Luxembourg or any other required city located outside the United States, as the
case may be, for the Debt Securities of such series. (Section 1002)
All moneys paid by the Company to a Paying Agent or held by the Company in
trust for the payment of principal of and any premium or interest on any Debt
Security, which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable, will be discharged from
trust and repaid to the Company and the Holder of such Debt Security or any
coupon will thereafter, as an unsecured general creditor, look only to the
Company for payment thereof. (Section 1003)
TEMPORARY GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion of
the Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary global Securities, without
interest coupons, to be deposited with a common depositary for Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euroclear System
("Euroclear") and CEDEL S.A. ("CEDEL") for credit to the designated accounts.
On and after the date determined as provided in any such temporary global
Security and described in an applicable Prospectus Supplement, but within a
reasonable period of time, each such temporary global Security will be
exchangeable for definitive Bearer Securities, definitive Registered Securities
or all or a portion of a permanent global Bearer Security, or any combination
thereof, as specified in an applicable Prospectus Supplement, only under the
circumstances set forth in the accompanying pricing supplement to such
Prospectus Supplement. No definitive Bearer Security delivered in exchange for
a portion of a temporary global Security shall be mailed or otherwise delivered
to any location in the United States or its possessions in connection with such
exchange. (Section 304) Any special restrictions on delivery of a Debt Security
issued in permanent global form will be set forth in a Prospectus Supplement
relating thereto.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form, the
applicable Prospectus Supplement will describe the distribution procedures
applicable to such securities in permanent global form (including any
applicable certification requirements) and the circumstances, if any, under
which beneficial owners of interests in any such permanent global Security may
exchange such interests for Debt Securities of such series and of like tenor
and principal amount of any authorized form and denomination. (Section 305) A
Person will, except with respect to payment of principal of and any premium and
interest on such permanent global Security, be treated as a Holder of such
principal amount of Outstanding Securities represented by such permanent global
Security as shall be specified in a written statement of the Holder of such
permanent global Security. (Section 203) Principal of and any premium and
interest on a permanent global Security will be payable in the manner described
in the applicable Prospectus Supplement.
SUBORDINATION
General
As used herein "Senior Indebtedness" means all Debt of the Company, except
Subordinated Indebtedness and Junior Subordinated Indebtedness; "Debt" of the
Company means all indebtedness representing money borrowed, which indebtedness
is incurred or guaranteed by the Company; "Subordinated Indebtedness" means all
Debt of the Company, other than Junior Subordinated Indebtedness, which is
subordinate and junior in right with respect to the general assets of the
Company to Senior Indebtedness;
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"Junior Subordinated Indebtedness" means all Debt of the Company which is
subordinate and junior in right with respect to the general assets of the
Company to all other Debt of the Company (including without limitation Senior
Indebtedness and Subordinated Indebtedness).
Subordinated Securities
The payment of principal, premium, if any, and interest in respect of the
Subordinated Securities is expressly subordinated in right of payment, to the
extent set forth in the Subordinated Indenture, to all Senior Indebtedness
which may at any time and from time to time be outstanding. In the event of any
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, whether or not pursuant to bankruptcy laws, sale of all or
substantially all of the assets, dissolution, liquidation or any other
marshaling of the assets and liabilities of the Company, no amount shall be
paid by the Company in respect of the principal, premium, if any, or interest
on the Subordinated Securities or any related coupon unless and until all
Senior Indebtedness shall have been paid in full together with all interest
thereon and all other amounts payable in respect thereof. (Subordinated
Indenture Section 1501)
The Subordinated Indenture also states that if an Event of Default with
respect to the Subordinated Securities, other than those specified in the
preceding paragraph, shall happen and be continuing, no amount shall be paid by
the Company in respect of the principal, premium, if any, or interest on the
Subordinated Securities or any related coupon, except at Stated Maturity
(subject to the preceding paragraph) and except for current interest payments
as provided in the Subordinated Securities or any related coupon, unless and
until all Senior Indebtedness shall have been paid in full together with all
interest thereon and all other amounts payable in respect thereof. Further, in
the event of any default in the payment of any Senior Indebtedness and during
the continuance of any such default, the Subordinated Indenture states that no
amount shall be paid by the Company in respect of the principal, premium, if
any, or interest on the Subordinated Securities or any related coupon, except
at Stated Maturity (subject to the preceding paragraph), and except for current
interest payments as provided in the Subordinated Securities or any related
coupon. (Subordinated Indenture Section 1501)
There are no restrictions in the Subordinated Indenture with respect to the
creation of Senior Indebtedness. At March 31, 1993, Senior Indebtedness
aggregated approximately $6.20 billion. The Company expects to make additional
borrowings constituting Senior Indebtedness from time to time.
