AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1999
REGISTRATION NOS. 333-82913; 333-82913-01
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NEWCOURT CREDIT GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
ONTARIO NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
NEWCOURT CENTRE
207 QUEENS QUAY WEST
SUITE 700
TORONTO, ONTARIO, CANADA M5J 1A7
(416) 507-2400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL OFFICES)
------------------------
AT&T CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
DELAWARE 22-3211453
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2 GATEHALL DRIVE
PARSIPPANY, NEW JERSEY 07054
(973) 606-3500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SCOTT J. MOORE, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
NEWCOURT CREDIT GROUP INC.
AT&T CAPITAL CORPORATION
2 GATEHALL DRIVE
PARSIPPANY, NEW JERSEY 07054
(973) 606-3500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
M. DAVID GALAINENA, ESQ.
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 558-5600
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE(1)
- -------------------------------------------------------------------------------------------------------
6.875% Exchange Notes, Series B. 1,000,000,000 100% 1,000,000,000 278,000
(1) Paid at the time of the initial filing of this Registration Statement.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
OFFER TO EXCHANGE ALL $1,000,000,000 6.875% NOTES, SERIES B
DUE FEBRUARY 16, 2005
FOR
$1,000,000,000 6.875% EXCHANGE NOTES, SERIES B
DUE FEBRUARY 16, 2005
OF
NEWCOURT CREDIT GROUP INC.
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST GUARANTEED BY
AT&T CAPITAL CORPORATION
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME,
ON NOVEMBER 17, 1999, UNLESS EXTENDED.
------------------------
Terms of this exchange offer:
We will exchange all outstanding 6.875% Notes, Series B that are validly
tendered and not withdrawn prior to the expiration of this exchange offer.
You may withdraw tenders of 6.875% Notes, Series B at any time prior to
the expiration of this exchange offer.
This exchange of notes will not be a taxable exchange for U.S. federal
income tax purposes, but you should see 'United States Federal Income Tax
Considerations' on page 37 for more information.
We will not receive any proceeds from this exchange offer.
The 6.875% Exchange Notes, Series B and the outstanding 6.875% Notes,
Series B evidence the same indebtedness and are substantially identical,
except that the 6.875% Exchange Notes, Series B have been registered under
the Securities Act and certain transfer restrictions and registration
rights relating to the 6.875% Notes, Series B do not apply to the 6.875%
Exchange Notes, Series B.
The Exchange Notes will be issued by Newcourt Credit Group Inc. The
Exchange Notes will be unconditionally guaranteed as to payment of principal,
premium, if any, and interest by AT&T Capital. The Exchange Notes are not
guaranteed or supported in any way by AT&T Corp. AT&T Capital is not owned by,
or an affiliate of, AT&T Corp.
------------------------
SEE 'RISK FACTORS' BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN RISKS
THAT YOU SHOULD CONSIDER PRIOR TO TENDERING YOUR NOTES.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this prospectus is October 15, 1999.
------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.................... 3
Where You Can Find More Information... 3
Financial Information................. 4
Recent Developments................... 4
Risk Factors.......................... 10
Use of Proceeds....................... 14
Newcourt.............................. 14
AT&T Capital.......................... 16
The Exchange Offer.................... 17
PAGE
----
Description of the Exchange Notes..... 25
Canadian Federal Income Tax
Considerations...................... 36
United States Federal Income Tax
Considerations...................... 37
ERISA Considerations.................. 37
Plan of Distribution.................. 38
Legal Matters......................... 39
Experts............................... 39
2
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
but may not contain all of the information that is important to you. This
prospectus includes specific terms of the notes we are offering, as well as
information regarding our business and detailed financial data. We encourage you
to read this entire prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Newcourt and AT&T Capital have filed with the Securities and Exchange
Commission a Registration Statement on Form F-4, under the Securities Act of
1933, with respect to the securities and the guarantee of the securities offered
by this prospectus. This prospectus, which constitutes a part of the
Registration Statement, does not contain all the information included in the
Registration Statement. You may read copies of the Registration Statement and
the exhibits, without charge, at the SEC's offices, or obtain copies of these
documents from the SEC's Public Reference Section, by paying the copying fees.
Statements made in this prospectus concerning the provisions of any
contract, agreement or other document referred to are not necessarily complete.
This prospectus incorporates by reference important business and financial
information about Newcourt and AT&T Capital that is not included in or delivered
with this prospectus. You are urged to read each referenced contract, agreement
or other document in its entirety. All the documents are filed as exhibits to
the Registration Statement or to documents incorporated by reference in this
prospectus.
Newcourt has elected to 'incorporate by reference' into this prospectus
other documents filed with the SEC by Newcourt. As allowed by the SEC, the
documents incorporated by reference into this document are considered part of
this document. Newcourt and AT&T Capital can disclose important information to
you in this document by referring to these other documents.
Newcourt is subject to the information and reporting requirements of the
Securities Exchange Act of 1934. Newcourt files periodic reports and other
information with the SEC. You may read these reports and other information filed
by Newcourt, without charge, or obtain copies for a fee, from the SEC's Public
Reference Section. Please call the SEC at 1-800-SEC-0330 for more information on
the public reference rooms. You can also find many of these documents on the
SEC's web site at http://www.sec.gov.
Newcourt incorporates by reference the following documents previously filed
with the SEC (File No. 061-14604) and any future filings it will make with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this prospectus:
Newcourt's Annual Report on Form 40-F for the year ended December 31,
1998;
Newcourt's audited consolidated financial statements and the auditors'
report thereon for the fiscal years ended December 31, 1998 and 1997 on
Form 6-K dated February 26, 1999;
Newcourt's Management Information Circular of Newcourt dated
February 26, 1999, except the sections entitled 'Governance and
Compensation Committee,' 'Report on Executive Compensation,' 'Corporate
Governance' and the 'Share Performance Graph' on Form 6-K;
Newcourt's Form 6-K filed March 8, 1999;
Newcourt's Form 6-K filed March 12, 1999;
Newcourt's Form 6-K filed March 18, 1999;
Newcourt's Form 6-K filed April 6, 1999;
Newcourt's Form 6-K filed April 22, 1999;
Newcourt's unaudited interim financials for the three month period
ending March 31, 1999 on Form 6-K filed May 5, 1999;
Newcourt's Form 6-K filed June 15, 1999;
Newcourt's unaudited interim financials for the six month period ending
June 30, 1999 on Form 6-K filed August 5, 1999;
Newcourt's Form 6-K filed August 5, 1999;
3
Newcourt's Form 6-K filed August 9, 1999;
Newcourt's Form 6-K filed September 10, 1999; and
Newcourt's proxy statement relating to the pending
Newcourt/CIT combination on Form 6-K filed October 15, 1999.
AT&T Capital was previously subject to the information and reporting
requirements of the Exchange Act. However, AT&T Capital is no longer required to
file those reports and information. Summarized financial information concerning
the company will be included in a footnote to the financial statements contained
in Newcourt's Exchange Act reports.
Information in this prospectus supersedes information incorporated by
reference that AT&T Capital or Newcourt filed with the SEC before the date of
this prospectus. Information AT&T Capital or Newcourt files later with the SEC
will automatically update and, in some cases, supersede this information.
Copies of the above documents of AT&T Capital or Newcourt may be obtained
upon request without charge from Newcourt Credit Group Inc., 207 Queens Quay
West, Suite 700, Toronto, Ontario, Canada M5J 1A7 (Telephone Number
416-507-2400), attention: Communications Department. TO OBTAIN TIMELY DELIVERY,
YOU MUST REQUEST THE DOCUMENTS NO LATER THAN NOVEMBER 10, 1999.
