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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 9, 1998
AT&T CAPITAL CORPORATION
A Delaware Commission File I.R.S. Employer
Corporation No. 1-11237 No. 22-3211453
44 Whippany Road, Morristown, New Jersey 07962-1983
Telephone Number (973) 397-3000
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Form 8-K February 9, 1998
Item 5. OTHER EVENTS.
A. Support Agreement. On February 9, 1998, AT&T Capital Corporation
("Capital"), a Delaware corporation, and Newcourt Credit Group Inc.
("Newcourt"), an Ontario corporation and the indirect owner of all the
outstanding shares of capital stock of Capital, entered into a Support
Agreement (the "Support Agreement"). A copy of the Support Agreement is filed
as Exhibit 10(a) hereto. The description and summary of the Support Agreement
contained herein are qualified in all respects by reference thereto.
The Support Agreement provides that, at all times while the Support
Agreement is in effect, (i) Newcourt will directly or indirectly own and hold
legal title to and beneficial interest in a majority of the outstanding shares
of capital stock of Capital having voting power for the election of members of
the board of directors of Capital and will not directly or indirectly sell,
exchange, transfer, pledge or in any way encumber or otherwise dispose of any
such majority shares of capital stock (unless required by a court decree), (ii)
Newcourt will cause Capital and its subsidiaries to have a tangible net worth
(as determined in accordance with generally accepted accounting principles
consistently applied as in effect from time to time and reflected in the
consolidated balance sheet of Capital) of at least $1.00, and (iii) if Capital
is unable to make timely payment of any principal, interest or premium in
respect of any Debt (as defined), Newcourt shall, at Capital's request, provide
(or cause to be provided) to Capital on a timely basis, funds (which, if
provided by Newcourt or any subsidiary of Newcourt, may be provided as an equity
contribution, as a loan or otherwise, in each case as elected by Newcourt)
sufficient to make such payment (the obligations of Newcourt described in the
foregoing clauses (i), (ii) and (iii) are herein called the "Newcourt
Obligations").
"Debt", as defined in the Support Agreement, means (i) any indebtedness
for borrowed money incurred from time to time by Capital from any individual,
corporation, partnership, trust, association or other entity of any kind
("Person") and (ii) any indebtedness for borrowed money of any Person to another
Person assumed or guaranteed by Capital; provided that neither of the following
shall constitute Debt for purposes of the Support Agreement: (x) any
indebtedness for borrowed money incurred, assumed or guaranteed by Capital which
indebtedness (or, in the case of a guaranty thereof, such guaranty), by the
terms of the instruments evidencing such indebtedness (or guaranty) or any
indenture or similar instrument relating thereto, is not entitled to the benefit
of the Support Agreement; and (y) any indebtedness for borrowed money (howsoever
arising, including without limitation by way of securitization or syndication
transactions) incurred, assumed or guaranteed from time to time by Capital which
indebtedness (or, in the case of a guaranty thereof, such guaranty) is secured
by a pledge, mortgage, security interest or lien on, or payable solely from the
income and proceeds of, any property (including, without limiting the generality
of such term, any shares of stock, other equity interests, debt, intangible
assets or tangible assets) of Capital or any direct or indirect subsidiary
thereof and which indebtedness (or guaranty) is not a general obligation of
Capital.
The Support Agreement provides that it may be amended or terminated by
the parties hereto at any time in writing; provided that, so long as any series
of Debt (or, if not issued as a series, any
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Form 8-K February 9, 1998
other Debt) incurred, assumed or guaranteed by Capital prior to such amendment
or termination remains outstanding, no such amendment which adversely affects
the holders of such series of Debt (or, if not issued as a series, such other
Debt) or any such termination shall become effective with respect to such series
of Debt (or such other Debt) unless (i) at least two nationally recognized
statistical rating agencies that have rated such series of Debt (or such other
Debt) prior to such amendment or termination confirm in writing that their
ratings for such series of Debt (or such other Debt) in effect immediately prior
to such amendment or termination will not be downgraded as a result of such
amendment or termination (or, in the case of any such series of Debt (or such
other Debt) that is not so rated, such series of Debt (or such other Debt) shall
be treated in the same manner as any series of similar Debt (or other similar
Debt) that is so rated); or (ii) such series of Debt (or such other Debt) shall
have been defeased in accordance with the provisions of the instrument
evidencing such series of Debt (or such other Debt) or any indenture or similar
instrument relating thereto; or (iii) the holders of at least a majority of the
outstanding principal amount of such series of Debt consent (or, with respect to
any Debt not issued as a series, the holder of such Debt consents) in writing to
such amendment or termination.