CERTAIN COVENANTS OF THE COMPANY WITH RESPECT TO SENIOR SECURITIES
Limitations on Liens
The Senior Indenture provides that neither the Company nor any Subsidiary
will create, incur or assume any mortgage, pledge, lien, charge or other
security interest on any of the assets of the Company or of any Subsidiary
(except to secure Debt to the Company or a Subsidiary) without making effective
provision whereby the Senior Securities shall be equally and ratably secured
except: (i) such security interests on assets of the Company or any Subsidiary
existing at the date of the Senior Indenture and renewals thereof; (ii) certain
purchase money liens, liens on real property and any improvements thereon
constructed in whole or in part by or for the Company or any Subsidiary to
secure the cost of such construction improvements made after the date of the
Senior Indenture, existing security interests on after-acquired assets, and
renewals thereof; (iii) certain security interests affecting property of a
corporation existing at the time it first becomes a Subsidiary, and renewals
thereof; (iv) certain security interests in connection with taxes or legal
proceedings or created in the ordinary course of business and not in connection
with the borrowing of money; (v) certain security interests in connection with
government and certain other contracts; and (vi) certain security interests on
property and assets in connection with any arrangement involving the transfer
of such property or assets where the transfer is accounted for as a sale under
generally accepted accounting principals. In the case of clause (ii) above, the
principal amount secured by any of such security interests may not exceed the
lesser of the cost or fair value (as determined by the Board of Directors) of
the property subject to such
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security interests and, in the case of clause (iii) above, the principal amount
secured by any of such security interests may not exceed the lesser of the book
value or fair value (as determined by the Board of Directors) of the property
subject to such security interest. (Senior Indenture Section 1007)
Limitations on Mergers
The Senior Indenture provides that if any merger or consolidation of the
Company with or into any other corporation or any conveyance or transfer to any
person of all or substantially all of the property or assets of the Company
would subject any of the property or assets of the Company owned immediately
prior to such consolidation, merger, conveyance or transfer to any mortgage,
pledge, lien, charge or other security interest, the Company will, prior to
such consolidation, merger, conveyance or transfer, secure the Senior
Securities, equally and ratably with any other Debt of the Company then
entitled to be so secured, by a direct lien on all such property or assets
equal to and ratable with all liens other than any theretofore existing
thereon. (Senior Indenture Section 803)
ABSENCE OF OTHER RESTRICTIVE COVENANTS AND EVENT RISK PROVISIONS
The Indentures do not contain any provision which will restrict the Company
in any way from paying dividends or making other distribution on its capital
stock or purchasing or redeeming any of its capital stock, or from incurring,
assuming or becoming liable upon Senior Indebtedness or Subordinated
Indebtedness or any other type of debt or other obligations. The Indentures do
not contain any financial ratios or specified levels of net worth or liquidity
to which the Company must adhere. In addition, the Subordinated Indenture does
not restrict the Company from creating liens on its property for any purpose.