FINANCIAL INFORMATION
Dollar amounts included in this prospectus or incorporated by reference
into this prospectus are in either United States dollars ('U.S. $' or '$') or
Canadian dollars ('C$').
Our consolidated financial statements included in this prospectus and in
our reports filed pursuant to the Exchange Act are prepared in accordance with
accounting principles generally accepted in Canada ('Canadian GAAP').
Differences between Canadian GAAP and accounting principles generally accepted
in the United States ('U.S. GAAP') as they affect our financial statements are
explained in a note to our audited consolidated financial statements
incorporated by reference into this prospectus. On January 1, 1999, we began
reporting our financial results in U.S. dollars.
RECENT DEVELOPMENTS
On March 8, 1999, Newcourt announced that it had entered into an Agreement
and Plan of Reorganization with The CIT Group, Inc. pursuant to which the
outstanding common shares of Newcourt will be converted into either common stock
of The CIT Group, Inc. or, in the case of shares held by Canadian residents who
so elect, into a new class of stock exchangeable into common stock of The CIT
Group, Inc. and Newcourt will become a wholly-owned subsidiary of The CIT Group,
Inc. On June 15, 1999, Newcourt and The CIT Group, Inc. announced that they had
entered into an Amendment to the Agreement and Plan of Reorganization. On
August 5, 1999, Newcourt and The CIT Group, Inc. announced that they had revised
their agreement and had entered into an Amended and Restated Agreement and Plan
of Reorganization. Completion of the transaction is subject to a number of
conditions set forth in the Agreement and Plan of Reorganization, as amended and
restated, which is on file with the SEC and which is incorporated by reference
herein. The preceding description of the Agreement and Plan of Reorganization,
as amended and restated, is qualified in its entirety by reference to the full
and complete text of the agreement and we recommend reading the agreement. The
parties cannot be certain whether the transaction contemplated by the Agreement
and Plan of Reorganization, as amended and restated, will be completed in
accordance with the terms thereof. See 'Newcourt -- Announced Acquisition of
Newcourt' herein. Additionally, you should not assume that The CIT Group, Inc.
will guarantee the notes offered hereby if the business combination transaction
with The CIT Group, Inc. is completed.
NEWCOURT
OVERVIEW
Newcourt was formed in 1984 as an investment bank which originated and
structured asset based financings for the corporate and institutional asset
finance market and syndicated such financings to Canadian financial
institutions. In 1988, Newcourt broadened its activities to include vendor and
direct equipment financing. Today, Newcourt is one of the world's largest
providers of vendor finance and one of the world's largest non-bank commercial
asset finance companies, having
4
approximately U.S. $24.6 billion (C$36.2 billion) of owned and managed assets
and U.S. $3.1 billion (C$4.6 billion) shareholders' equity at June 30, 1999.
Newcourt provides asset-based sales and inventory financing for a variety
of equipment to both vendors and customers through Newcourt Financial, its
commercial finance business. Newcourt also provides asset-based financing for
high value assets and related advisory services through Newcourt Capital, its
corporate finance business. Newcourt originates asset finance business through
innovative financing techniques and provides focused client services and
complementary product offerings. Newcourt characterizes its risk management
culture as conservative and has a solid credit underwriting performance.
Newcourt's international origination and servicing capabilities span
twenty-six countries around the globe. Newcourt serves clients in Canada, the
United States, the United Kingdom, the Asia/Pacific region, Europe, Mexico and
South America.
Newcourt's long-term debt is rated 'Baa3' by Moody's Investors Services
Inc. and 'BBB' by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies.
Newcourt's principal executive offices are located at: Newcourt Centre, 207
Queens Quay West, Suite 700, Toronto, Ontario M5J1AF, telephone number (416)
507-2400.
AT&T CAPITAL
AT&T Capital, an indirect wholly-owned subsidiary of Newcourt, is a
full-service, diversified equipment leasing and finance company that operates
principally in the United States. AT&T Capital, through its various
subsidiaries, leases and finances a wide variety of equipment, including
telecommunications equipment (such as private branch exchanges, telephone
systems and voice processing units), information technology equipment (such as
personal computers, retail point of sale systems and automated teller machines),
general office, manufacturing and medical equipment and transportation
equipment. In addition, AT&T Capital provides franchise financing for
franchisees and financing collateralized by real estate.
AT&T Capital's principal executive offices are located at: 2 Gatehall
Drive, Parsippany, New Jersey 07054 and its telephone number is (973) 606-3500.
AT&T Capital's long-term debt is rated 'A - ', 'BBB+', 'Baa3' and 'BBB' by
Duff & Phelps Credit Rating Company, Fitch IBCA, Inc., Moody's Investors
Services Inc. and Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, respectively.
RISK FACTORS
You should consider carefully all of the information set forth in this
prospectus. In particular, you should consider the specific factors set forth
under 'Risk Factors' before deciding to tender your notes in the exchange offer.
THE EXCHANGE OFFER
Securities Offered........................... We are offering up to $1,000,000,000 aggregate
principal amount of 6.875% Exchange Notes, Series B
due February 16, 2005, which have been registered
under the Securities Act of 1933. The Exchange Notes
evidence the same indebtedness as the notes you
currently own and have substantially identical terms,
except that some transfer restrictions and
registration rights relating to the notes you
currently own do not apply to the Exchange Notes.
The Exchange Offer........................... We are offering to issue the Exchange Notes in
exchange for the notes you currently own on a
dollar-for-dollar basis. The notes you currently own
were not registered with the SEC. We are offering to
issue the Exchange Notes to satisfy our obligations
contained in the registration rights agreement
entered into when the notes you currently own were
originally sold by us. You may take part in this
exchange offer by following the
5
procedures described in this prospectus under the
heading 'The Exchange Offer.'
Expiration Date.............................. This exchange offer will expire at 5:00 p.m., New
York City time, on November 17, 1999, unless we
extend it.
Tenders...................................... If you decide to exchange your notes for Exchange
Notes, you must acknowledge that you are not engaging
in, and do not intend to engage in, a distribution of
your new Exchange Notes.
Withdrawal................................... If you decide to exchange your notes, you may change
your mind and choose not to take part in this
exchange offer at any time prior to November 17,
1999. If we decide for any reason not to accept any
notes you currently own for exchange, your notes will
be returned without expense to you promptly after the
expiration or termination of this exchange offer.
Conditions to the Exchange Offer............. The exchange offer is subject to some conditions,
which we may waive. Please read the section 'The
Exchange Offer -- Conditions to the Exchange Offer'
of this prospectus for more information regarding
conditions to this exchange offer.
United States Federal Income Tax
Considerations............................. Your exchange of the notes you currently own for
Exchange Notes will not result in any gain or loss to
you for United States federal income tax purposes.
See 'United States Federal Income Tax Considerations'
section of this prospectus.
Procedures for Tendering Old Notes........... See the procedures described in this prospectus under
the heading 'The Exchange Offer -- General
Procedures.'
Use of Proceeds.............................. We will receive no proceeds from the exchange of
notes for Exchange Notes. For more details, see 'Use
of Proceeds' section.
Exchange Agent............................... The Chase Manhattan Bank, trustee for the notes, is
the exchange agent for this exchange offer. The Chase
Manhattan Bank's address and telephone number are set
forth under the heading 'The Exchange Offer --
Exchange Agent.'
No Dissenters' or Appraisal Rights........... Holders of notes will not have dissenters' rights or
appraisal rights in connection with this exchange
offer. See 'The Exchange Offer -- Appraisal Rights.'