The Support Agreement also provides that all holders of Debt incurred,
assumed or guaranteed by Capital during the term of the Support Agreement or
incurred, assumed or guaranteed by Capital prior to the date hereof shall be
intended third-party beneficiaries of the Support Agreement; provided that the
third-party beneficiary rights of any such holder shall be limited to (i) the
right to demand that Capital enforce Capital's rights under the Newcourt
Obligations and (ii) the right to proceed against Newcourt on behalf of Capital
to enforce Capital's rights under the Newcourt Obligations for the benefit of
Capital if Capital fails or refuses to take timely action to enforce Capital's
rights thereunder following demand for such enforcement by such holder. However,
the Support Agreement expressly provides that it shall not constitute or be
deemed to constitute a direct or indirect guaranty by Newcourt of any Debt or
other obligation or liability of any kind or character whatsoever of Capital,
and that no holder of any such Debt, obligation or liability shall have any
right to proceed directly against Newcourt to obtain any amount due with respect
to any such Debt, obligation or liability including, without limitation, any
principal thereof or interest or premium thereon.
B. Guarantee. Capital intends to enter into a guarantee (the
"Guarantee") pursuant to which it will guarantee the payment of certain
indebtedness and liquidity facilities issued, guaranteed or entered into by
Newcourt (as amended, supplemented, restated or replaced, collectively, the
"Debt Securities") for the timely benefit of the holders of the Debt Securities
(collectively, the "Noteholders").
The Debt Securities (as in existence on December 31, 1997) are listed
in Exhibit 99(a) hereto. As noted in such exhibit, the outstanding
principal amount of the Debt Securities (consisting of Debt Securities issued
by Newcourt and Debt Securities issued by certain subsidiaries of Newcourt and
guaranteed by Newcourt) at December 31, 1997 aggregated approximately Cdn.
$1,987,625,352 (U.S. $1,387,231,541, using an exchange rate of .6979 U.S.$ to
1.00 Cdn.$).
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Form 8-K February 9, 1998
Because the Guarantee is anticipated to cover future indebtedness under the
various documents evidencing or relating to the Debt Securities, as well as
amendments, supplements, restatements or replacements of or to the Debt
Securities, the aggregate outstanding principal amount of the Debt Securities
to be covered by the Guarantee is expected to increase in the future.
Exhibit 99(a) hereto sets forth, with respect to the various Debt
Securities as of December described therein, the aggregate outstanding
principal amount thereof as of December 31, 1997, the interest rates (or range
of interest rates) relating thereto and the maturity (or maturities) thereof.
For further information as to the Debt Securities, see (i) Newcourt's Reports
on Form 6-K (setting forth its unaudited consolidated financial statements as
of, and for the respective three, six and nine month periods ended, March 31,
1997, June 30, 1997 and September 30, 1997 included as Exhibit 99B(2) to
Capital's Current Report on Form 8-K dated November 19, 1997 heretofore filed
by Capital with the Securities and Exchange Commission (which Reports on
Form 6-K were filed by Newcourt with the Securities and Exchange Commission)
and (ii) the audited consolidated financial statements of Newcourt as of, and
for the years ended, December 31, 1997 and 1996 included as Exhibit 99(d)
hereto.
Capital's obligations under the Guarantee are anticipated to represent
an irrevocable and unconditional guarantee of the due and punctual payment to
the Noteholders, on demand, whether at stated maturity or otherwise, of all
debts, liabilities and obligations of Newcourt under the Debt Securities,
including present and future, direct and indirect, absolute and contingent and
matured and unmatured debts, liabilities and obligations. The liability of
Capital under the Guarantee is anticipated to be unlimited as to amount and to
be absolute and unconditional irrespective of any conditions or circumstances
that might otherwise constitute a defense available to Capital or Newcourt,
including any defense based on the lack of validity or the unenforceability of
the Debt Securities or any defense or counterclaim available to Newcourt.