In addition, the Indentures do not contain any provisions which would require
the Company to repurchase or redeem or otherwise modify the terms of any of its
Debt Securities upon a change in control or other events involving the Company
which may adversely affect the creditworthiness of the Debt Securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Securities under the Indentures, may consolidate with or merge into, or convey
or transfer its assets substantially as an entirety to, any Person that is a
corporation, partnership or trust organized and existing under the laws of any
domestic jurisdiction, provided that any successor Person assumes the Company's
obligations on the Debt Securities and under the Indentures, that after giving
effect to the transaction no Event of Default and no event which, after notice
or lapse of time, would become an Event of Default shall have occurred and be
continuing, and that certain other conditions are met. (Section 801)
DEFAULTS AND CERTAIN RIGHTS ON DEFAULT
Each Indenture defines an Event of Default with respect to any series of Debt
Securities thereunder as being any of the following events and such other
events as may be established for the Debt Securities of such series: (i)
default for 30 days in any payment of interest on the Debt Securities of such
series; (ii) default with respect to Debt Securities of such series in any
payment of principal or premium, if any, when due; (iii) default in the payment
of any sinking fund installment with respect to the Debt Securities of such
series when due; (iv) default in performance of any other covenant in the
Indenture for 60 days after written notice to the Company by the Trustee or the
Holders of at least 15% in principal amount of the Debt Securities of such
series then Outstanding; (v) failure by the Company or any Subsidiary to pay
any Debt in an amount exceeding $10,000,000 at maturity; (vi) acceleration of
any Debt of the Company or any Subsidiary in an amount exceeding $10,000,000
under the terms of the instrument under which such Debt is or may be
outstanding, if such acceleration is not annulled within 30 days after notice
to the Company by the Trustee or the Holders of at least 15% in principal
amount of the Debt Securities of such series then Outstanding; or (vii) certain
events of bankruptcy, insolvency, receivership or reorganization. (Section 501)
The Company
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will be required to file with the Trustee annually a written statement as to
the fulfillment of its obligations under the Indenture. (Section 704)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of
that series by notice as provided in the Indenture may declare the principal
amount (or, if the Outstanding Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Outstanding Securities of that series
to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree for payment of money has been obtained by the
Trustee, and subject to applicable law and certain other provisions of the
applicable Indenture, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
Each Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holder shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603) Subject to
such provisions for the indemnification of the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 512)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security or related coupon, (b) reduce the principal amount of, or premium or
interest on, any Debt Security or related coupon or any premium payable upon
the redemption thereof, (c) change any obligation of the Company to pay
additional amounts, (d) reduce the amount of principal of an Original Issue
Discount Security payable upon acceleration of the Maturity thereof, (e) change
the coin or currency in which any Debt Security or any premium or interest
thereon is payable, (f) impair the right to institute suit for the enforcement
of any payment on or with respect to any Debt Security, (g) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults, (h) reduce the requirements contained in the
Indenture for quorum or voting, (i) change any obligation of the Company to
maintain an office or agency in the places and for the purposes required by the
Indenture, (j) with respect to each of the Subordinated and Junior Subordinated
Indentures, modify the terms relating to subordination in a manner adverse to
the Holders of Debt Securities issued under that Indenture, (k) adversely
affect the right of repayment, if any, of the Debt Securities at the option of
the Holders thereof, or (l) modify any of the above provisions. (Section 902)
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Senior Indenture Section 1009 and Subordinated Indenture Section 1008) The
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of each series may, on behalf of all Holders of Debt
Securities of that series and any coupons appertaining thereto, waive any past
default and its consequences under the Indenture
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with respect to Debt Securities of that series, except a default (a) in the
payment of principal of (or premium, if any) or any interest on any Debt
Security or coupon of such series, and (b) in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series or coupon
affected. (Section 513)
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities or
the number of votes entitled to be cast by the Holder of any Debt Security (i)
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon acceleration
of the Maturity thereof, and (ii) the principal amount of a Debt Security
denominated in a foreign currency or a composite currency shall be the U.S.
dollar equivalent, determined as of the date of original issuance of such Debt
Security by the Company in good faith, of the principal amount of such Debt
Security (or, in the case of an Original Issue Discount Security, the U.S.