CONSEQUENCES OF NOT EXCHANGING NOTES
If you do not exchange your notes for the Exchange Notes, you will continue
to be subject to restrictions on transfer of your notes. The restrictions on
transfer of your notes exist because we issued the notes you currently own
pursuant to exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and state securities laws. In general, you
may only offer or sell the notes you currently own if they are registered under
the Securities Act and state securities laws, or offered and sold pursuant to an
exemption from those requirements. We do not intend to register the notes you
currently own under the Securities Act.
In addition, if you take part in this exchange offer for the purpose of
participating in a distribution of your new Exchange Notes, your Exchange Notes
may be treated as restricted securities. If so, you will be required to comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale of your Exchange Notes. To the extent notes are
tendered and accepted by us, any trading market for the notes you currently own
would be adversely affected.
6
SUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The Exchange Notes and the notes you currently own evidence the same
indebtedness and are identical in all material respects, except that the
Exchange Notes are registered with the Securities and Exchange Commission and
the transfer restrictions and registration rights relating to the notes you
currently own do not apply to the Exchange Notes.
Securities Offered........................... We are offering up to $1,000,000,000 aggregate
principal amount of 6.875% Exchange Notes, Series B
due February 16, 2005.
Guaranty..................................... The payment of principal, premium, if any, and
interest on the Exchange Notes is guaranteed by AT&T
Capital. AT&T Capital is not owned by, and is not
affiliated with, AT&T Corp.
Maturity Date................................ February 16, 2005.
Interest Payment Dates....................... February 16 and August 16, beginning August 16, 1999.
Ranking and Security......................... The Exchange Notes will be unsecured obligations of
Newcourt. The Exchange Notes will rank equally in
right of payment with all other unsecured and
unsubordinated indebtedness of Newcourt.
Redemption................................... We do not have the option to redeem the Exchange
Notes and the holders of the Exchange Notes will not
have the option to request repayment of the Exchange
Notes prior to February 16, 2005.
Certain Covenants............................ The indenture under which we are issuing the Exchange
Notes contains covenants restricting or limiting our
ability to, among other things:
merge or consolidate with other companies,
sell substantially all of our assets, or
incur some types of liens.
Registration Rights.......................... You will not be entitled to any registration rights
in connection with the Exchange Notes.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited historical ratios of earnings
to fixed charges for Newcourt for the six month period ended June 30, 1999 and
for the years ended December 31, 1994 through 1998.
HISTORICAL(1)
FOR THE SIX YEAR ENDED
MONTHS ENDED DECEMBER 31,
JUNE 30, --------------------------------
1999(1) 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges............... 1.39 1.47 1.11 1.60 1.53 1.55
- ------------
(1) Calculated under Canadian GAAP, earnings before income taxes and cumulative
effect on prior years of accounting change plus fixed charges (the sum of
interest on indebtedness and the portion of rentals representative of the
interest factor) divided by fixed charges.
7
The following table sets forth the unaudited historical ratios of earnings
to fixed charges for AT&T Capital for the six months ended June 30, 1999 and for
the years ended December 31, 1994 through 1998.
HISTORICAL(1)
FOR THE SIX YEAR ENDED
MONTHS ENDED DECEMBER 31,
JUNE 30, --------------------------------
1999(1) 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges............... 1.25 1.35 1.07 1.60 1.50 1.62
- ------------
(1) Calculated under U.S. GAAP, earnings before income taxes and cumulative
effect on prior years of accounting change plus fixed charges (the sum of
interest on indebtedness and the portion of rentals representative of the
interest factor) divided by fixed charges. Fixed charges do not include
distributions on company-obligated preferred securities of the company's
subsidiaries. Prior to October 1, 1996, a portion of the company's
indebtedness to AT&T Corp. did not bear interest.
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF NEWCOURT
The following selected financial information has been derived from the
consolidated financial statements of Newcourt for the six months ended June 30,
1999 and 1998 and for the five years ended December 31, 1998. The information
should be read in conjunction with the consolidated financial statements and
accompanying notes which are contained in Newcourt's Annual Report filed on
Form 40-F for the year ended December 31, 1998, incorporated into this
prospectus.
SELECTED SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)(1)
FOR THE SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------------------
1999(9)(10) 1998(8) 1998(2)(8) 1997(8) 1996(8) 1995(8) 1994(8)
----------- ------- ---------- ------- ------- ------- -------
$ $ $ $ $ $ $
INCOME STATEMENT DATA
Securitization and syndication
fees.......................... $ 154,168 $ 127,749 $ 291,300 $ 121,668 $ 56,380 $ 28,589 $ 22,124
Net income from affiliated
companies and management
fees.......................... $ 171,818 $ 67,526 $ 148,630 $ 29,154 $ 20,422 $ 11,663 $ 5,599
Net finance income.............. $ 206,928 241,551 $ 525,612 $ 54,346 $ 33,752 $ 19,127 $ 10,264
----------- ----------- ----------- ---------- ---------- ---------- --------
Total asset financial income.... $ 532,914 $ 436,826 $ 965,542 $ 205,168 $ 110,555 $ 59,379 $ 37,987
Operating income................ $ 162,885 $ 120,372 $ 304,170 $ 76,719(3) $ 41,332 $ 23,477 $ 15,856
Net income...................... $ 97,731 $ 72,256 $ 189,661 $ 23,466 $ 32,654 $ 18,946 $ 12,072
Earnings per Common and Special
Share(4)(5)(6)................ $ 0.66 $ 0.52 $ 1.33 $ 0.86(3) $ 0.62 $ 0.49 $ 0.39
Fully diluted earnings per
Common and Special
Share(6)(7)................... $ 0.66 $ 0.52 $ 1.33 $ 0.34 $ 0.62 $ 0.49 $ 0.39
AS AT JUNE 30, AS AT DECEMBER 31,
------------------------- ----------------------------------------------------------------
1999(9)(10) 1998(8) 1998(2)(8) 1997(8) 1996(8) 1995(8) 1994(8)
----------- ------- ---------- ------- ------- ------- -------
$ $ $ $ $ $ $
BALANCE SHEET DATA (8)
Total assets.................... $15,631,455 $12,499,607 $15,352,957 $3,983,717 $1,426,078 $ 876,305 $472,897
Debt............................ $11,846,438 $ 8,607,684 $11,607,184 $1,797,478 $1,025,742 $ 684,189 $333,026
Shareholders' equity(4)(5)...... $ 3,102,656 $ 2,905,930 $ 3,018,305 $1,972,520 $ 332,416 $ 157,978 $103,709
8
SELECTED SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT PER SHARE AMOUNTS)(1)
FOR THE SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------------- --------------------------------------------------------
1999(9)(10) 1998 1998(2) 1997 1996 1995 1994
----------- ---- ------- ---- ---- ---- ----
C$ C$ C$ C$ C$ C$ C$
INCOME STATEMENT DATA
Securitization and syndication
fees............................ $ 230,067 $ 198,275 452,119 188,837 87,506 44,372 34,338
Net income from affiliated
companies and management fees... $ 256,407 $ 104,805 230,685 45,249 31,697 18,102 8,690
Net finance income................ $ 308,802 $ 374,904 815,787 84,349 52,386 29,686 15,930
----------- ----------- ---------- --------- --------- --------- -------
Total asset financial income...... $ 795,275 $ 677,984 1,498,591 318,435 171,589 92,160 58,958
Operating income.................. $ 243,076 186,824 472,093 119,074(3) 64,150 36,438 24,610
Net income........................ $ 145,845 $ 112,144 294,367 36,421 50,681 29,405 18,737
Earnings per Common and Special
Share(4)(5)(6).................. $ 0.98 $ 0.81 2.06 1.33(3) 0.96 0.76 0.60
Fully diluted earnings per Common
and Special Share(6)(7)......... $ 0.98 $ 0.81 2.06 0.52 0.96 0.76 0.60
AS AT JUNE 30, AS AT DECEMBER 31,
------------------------- --------------------------------------------------------
1999(9)(10) 1998 1998(2) 1997 1996 1995 1994
----------- ---- ------- ---- ---- ---- ----
C$ C$ C$ C$ C$ C$ C$
BALANCE SHEET DATA
Total assets...................... $23,058,644 $19,400,291 23,828,895 6,183,016 2,213,376 1,360,088 733,970
Debt.............................. $17,475,200 $13,359,745 18,015,185 2,789,816 1,592,026 1,061,911 516,881
Shareholders' equity(4)(5)........ $ 4,573,345 $ 4,510,213 4,684,627 3,061,493 515,934 245,194 160,964
- ------------
(1) Certain amounts have been reclassified to conform to the presentation
adopted in the current year.