The beneficiaries under the Guarantee are anticipated to have no
obligation to make demands on or pursue remedies against Newcourt or any other
person prior to making demand for payment on Capital. The Guarantee is
expected to be a guarantee of payment and performance and not collection and is
expected to be expressly joint and several with any and all other guarantees
given in respect of the guaranteed obligations. Capital will waive, among other
possible rights, any right to subrogation and any right to be indemnified by
Newcourt or to claim contribution from any other guarantor of the obligations of
Newcourt as long as any guaranteed obligations remain outstanding. The Guarantee
is expected to continue in effect until all guaranteed obligations are repaid in
full. The Guarantee will provide that it shall not be deemed to affect, limit or
impair any obligations of Newcourt under the Support Agreement or affect, limit
or impair any rights of Capital under the Support Agreement or of any holder of
Debt as a third-party beneficiary thereunder.
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Form 8-K February 9, 1998
C. Additional Information Relating to Newcourt. On February 4, 1998,
Newcourt issued a press release setting forth (among other things) its
preliminary results of operations for the year ended December 31, 1997 and for
the three month period October 1, 1997 through December 31, 1997. Such press
release is included as Exhibit 99(b) hereto. For further information concerning
Newcourt, see (i) Newcourt's Prospectus dated November 24, 1997 included as
Exhibit 99(c) hereto (which Prospectus was filed by Newcourt with the Securities
and Exchange Commission), (ii) Newcourt's Reports on Form 6-K (setting forth
its unaudited consolidated statements as of, and for the respective three, six
and nine month periods ended, March 31, 1997, June 30, 1997 and September 30,
1997) included as Exhibit 99B(2) to Capital's Current Report on Form 8-K dated
November 19, 1997 heretofore filed by Capital with the Securities and Exchange
Commission (which Reports on Form 6-K were filed by Newcourt with the Securities
and Exchange Commission), and (iii) Newcourt's audited consolidated financial
statements as of, and for the years ended, December 31, 1997 and 1996 included
as Exhibit 99(d) hereto.
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Form 8-K February 9, 1998
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10(a) Support Agreement dated February 9, 1998 between
Newcourt Credit Group Inc. and AT&T Capital
Corporation.
99(a) Listing of Certain Debt Securities of Newcourt
Credit Group Inc. as of December 31, 1997.
99(b) Press Release issued by Newcourt Credit Group Inc.
on February 4, 1998.
99(c) Prospectus dated November 24, 1997 of Newcourt Credit
Group Inc. relating to Cdn. $460,000,000 Fully Paid
Subscription Rights, each representing the
right to receive one Common Share of Newcourt Credit
Group Inc.
99(d) The audited consolidated financial statements of
Newcourt Credit Group Inc. as of, and for the years
ended, December 31, 1997 and 1996.
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Form 8-K February 9, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AT&T CAPITAL CORPORATION
GLENN A. VOTEK
_________________________
By: Glenn A. Votek
Vice President and Treasurer
February 9, 1998
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Form 8-K February 9, 1998
EXHIBIT INDEX
Exhibit
10(a) Support Agreement dated February 9, 1998 between
Newcourt Credit Group Inc. and AT&T Capital
Corporation.
99(a) Listing of Certain Debt Securities of Newcourt
Credit Group Inc. as of December 31, 1997.
99(b) Press Release issued by Newcourt Credit Group Inc.
on February 4, 1998.
99(c) Prospectus dated November 24, 1997 of Newcourt Credit
Group Inc. relating to Cdn. $460,000,000 Fully Paid
Subscription Rights, each representing the
right to receive one Common Share of Newcourt Credit
Group Inc.
99(d) The audited consolidated financial statements of
Newcourt Credit Group Inc. as of, and for the years
ended, December 31, 1997 and 1996.