dollar equivalent, determined as of the date of original issuance of such Debt
Security, of the amount determined as provided in (i) above). (Section 101)
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series. (Section 1301) A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Securities of such series, in
any such case upon notice given in accordance with "Notices" below. (Section
1302) Except for any consent which must be given by the Holder of each
Outstanding Security affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting at which a quorum (as described
below) is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, any resolution with respect to any consent or waiver
which must be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened at which a quorum is present only by the
affirmative vote of the Holders of 66 2/3% in principal amount of the
Outstanding Securities of that series; and provided, further, that, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by
the affirmative vote of the Holders of such specified percentage in principal
amount of the Outstanding Securities of that series. Any resolution passed or
decision taken at any meeting of Holders of Securities of any series duly held
in accordance with the Indenture will be binding on all Holders of Securities
of that series and the related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Securities of a
series; provided, however, that if any action is to be taken at such meeting
with respect to a consent or waiver which must be given by the Holders of not
less than 66 2/3% in principal amount of the Outstanding Securities of a
series, the persons holding or representing 66 2/3% in principal amount of the
Outstanding Securities of such series will constitute a quorum. (Section 1304)
DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides, unless the Company elects otherwise pursuant to
Section 301 of the Indenture with respect to the Debt Securities of any series,
that the Company may elect either (A) to defease and be discharged from any and
all obligations with respect to such Debt Securities (except for the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency in respect of the Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (B) to be released from its
obligations with respect to such Debt Securities under Sections 1006, 1007 and
1008 of the Senior Indenture and Sections 1006 and 1007 of the Subordinated
Indenture ("covenant defeasance"), upon the deposit with the Trustee (or other
qualifying
11
<PAGE>
trustee), in trust for such purpose, of money, and/or U.S. Government
Obligations which through the payment of principal and interest in accordance
with their terms will provide money, in an amount sufficient to pay the
principal of and any premium and interest on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor. Such a trust may only be established if, among other things,
the Company has delivered to the trustee an opinion of counsel (as specified in
the Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance or covenant defeasance had not occurred and,
in the case of Bearer Securities, there will be no adverse federal tax
consequences to the Holders of such Bearer Securities as a result of such
defeasance or covenant defeasance. Such opinion, in the case of defeasance
under clause (A) above, must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the Indenture. In the case of covenant defeasance,
such termination will not relieve the Company of its obligation to pay when due
the principal of or interest on the Debt Securities of such series if the Debt
Securities of such series are not paid from the money or Government Obligations
held by the Trustee for the payment thereof. The Prospectus Supplement may
further describe the provisions, if any, permitting such defeasance or covenant
defeasance with respect to the Debt Securities of a particular series. (Article
Fourteen)
NOTICES
Except as otherwise provided in the applicable Indenture, notices to Holders
of Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Securities. Notices to Holders of Registered Securities will
be given by mail to the addresses of such Holders as they appear in the
Security Register. (Sections 101 and 106)
TITLE
Title to any Bearer Securities and any coupons appertaining thereto will pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security as the absolute
owner thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308)
REPLACEMENT OF DEBT SECURITIES AND COUPONS
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such Debt Security to the Trustee. Debt Securities or
coupons that become destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Debt Security,
coupon or coupons or evidence of the destruction, loss or theft thereof
satisfactory to the Company and the Trustee; in the case of any coupon which
becomes destroyed, stolen or lost, such coupon will be replaced by issuance of
a new Debt Security in exchange for the Debt Security to which such coupon
appertains. In the case of a destroyed, lost or stolen Debt Security or coupon
an indemnity satisfactory to the Trustee and the Company may be required at the
expense of the Holder of such Debt Security or coupon before a replacement Debt
Security will be issued. (Section 306)
CONCERNING THE TRUSTEES
Harris Trust and Savings Bank, the Senior Trustee under the Senior Indenture,
has stand-by credit facilities with the Company in the amount of $80,000,000,
the borrowings under which would rank on a parity with the Senior Securities.
The Company also maintains a deposit account and conducts other transactions
12
<PAGE>
with the Senior Trustee. The Senior Trustee is also the trustee under the
Company's Indenture dated as of July 1, 1982 and the Company's Indenture dated
as of November 1, 1987 pursuant to each of which the Company has outstanding
Senior Indebtedness.
First Interstate Bank of California, formerly First Interstate Bank, Ltd.,
the Subordinated Trustee under the Subordinated Indenture, has stand-by credit
facilities with the Company in the amount of $50,000,000, the borrowings under
which would be senior to the Subordinated Securities. The Company also
maintains a deposit account and conducts other transactions with the
Subordinated Trustee. The Subordinated Trustee is also the successor trustee
under the Company's Indenture dated as of September 1, 1984 and the Company's
Indenture dated as of November 1, 1987 pursuant to each of which the Company
has outstanding Subordinated Indebtedness.