(2) The increase in the amounts reflected in the selected financial information
for 1998 as compared to 1997 was primarily attributable to the inclusion of
AT&T Capital Corporation, which was acquired by Newcourt in 1998.
(3) Before pre-tax restructuring charges of U.S. $66.4 million (C$103.0
million).
(4) Based on the weighted average number of Common Shares and Special Shares
outstanding during the period.
(5) On November 30, 1995, 1,611,000 Special Shares were converted into
1,611,000 Common Shares. On December 27, 1995, 1,411,675 Special Shares
were converted into 1,411,675 Common Shares. On July 2, 1996, the remaining
199,325 Special Shares were converted into 199,325 Common Shares. On
December 11, 1995, Newcourt redeemed and cancelled all issued and
outstanding Preference Shares.
(6) Effective April 14, 1997, Newcourt subdivided on a two-for-one basis all of
Newcourt's issued and outstanding Common Shares and all of Newcourt's
Common Shares reserved for issuance. The Selected Summary Financial
Information set out in the above table has been adjusted to reflect the
stock split.
(7) Based on the weighted average number of Common Shares and Special Shares
outstanding during the period after giving effect to the exercise of
outstanding stock options and any other dilutive item.
(8) Since Newcourt had adopted the U.S. dollar as its reporting currency
effective January 1, 1999, Newcourt's historical financial information has
been converted to U.S. dollars using the December 31, 1998 exchange rate of
.6443. As of October 14, 1999, the Canadian to U.S. dollar exchange rate
was 0.6752.
(9) Since Newcourt had adopted the U.S. dollar as its reporting currency
effective January 1, 1999, the selected financial data regarding the income
statement and earnings per share data; total assets and debt; and
shareholders' equity has been converted to Canadian dollars using the six
month weighted average exchange rate of 0.6701; the June 30th exchange rate
of 0.6779 and the historical exchange rate, respectively. As of
October 14, 1999, the Canadian to U.S. dollar exchange rate was 0.6752.
(10) In March 1999, Newcourt recorded a one-time pre-tax gain of U.S. $56.6
million (C$85.9 million) arising from its unwinding of certain currency
hedges no longer required following the change in Newcourt's reporting
currency to U.S. dollars from Canadian dollars. During the second quarter,
Newcourt realized a one time pre-tax gain of U.S. $34.3 (C$50.5) from the
sale of its automobile fleet leasing business in Canada and the U.K.
9
RISK FACTORS
You should give careful consideration to the following risk factors, in
addition to the other information included or incorporated by reference in this
prospectus. To the extent any of the information in this prospectus constitutes
a 'forward-looking statement' for purposes of Section 21E of the Exchange Act or
Section 27A of the Securities Act, the risk factors set forth below are
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those anticipated in forward-looking
statements. We cannot be certain that our actual results will not materially
differ from those anticipated in forward-looking statements contained in this
prospectus.
Before you participate in this exchange offer, you should be aware that
there are various risks, including the ones listed below. You should carefully
consider these risk factors, as well as other information contained in this
prospectus in evaluating your participation in the exchange offer.
PENDING COMBINATION WITH THE CIT GROUP, INC. COULD DISTRACT NEWCOURT FROM ITS
BUSINESS AND RESULT IN LOSS OF PERSONNEL AND DISRUPTION OF OPERATIONS
Newcourt has entered into an agreement providing for a business combination
with The CIT Group. See 'Prospectus Summary -- Recent Developments.' Although we
are not certain that the proposed business combination of CIT and Newcourt will
be completed, preparing for the completion of this combination and, if
completed, integration of Newcourt and The CIT Group will require a substantial
amount of management's time. Diversion of management attention from Newcourt's
existing business as well as problems that may arise in connection with the
integration of Newcourt's and The CIT Group's operations may have a material
adverse impact on Newcourt's revenues and results of operations. The integration
of Newcourt and The CIT Group may result in additional expenses which could
negatively impact Newcourt's results of operations. Further, the uncertainty
created by the combination may result in the loss of management and other
employees. The unavailability of these people and the resulting disruption in
Newcourt's operations could have a material adverse effect on Newcourt's
business. See 'Newcourt -- Announced Acquisition of Newcourt.'
The proposed transaction involves the integration of two companies that
have different corporate cultures and that have previously operated
independently. In addition, the composition of the combined company's management
will be new. The success of the combined company will depend to a significant
degree on the compatability of key executives and its ability to retain
highly-skilled personnel. It is not certain that the two companies will be able
to integrate their operations without encountering difficulties, including
incompatability of key executives, the loss of key employees and customers, the
disruption of our respective ongoing businesses or possible inconsistencies in
systems, standards, procedures and policies.
NEWCOURT'S AND AT&T CAPITAL'S AVAILABILITY AND COST OF FUNDS FOR OPERATION OF
THEIR BUSINESS MAY SUFFER ADVERSELY DUE TO FACTORS BEYOND THEIR CONTROL
Each of Newcourt's and AT&T Capital's business requires substantial amounts
of cash to support growth and operations. Any number of factors which are beyond
our control, such as credit ratings, interest rates, general economic conditions
and the perception of Newcourt's and AT&T Capital's business, results of
operations, leverage, financial condition and business prospects, may affect the
ability of Newcourt and AT&T Capital to obtain funds and the cost of these
funds. Further, each of Newcourt and AT&T Capital may now, or in the future
become, subject to restrictions as a result of our participation in other debt
financing transactions. These restrictions might also affect the amount of cash
available to us to operate our respective businesses. While Newcourt and AT&T
Capital each continue to obtain new sources of funding, we cannot be certain
that cash in an amount sufficient to fund the operations of our respective
businesses will always be available.
NEWCOURT'S AND AT&T CAPITAL'S BUSINESS MAY SUFFER ADVERSELY UPON ANY DOWNGRADE
IN THEIR DEBT RATINGS
Newcourt's long-term debt is rated 'Baa3' by Moody's Investors Services
Inc. and 'BBB' by Standard & Poor's Ratings Services. AT&T Capital's long-term
debt is rated 'A - ,' 'BBB+,' 'Baa3' and 'BBB' by Duff & Phelps Credit Rating
Co., Fitch IBCA, Inc., Moody's Investors Services Inc. and Standard & Poor's
Ratings Services, respectively. We cannot be certain that any of these ratings
agencies will not, at any time, change these ratings. In the event any ratings
were lowered, this downgrading would: (1) result in relatively higher borrowing
costs, (2) reduce access to traditional funding sources and (3) reduce
competitiveness, particularly if any such assigned rating is in a generic rating
category that signifies that the debt is less than investment grade. In
addition, if our debt ratings are downgraded to ratings below investment grade,
such downgrading could result in the termination of our Lucent agreement. Any
such downgrading could have an adverse effect on Newcourt's or AT&T Capital's
business and a negative impact on the value of the Exchange Notes offered by
this prospectus.
NEWCOURT AND AT&T CAPITAL DEPEND ON SECURITIZATION PROGRAMS TO PROVIDE FINANCING
AND MAY SUFFER ADVERSE FINANCIAL CONSEQUENCES UPON ANY DELAY OR DECREASE IN
THEIR ABILITY TO FINANCE ASSETS THROUGH SECURITIZATION PROGRAMS
Newcourt and AT&T Capital each sell financial assets ('securitizations')
and retain an interest in those financial assets. Our securitization
transactions are structured as both private conduit programs and the sale of
publicly offered securities. These transactions allow each of Newcourt and AT&T
Capital to record securitization gains, manage its respective leverage ratio and
to transfer credit risk. Any delay or decrease in the sale of finance assets
and/or an increase in the actual defaults from that expected may cause
Newcourt's and AT&T Capital's net income and leverage to be adversely affected.
Any delay in the securitization of finance receivables may cause
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leverage to fluctuate, postpone the recognition of the gain on such finance
receivables and cause our net income to fluctuate from period to period.
NEWCOURT AND AT&T CAPITAL OPERATE IN A HIGHLY COMPETITIVE INDUSTRY AND COMPETE
AGAINST ENTITIES WITH SUBSTANTIAL CAPITAL AND RESOURCES
The equipment leasing and finance industry in which Newcourt and AT&T
Capital operate is highly competitive and is undergoing a process of
consolidation. As a result, certain of our competitors' relative cost bases have
been reduced. We compete with these companies through price (including the
ability to control costs), risk management, innovation and customer services.
Principal cost factors include the cost of funds, the cost of selling to or
obtaining new end-user customers and vendors and the cost of managing
portfolios.
Our competitors include captive or related leasing companies (such as
General Electric Capital Corporation and IBM Credit Corporation), independent
leasing companies (such as Comdisco, Inc.), certain banks engaged in leasing,
lease brokers and investment banking firms that arrange for the financing of
leased equipment, and manufacturers and vendors which lease their own products
to customers. In addition, we compete with all banking and other financial
institutions, manufacturers, vendors and others who extend or arrange credit for
the acquisition of equipment and in a sense, with end-users' available cash
resources to purchase equipment that Newcourt or AT&T Capital may otherwise
finance. Many of our competitors are large companies that have substantial
capital, technological and marketing resources; some of these competitors are
significantly larger than we are and have access to borrowings at a lower cost
than we do. In addition, we may not have, in the immediate future, access to
sufficient U.S. federal tax capacity to pursue efficiently U.S. tax based lease
financing.
CHANGES IN RELATIONSHIPS WITH MAJOR VENDORS COULD ADVERSELY AFFECT RESULTS OF
OPERATIONS
A significant portion of Newcourt's and/or AT&T Capital's consolidated net
income is attributable to the financing provided by major vendor relationships,
including those with Lucent Technologies, Inc., Dell Corporation, Snap-on
Incorporated, Western Star Trucks Inc. and Yamaha Corporation, with respect to
products manufactured or distributed by them and, to a lesser extent, to Lucent
as an end-user, primarily with respect to the lease of information technology
and other equipment or vehicles.
Newcourt's and AT&T Capital's commercial relationships with these and other
major vendors are governed by formal agreements. Although Newcourt and AT&T
Capital intend to seek to maintain and improve their existing relationships with
these and other major vendors, we cannot be certain that any agreement with
these and other major vendors will be extended beyond their respective
termination dates. Further, if they are extended, we cannot be certain that the
terms and conditions of future agreements with our major vendors will be as
beneficial to Newcourt and AT&T Capital. If we fail to renew any of those
agreements or change the terms of the agreements with our major vendors, this
may have a material adverse effect on Newcourt and AT&T Capital.
In addition, these agreements may contain provisions which allow these
vendors to terminate their respective agreement. The agreement with Lucent
contains provisions which allow Lucent to terminate the agreement prior to its
termination date. If the agreement with Lucent is terminated, the results of
operations of Newcourt and AT&T Capital could be adversely affected.
NEWCOURT AND AT&T CAPITAL HAVE UNLIMITED LIABILITY UNDER GUARANTEES ISSUED
NEWCOURT GUARANTEE. Newcourt has fully and unconditionally guaranteed (the
'Newcourt Guarantee') the payment of any present and future principal,
indebtedness for borrowed money incurred by AT&T Capital or by any other person
whose debts AT&T Capital has guaranteed, except for (1) any indebtedness for
borrowed money where the terms of that indebtedness specifically provide that
repayment is not guaranteed by Newcourt; and (2) any indebtedness, (a) for
borrowed money secured by liens on, or payable solely from the income and
proceeds of,
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any property of AT&T Capital or any of its subsidiaries and (b) which is not a
general obligation of AT&T Capital.
Newcourt's liability under the Newcourt Guarantee is unlimited in amount
and absolute and unconditional in that defenses based on the lack of validity or
the unenforceability of the AT&T Capital debt or any defense or counterclaim
available to AT&T Capital will not be available to Newcourt. Because Newcourt
expects to guarantee future AT&T Capital debt, as well as amendments,
supplements, restatements or replacements of existing AT&T Capital debt, the
total outstanding principal amount of AT&T Capital debt to be guaranteed by
Newcourt is expected to increase in the future. The aggregate principal amount
of AT&T Capital debt was U.S. 8.9 billion (C$13.2 billion) as of June 30, 1999.
AT&T CAPITAL GUARANTEE. In connection with Newcourt's acquisition of AT&T
Capital, AT&T Capital guaranteed the payment of certain indebtedness and
liquidity facilities issued, guaranteed or entered into by Newcourt for the
benefit of the holders of the Newcourt debt securities. The amount of Newcourt
debt securities covered by AT&T Capital's guarantee was U.S. $2.3 billion
(C$3.4 billion) at June 30, 1999. Because AT&T Capital's guarantee covers
Newcourt's future indebtedness in addition to the current Newcourt debt
securities, the aggregate outstanding principal amount of the Newcourt debt
securities to be covered by AT&T Capital's guarantee is expected to increase in
the future.
The liability of AT&T Capital under AT&T Capital's guarantee is unlimited
in amount and absolute and unconditional in that defenses based, among other
things, on the lack of validity or the unenforceability of the Newcourt debt
securities or any defense or counterclaim available to Newcourt will not be
available to AT&T Capital.
AT&T CAPITAL'S GUARANTEE MAY BE VOIDABLE BY A BANKRUPTCY COURT
As stated above, AT&T Capital, Newcourt's subsidiary, will guarantee the
repayment of the Exchange Notes. If a court in a lawsuit by an unpaid creditor
or representative of creditors of AT&T Capital were to find that, at the time
AT&T Capital issued its guarantee, AT&T Capital was insolvent, or was rendered
insolvent by reason of the incurrence of its obligation under the guarantee, was
engaged in a business or transaction for which its remaining unencumbered assets
constituted unreasonably small capital, or that AT&T Capital intended to incur,
or believed that it would incur, debts beyond its ability to pay as such debts
matured or intended to hinder, delay, or defraud its creditors, such court
could, under state or federal fraudulent transfer law, avoid the guarantee and
order that any payments made by AT&T Capital pursuant to the guarantee be
returned to AT&T Capital or to a fund for the benefit of its creditors. A court
could also subordinate the guarantee to all existing and future indebtedness of
AT&T Capital, the effect of which would be to entitle AT&T Capital's other
creditors to be paid in full before any payment could be made on AT&T Capital's
guarantee of the Exchange Notes. Newcourt and AT&T Capital believe that the
issuance of the guarantee by AT&T Capital will not render AT&T Capital
insolvent; however, we are not certain that a court would agree with that belief
or that a court would not void AT&T Capital's guarantee on grounds other than
insolvency.