The Senior Trustee or the Subordinated Trustee may from time to time make
loans to the Company and perform other services for the Company in the normal
course of business. Under the provisions of the Trust Indenture Act of 1939, as
recently amended (the "Trust Indenture Act"), upon the occurrence of a default
under an indenture, if a trustee has a conflicting interest (as defined in the
Trust Indenture Act) the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the Trust Indenture
Act, an indenture trustee shall be deemed to have a conflicting interest if the
trustee is a creditor of the obligor. If the trustee fails either to eliminate
the conflicting interest or to resign within 10 days after the expiration of
such 90-day period, the trustee is required to notify security holders to this
effect and any security holder who has been a bona fide holder for at least six
months may petition a court to remove the trustee and to appoint a successor
trustee.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants sets forth certain
general terms and provisions of the Warrants to which any Prospectus Supplement
may relate. The particular terms of the Warrants offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply
to the Warrants so offered will be described in the Prospectus Supplement
relating to such Warrants.
Warrants may be offered independently or together with any series of Debt
Securities offered by a Prospectus Supplement and may be attached to or
separate from such Debt Securities. Each series of Warrants will be issued
under a separate warrant agreement (a "Warrant Agreement") to be entered into
between the Company and a bank or trust company, as Warrant Agent (the "Warrant
Agent"), all as set forth in the Prospectus Supplement relating to such series
of Warrants. The Warrant Agent will act solely as the agent of the Company in
connection with the certificates for the Warrants (the "Warrant Certificates")
of such series and will not assume any obligation or relationship of agency or
trust for or with any holders of Warrant Certificates or beneficial owners of
Warrants. Copies of the forms of Warrant Agreements, including the forms of
Warrant Certificates, are filed as an exhibit to the Registration Statement to
which this Prospectus pertains. The following summaries of certain provisions
of the forms of Warrant Agreements and 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 Warrant Agreements and the Warrant
Certificates.
GENERAL
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Warrants, if any, offered thereby for the terms of such
Warrants including, where applicable: (i) the offering price; (ii) the
currencies in which such Warrants are being offered; (iii) the designation,
aggregate principal amount, currencies, denominations and terms of the series
of Debt Securities purchasable upon exercise of such Warrants; (iv) the
designation and terms of the series of Debt Securities with which such Warrants
are being offered and the number of such Warrants being offered with each such
Debt Security; (v) the date on and after which such Warrants and the related
series of Debt Securities will be transferable separately; (vi) the
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<PAGE>
principal amount of the series of Debt Securities purchasable upon exercise of
each such Warrant and the price at which and currencies in which such principal
amount of Debt Securities of such series may be purchased upon such exercise;
(vii) the date on which the right to exercise such Warrants shall commence and
the date (the "Expiration Date") on which such right shall expire; (viii)
federal income tax consequences; and (ix) any other terms of such Warrants.
Warrant Certificates of each series will be in registered form and will be
exchangeable at the option of the holder thereof for Warrant Certificates of
such series of like tenor representing in the aggregate the number of Warrants
surrendered for exchange. Warrant Certificates of each series will be
transferable upon surrender without service charge, subject to the payment of
any taxes or other governmental charges due in respect of a transfer, and will
be exchangeable and transferable at the corporate trust office of the Warrant
Agent or any other office indicated in the Prospectus Supplement relating to
such series of Warrants. Prior to the exercise of their Warrants, holders of
Warrants will not have any of the rights of holders of the series of Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest on the series of Debt
Securities purchasable upon such exercise, or to enforce any of the covenants
in the applicable Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of the related series of Debt Securities at such exercise price as shall
in each case be set forth in, or calculable as set forth in, the Prospectus
Supplement relating to such Warrant. Warrants of a series may be exercised at
the corporate trust office of the Warrant Agent for such series of Warrants (or
any other office indicated in the Prospectus Supplement relating to such series
of Warrants) at any time prior to 5:00 P.M., New York City time, on the
Expiration Date set forth in the Prospectus Supplement relating to such series
of Warrants. After the close of business on the Expiration Date relating to
such series of Warrants (or such later date to which such Expiration Date may
be extended by the Company), unexercised Warrants of such series will become
void.