ALLOWANCE FOR CREDIT LOSSES MAY NOT BE ADEQUATE; ESTIMATED RESIDUAL VALUES MAY
NOT BE REALIZED
In connection with origination of finance receivables, capital leases and
operating leases, Newcourt and AT&T Capital are subject to the risk that our
allowances for credit losses may not be enough to cover ultimate losses. If our
allowance is not adequate to cover our credit losses actually incurred,
Newcourt's and AT&T Capital's results of operations and financial condition may
be materially adversely affected. In addition, the estimated residual values may
not be realized at the end of the lease terms and realization of these residual
values has historically been a significant element of the net income of AT&T
Capital. If Newcourt and/or AT&T Capital fail to realize the estimated residual
values, their results of operations and financial constitution may be materially
adversely affected.
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NEWCOURT IS SUBJECT TO SIGNIFICANT FOREIGN CURRENCY EXCHANGE RISK
Newcourt operates in twenty-six countries and, as a result, is subject to
the effects of fluctuations in foreign currency exchange rates. If these foreign
currency exchange rates move adverse to Newcourt's reporting currency, it could
have a material adverse impact on Newcourt's financial position and results of
operations.
UNCERTAINTY AS TO READINESS FOR YEAR 2000 AND POTENTIAL ADVERSE EFFECT ON
FINANCIAL PERFORMANCE
The 'Year 2000 issue' arises from widespread use of computer programs that
rely on two-digit date codes to perform computations or decision-making
functions. Newcourt and AT&T Capital are addressing the Year 2000 issue from a
global perspective. In early 1998, we established a global Year 2000 Program
Office to provide oversight from both a business and technical perspective. The
program coordinates vendors, consultants and regional Year 2000 resources. We
converted our critical systems in 1998. We will convert remaining systems and
conduct compliance testing and certification in 1999. We plan to consolidate our
operations onto a limited set of identified Year 2000 compliant systems in order
to achieve operational efficiencies and to minimize any potential problems or
costs due to the Year 2000 issue. We do not anticipate that the total cost of
these Year 2000 compliance activities will be material to our financial position
or results of operations in any given year. However, we cannot be certain that
our compliance activities will be sufficient to address all possible effects of
the Year 2000 issue. Significant Year 2000 failures in Newcourt's or AT&T
Capital's systems or in the systems of third parties (or third parties upon whom
they depend) could have a material adverse effect on Newcourt's or AT&T
Capital's, respectively, financial condition and results of operations.
THERE IS NO PUBLIC MARKET FOR THE EXCHANGE NOTES
We do not intend to list the Exchange Notes on any securities exchange. The
notes you currently own are eligible for trading in the PORTAL market of the
National Association of Securities Dealers, Inc. Market making activity, if any,
may be limited during the exchange offer.
13
THE CONSEQUENCE OF FAILURE TO EXCHANGE YOUR NOTES FOR EXCHANGE NOTES IS
CONTINUED RESTRICTIONS ON YOUR ABILITY TO RESELL YOUR NOTES
If you do not exchange your notes for the Exchange Notes pursuant to the
exchange offer, you will continue to be subject to restrictions on transfer of
your notes. The restrictions on transfer of your notes arise because we issued
the notes pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, you may only offer or sell the notes if they are registered
under the Securities Act and applicable state securities laws, or offered and
sold pursuant to an exemption from such requirements. We do not intend to
register the notes under the Securities Act. In addition, if you exchange your
notes in the exchange offer for the purpose of participating in a distribution
of the Exchange Notes, you may be deemed to have received restricted securities
and, if so, will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. To the extent notes are tendered and accepted in the exchange
offer, the trading market, if any, for the notes would be adversely affected.
ENFORCEABILITY OF LIABILITIES AND SERVICE OF PROCESS
Newcourt is incorporated and has its principal executive office in Canada.
Some of its directors and officers reside outside the United States and a
material portion of their assets are located outside the United States. As a
result, it may be difficult for investors to effect service of process within
the United States upon Newcourt or such persons with respect to matters arising
under the Securities Act, or to enforce against them judgments of courts of the
United States whether or not predicated upon the civil liability provisions of
the federal securities or other laws of the United States or any state thereof.
Newcourt will irrevocably submit to the jurisdiction of any court sitting in the
State of New York with respect to any action or proceeding by a holder of Notes.
OTHER RISKS
You should carefully review the risk factors described in the other
documents we file from time to time with the Canadian securities regulatory
authorities and the SEC, including those risk factors set forth in Form 40-F
relating to our Annual Report to the Shareholders for the year ended
December 31, 1998.
USE OF PROCEEDS
Newcourt will not receive any proceeds from this exchange offer. We used
the net proceeds received from the offering of the notes (approximately U.S.
$990.6 million, after deducting the estimated expenses of the offering of the
notes) primarily to finance installment sale and lease agreements with respect
to direct financing programs and to repay some of our debts including Newcourt
debt securities as they became due.
NEWCOURT
BUSINESS
Newcourt possesses asset management and processing skills, systems
capabilities, a broad range of clients, a solid credit underwriting performance
and a consistent operating history. Newcourt originates asset finance business
through innovative financing techniques. We provide focused client services and
complementary product offerings. Newcourt has a conservative risk management
culture.
Newcourt has organized its activities and operations around three core
businesses: (1) Newcourt Financial; (2) Newcourt Capital; and (3) Newcourt
Services.
Newcourt Financial. Newcourt Financial, our commercial finance
business, provides asset-based sales and inventory financing for a
variety of equipment to both vendors and
14
customers. Newcourt Financial offers these services through select
strategic relationships with equipment manufacturers, dealers and
distributors and certain professional associations and organizations.
Newcourt Financial's strategy focuses on the creation, maintenance
and enhancement of vendor programs ensuring its position as the
premier provider of global asset based financial products.
Newcourt Financial focuses on the following sectors:
Transportation and Industrial Finance -- provides inventory and
term financing in North America in the transportation,
construction, industrial and fleet vehicle leasing
marketplaces;
Technology Finance -- provides direct and vendor financing in
North America to manufacturers, distributors and resellers of
information technology hardware and software and to their
customers;
Telecommunications Finance -- provides vendor financing in
North America to the telecommunication industry under an
exclusive international vendor program with Lucent Technologies
Inc.;
Business Finance -- provides asset-based sales and inventory
financing to vendors and customers in the commercial,
industrial, health care and retail finance markets in North
America;
Specialty Finance -- provides a variety of financial products
to the small business and health care markets in North America
through micro-balance leasing, government supported (SBA and
SBLA) programs and intermediary financial services;
Technology Services -- provides other Newcourt business units
with the ability to underwrite operating leases and rental
products for the information technology business sector; and
International/Joint Ventures and Operations -- provides
specialized support in Europe, Asia Pacific and Latin America
for Newcourt's established vendor programs and develops and
manages dedicated joint venture structures.
Newcourt Capital. Newcourt Capital is our corporate finance business
which provides asset-based financing for high value assets as well as
related advisory services. Newcourt Capital's customers include
equipment manufacturers, corporate clients, governments and public
sector agencies. Newcourt Capital works with a growing list of
international clients, including major corporations, governments and
agencies. Newcourt Capital focuses on the following sectors:
Aerospace Finance -- provides financial services in Canada, the
United States and Europe to both the commercial aviation
market, with an emphasis on the regional airline industry, and
the general aviation market, with an emphasis on the corporate
aircraft and helicopter market segments;
Rail Finance -- provides financing and advisory services to
railroads and industrial rail shippers in Canada and the United
States;
Public Sector Finance -- provides financing and advisory
services in Canada, the United Kingdom and internationally to
governments, public sector agencies and corporate clients in
the infrastructure and institutional health care sectors;
Project Finance -- provides limited or non-recourse project
specific financing for institutional and corporate clients in
North America and the United Kingdom;
Structured Finance -- provides structure financing services in
Canada, the United States and Europe, including cross-border
leases, single investor leases, synthetic leases and
off-balance sheet financings;
15
Media and Communications Finance -- provides debt financing
services to the communications market and various media sectors
in North America;
Business Finance -- provides financing in North America for
acquisitions, buy-outs and recapitalizations which are done in
conjunction with existing management teams and/or established
financial buyers of companies.
Newcourt Services. Newcourt Services is our service business
responsible for providing cost effective control, growth and support
services to Newcourt Financial and Newcourt Capital. Newcourt
Services consists of the following corporate functions: Treasury,
Credit and Risk Management, Financial Reporting and Administration,
Human Resources, Communications & Marketing, Tax Planning and
Compliance, Systems Development, and Quality Assurance.
Newcourt's long-term debt is rated 'Baa3' by Moody's Investors Services
Inc. and 'BBB' by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies.
ANNOUNCED ACQUISITION OF NEWCOURT
On March 8, 1999, Newcourt announced that it had entered into an Agreement
and Plan of Reorganization with The CIT Group, Inc. pursuant to which the
outstanding common shares of Newcourt will be converted into either common stock
of The CIT Group, Inc. or, in the case of shares held by Canadian residents who
so elect, into a new class of stock exchangeable into common stock of The CIT
Group, Inc. and Newcourt will become a wholly-owned subsidiary of The CIT Group,
Inc. On June 15, 1999, Newcourt and The CIT Group, Inc. announced that they had
entered into an Amendment to the Agreement and Plan of Reorganization. On
August 5, 1999, Newcourt and The CIT Group, Inc. announced that they had revised
their agreement and had entered into an Amended and Restated Agreement and Plan
of Reorganization. Completion of the transaction is subject to a number of
conditions set forth in the Agreement and Plan of Reorganization, as amended and
restated, which is on file with the SEC and is incorporated by reference
therein. This description of the Agreement and Plan of Reorganization, as
amended and restated, is qualified in its entirety by reference to the full and
complete text of the agreement.
The parties are not certain whether or when the transaction contemplated by
the Agreement and Plan of Reorganization, as amended and restated, will be
completed. We cannot be certain that the parties will be able to satisfy all of
the conditions to the completion of the acquisition of Newcourt by CIT specified
in the Agreement and Plan of Reorganization, as amended and restated, or that
the transaction will be completed in accordance with the terms of the agreement
with CIT.
Preparing for the consummation of this combination and, if completed,
integration of Newcourt and The CIT Group, Inc. will require a substantial
amount of management's time. Diversion of management attention from Newcourt's
existing business as well as problems that may arise in connection with the
integration of Newcourt's and The CIT Group, Inc.'s operations may have a
material adverse impact on Newcourt's revenues and results of operations. The
integration of Newcourt and The CIT Group may result in additional expenses
which could negatively impact Newcourt's results of operations. Further, the
uncertainty created by the combination may result in the loss of management and
other employees. The unavailability of such persons and the resulting disruption
in Newcourt's operations could have a material adverse effect on Newcourt's
business.
AT&T CAPITAL
AT&T Capital is a full-service, diversified equipment leasing and finance
company that operates principally in the United States and also has operations
in the Asia/Pacific region, Mexico and South America. AT&T Capital is one of the
largest equipment leasing and finance companies in the United States and is the
largest lessor of telecommunications equipment in the United States, in each
case, based on the aggregate value of equipment leased or financed.
16
AT&T Capital, a Delaware corporation, is a wholly owned subsidiary of
Newcourt Credit Group USA Inc., which in turn is a wholly owned subsidiary of
Newcourt. AT&T Capital, through certain of the originators, leases and finances
a wide variety of equipment, including telecommunications equipment (such as
private branch exchanges, telephone systems and voice processing units),
information technology equipment (such as personal computers, retail point of
sale systems and automated teller machines), general office, manufacturing and
medical equipment, and transportation equipment. In addition, the group provides
franchise financing for franchises and financing collateralized by real estate.
As of December 31, 1998, AT&T Capital consolidated portfolio assets (investment
in finance receivables, capital leases and operating leases) were comprised of,
or collateralized by, general equipment, information technology equipment,
telecommunications equipment, loans secured by real estate and transportation
equipment. AT&T Capital's leasing and financing services are marketed (i) to
customers of equipment manufacturers, distributors and dealers with which AT&T
Capital has a marketing relationship for financing services and (ii) directly to
end-users of equipment. AT&T Capital's approximately 500,000 customers include
large global companies, small and mid-sized businesses and federal, state and
local governments and their agencies.
As of June 30, 1999, AT&T Capital had, on a consolidated basis, total
assets of U.S. $10.4 billion, total liabilities of U.S. $9.5 billion and net
income for the six months ended June 30, 1999 of U.S. $50.8 million.
As of December 31, 1998, AT&T Capital had, on a consolidated basis, total
assets of U.S. $10.8 billion, total liabilities of U.S. $9.9 billion and net
income for the year ended December 31, 1998 of U.S. $97.5 million.
AT&T Capital was founded in 1985 by AT&T Corp. as a captive finance company
to assist AT&T Corp.'s equipment marketing and sales efforts by providing its
customers with sophisticated financing. AT&T Capital is no longer owned in part
or affiliated with AT&T Corp.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The sole purpose of this exchange offer is to fulfill our obligations with
respect to the registration of the notes.
We will keep this exchange offer open for at least 20 business days. If you
take part in this exchange offer, you will receive an Exchange Note in the same
principal amount as each note you surrender to us. Interest on each Exchange
Note will accrue from the last interest payment date on which interest was paid
on the tendered notes or, if no interest has been paid on the tendered note,
from the date of the original issue of the tendered note.
Under existing SEC interpretations, the Exchange Notes would in general be
freely transferable after the exchange offer without further compliance with the
registration and prospectus delivery requirements under the Securities Act.
However, any purchaser of the notes who is an affiliate of Newcourt or AT&T
Capital or who intends to participate in this exchange offer for the purpose of
distributing Exchange Notes will not be able to tender any notes in the exchange
offer, and those purchasers must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the notes, unless the sale or transfer is made under an exemption
from such requirements. Moreover, a broker-dealer who acquired notes for its own
account as a result of market-making activities or other trading activities must
deliver a prospectus meeting the requirements of the Securities Act in
connection with the resale of the Exchange Notes. Newcourt has agreed for a
period of at least 180 days after completion of this exchange offer to make
available a prospectus meeting the requirements of the Securities Act to any
broker-dealer for use in connection with a resale of the Exchange Notes. A
broker-dealer that delivers a prospectus to purchasers in connection with
resales will be subject to some of the civil liability provisions under the
Securities Act and will be bound by the provisions of the registration rights
agreement.
17
If you want to replace your notes with Exchange Notes by participating in
this exchange offer, you will be required to certify that
(1) any Exchange Notes you may receive will be acquired in the ordinary
course of your business,
(2) you are not engaged in, and do not intend to engage in, and have no
arrangement with any person to participate in the distribution of the Exchange
Notes and
(3) you are not an affiliate of Newcourt or AT&T Capital.
TERMS OF THE EXCHANGE
We are offering to exchange $1,000 in principal amount of Exchange Notes
for each $1,000 in principal amount of your notes. This offer is made on the
terms and subject to the conditions set forth in this prospectus and the Letter
of Transmittal accompanying the registration statement and this prospectus.
The terms of the Exchange Notes are substantially identical to the terms of
your notes except that (1) your ability to transfer the Exchange Notes will not
be restricted and (2) you will not be entitled to the same registration rights
and liquidated damages provisions as you were prior to this exchange offer,
regardless of whether or not you choose to participate in this exchange offer.