Warrants of a series may be exercised by delivery to the appropriate Warrant
Agent of payment, as provided in the Prospectus Supplement relating to such
series of Warrants, of the amount required to purchase the principal amount of
the series of Debt Securities purchasable upon such exercise, together with
certain information as set forth on the reverse side of the Warrant Certificate
evidencing such Warrants. Such Warrants will be deemed to have been exercised
upon receipt of the exercise price, subject to the receipt within five business
days of such Warrant Certificate. Upon receipt of such payment and such Warrant
Certificate, properly completed and duly executed, at the corporate trust
office of the appropriate Warrant Agent (or any other office indicated in the
Prospectus Supplement relating to such series of Warrants), the Company will,
as soon as practicable, issue and deliver the principal amount of the series of
Debt Securities purchasable upon such exercise. If fewer than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities and the Warrants separately or
together, (i) to one or more underwriters or dealers for public offering and
sale by them and (ii) to investors directly or through agents. The distribution
of the Debt Securities and the Warrants may be effected from time to time in
one or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of the Debt
Securities and the Warrants offered thereby.
In connection with the sale of the Debt Securities and the Warrants,
underwriters, dealers or agents may receive compensation from the Company or
from purchasers of the Debt Securities and the Warrants for whom they may act
as agents, in the form of discounts, concessions or commissions. The
underwriters,
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<PAGE>
dealers or agents which participate in the distribution of the Debt Securities
and the Warrants may be deemed to be underwriters under the Securities Act of
1933 and any discounts or commissions received by them and any profit on the
resale of the Debt Securities and the Warrants received by them may be deemed
to be underwriting discounts and commissions thereunder. Any such underwriter,
dealer or agent will be identified and any such compensation received from the
Company will be described in the Prospectus Supplement. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities that are issuable in bearer form will agree that it will not
offer, sell, resell or deliver, directly or indirectly, Debt Securities in
bearer form to persons located in the United States or to United States persons
(other than qualifying financial institutions), in connection with the original
issuance of the Debt Securities.
All Debt Securities and Warrants will be new issues of securities with no
established trading market. Any underwriters to whom Debt Securities or
Warrants are sold by the Company for public offering and sale may make a market
in such securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any such securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
LEGAL OPINIONS
The validity of the Debt Securities and Warrants is being passed upon for the
Company by Orrick, Herrington & Sutcliffe, San Francisco.
EXPERTS
The consolidated financial statements of Transamerica Finance Corporation and
subsidiaries appearing in the Company's Annual Report on Form 10-K for the year
ended December 31, 1992, incorporated by reference in this Prospectus, have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference in
reliance upon the report of Ernst & Young given upon their authority as experts
in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PRO-
SPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUP-
PLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURI-
TIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEI-
THER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE
MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLI-
CATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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PROSPECTUS SUPPLEMENT
<S> <C>
Transamerica Finance Corporation........................................... S-3
Description of Business Segments........................................... S-4
Selected Consolidated Financial Information................................ S-10
Summary Discussion of 1993 Results of Operations........................... S-12
Use of Proceeds............................................................ S-13
Recent Developments........................................................ S-13
Selected Pro Forma Financial Data.......................................... S-14
Description of the 1999 Notes and the 2004 Notes........................... S-16
Underwriting............................................................... S-19
Legal Opinions............................................................. S-19
PROSPECTUS
Available Information...................................................... 2
Information Incorporated by Reference...................................... 2
Transamerica Finance Corporation........................................... 2
Application of Proceeds.................................................... 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 3
Description of Warrants.................................................... 13
Plan of Distribution....................................................... 14
Legal Opinions............................................................. 15
Experts.................................................................... 15
</TABLE>
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$500,000,000
TRANSAMERICA
FINANCE
CORPORATION
$300,000,000
6.80% SENIOR NOTES
DUE MARCH 15, 1999
$200,000,000
7.50% SENIOR NOTES
DUE MARCH 15, 2004
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
REPRESENTATIVES OF THE UNDERWRITERS
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