The Exchange Notes will evidence the same debt as the notes you currently own
and will be entitled to the benefits of the Indenture. See 'Description of
Exchange Notes.'
This exchange offer is not conditioned upon any minimum aggregate principal
amount of notes being offered by you or accepted by us for exchange.
Resales. Based on our view of interpretations set forth in no-action
letters issued by the SEC, we believe that you may resell or otherwise transfer
the Exchange Notes unless you are (1) an affiliate of Newcourt or AT&T Capital,
(2) a broker-dealer who acquired notes directly from Newcourt or AT&T Capital or
(3) a broker-dealer who acquired notes as a result of market making or other
trading activities. In connection with a resale of the Exchange Notes, you will
not have to comply with the registration and prospectus delivery provisions of
the Securities Act so long as you acquire the notes in the ordinary course of
your business, and you are not engaged in, and do not intend to engage in, and
have no arrangement or understanding with any person to participate in, a
distribution of your Exchange Notes.
Resales by broker-dealers. Any broker-dealer that resells Exchange Notes
that were received by it for its own account pursuant to this exchange offer and
any broker or dealer that participates in a distribution of such Exchange Notes
may be deemed to be an 'underwriter' under the Securities Act. As a result, any
profit, commissions or concessions received on such a resale may be deemed to be
underwriting compensation under the Securities Act. Each broker-dealer that
receives Exchange Notes for its own account pursuant to this exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of
those Exchange Notes. The Letter of Transmittal states that by so acknowledging,
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an 'underwriter' within the meaning of the Securities Act.
Broker-dealers who acquired notes as a result of market making or other
trading activities may use this prospectus, as supplemented or amended, in
connection with resales of Exchange Notes. Newcourt has agreed that, for a
period of 180 days after the registration statement is declared effective, it
will make this prospectus available to any broker-dealer for use in connection
with any such resale. Any holder who tenders in the exchange offer for the
purpose of participating in a distribution of the Exchange Notes or any other
holder that cannot rely upon our interpretations of SEC no-action letters must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction.
Commissions and fees. You will not be required to pay brokerage commissions
or fees or, subject to the instructions in the Letter of Transmittal, transfer
taxes with respect to the exchange of your notes.
18
Interest. The Exchange Notes will bear interest from the most recent date
to which interest has been paid on the notes you currently own, or if no
interest has been paid, the initial issuance date of the old notes
(February 16, 1999) at a rate of 6.875% per annum, payable semi-annually on
February 16 and August 16 of each year, commencing August 16, 1999.
EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS
This exchange offer expires at 5:00 p.m., New York City time, on
November 17, 1999 unless we decide to extend the expiration date. We may extend
the exchange offer at any time prior to the expiration date by giving written
notice to The Chase Manhattan Bank, as exchange agent, and by timely public
announcement communicated by no later than 5:00 p.m. on the next business day
following the expiration date, unless otherwise required by applicable law or
regulation, by making a release to the Dow Jones News Service. During an
extension of the exchange offer, all notes previously tendered pursuant to the
exchange offer will remain subject to the exchange offer.
The initial exchange date will be the third business day following the
expiration date or as soon thereafter as practicable. We expressly reserve the
right to (1) terminate the exchange offer and not accept any notes for any
reason, including if any of the events set forth below under ' -- Conditions to
the Exchange Offer' shall have occurred and (2) amend the terms of this exchange
offer in any manner, whether before or after any tender of notes. If any
termination or amendment occurs, we will notify the exchange agent in writing
and will either issue a press release or give written notice to you as promptly
as practicable. Unless we terminate the exchange offer prior to 5:00 p.m., New
York City time, on the expiration date, we will exchange the notes you currently
own for Exchange Notes on the third business day following the expiration date
or as soon thereafter as practicable.
HOW TO TENDER
You may tender your notes for exchange by following the procedures outlined
below. By tendering your notes, you are agreeing to the terms and conditions
contained in this prospectus and the Letter of Transmittal.
GENERAL PROCEDURES
You may tender your notes by either:
(1) completing and signing the Letter of Transmittal and delivering it
by mail or facsimile (unless an agent's message (as defined below) is
transmitted in lieu thereof), together with your notes and any required
signature guarantees (or a timely confirmation of a book-entry transfer (a
'Book-Entry Confirmation') pursuant to the procedure described below), to
The Chase Manhattan Bank, acting as the exchange agent, at its address set
forth under the heading ' -- Exchange Agent' herein before the expiration
date, or
(2) complying with the guaranteed delivery procedures described below.
If the Exchange Notes are to be issued (and any untendered notes are to be
reissued) in the name of the registered holder of the notes and that holder has
signed the Letter of Transmittal, a signature guarantee is not required. In any
other case, your notes must be endorsed or accompanied by written instruments of
transfer satisfactory to us signed by the registered holder and the signature on
the endorsement or instrument of transfer must be guaranteed by an eligible
institution, such as a bank, broker, dealer, credit union, savings association,
clearing agency or other institution (each an 'eligible institution') that is a
member of a recognized signature guarantee medallion program within the meaning
of Rule 17Ad-15 under the Exchange Act. If you want your notes to be delivered
to an address other than that of a registered holder appearing on the note
register for the notes you currently own, the signature on the Letter of
Transmittal must also be guaranteed by an eligible institution.
If your notes are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and you want to tender your notes you
should contact that institution right
19
away and instruct them to tender your notes on your behalf. If you want to
tender your notes yourself, you must, prior to completing and executing the
Letter of Transmittal and delivering your notes, either make arrangements to
register ownership of the notes in your name or follow the procedures described
in the immediately preceding paragraph. The transfer of record ownership to your
name may take considerable time.
If you do not provide the exchange agent with your taxpayer identification
number and certify that that number is correct, the exchange agent will withhold
31% of the amount payable to you, unless a tax exemption concerning 'backup
withholding' otherwise applies. Unless such an exemption applies, you should
complete and sign the main signature form and the Substitute Form W-9 which are
part of the Letter of Transmittal to avoid such backup withholding.
DELIVERY OF NOTES TO THE EXCHANGE AGENT THROUGH THE DEPOSITORY TRUST COMPANY
The exchange agent will establish an account for the notes at The
Depository Trust Company within two days after delivery of this prospectus to
you. Any financial institution that is a participant in The Depository Trust
Company system may make book-entry delivery of your notes into the exchange
agent's account at The Depository Trust Company. However, you still must either
(1) complete and sign the documents as described above or transmit an agent's
message in lieu thereof or (2) follow the guaranteed delivery procedures
described below.
Tenders by book-entry transfer may also be made by delivering an agent's
message in lieu of the Letter of Transmittal. The term 'agent's message' means a
message, transmitted by The Depository Trust Company to and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation, which states
that The Depository Trust Company has received an express acknowledgment from
the tendering Participant, which acknowledgment states that such Participant has
received and agrees to be bound by the Letter of Transmittal and that we may
enforce the Letter of Transmittal against such Participant.
YOU ARE RESPONSIBLE FOR DELIVERY OF YOUR NOTES TO US BY THE EXPIRATION
DATE. IF YOU ARE SENDING YOUR NOTES BY MAIL, WE RECOMMEND THAT YOU USE INSURED
REGISTERED MAIL, RETURN RECEIPT REQUESTED, AND THAT YOU MAIL YOUR NOTES WELL IN
ADVANCE OF THE EXPIRATION DATE.
FACSIMILE AND GUARANTEED DELIVERY PROCEDURES
If you want to exchange your notes and your notes are not immediately
available or you do not have enough time to get your notes to the exchange agent
before the expiration of the offer, you may still participate by complying with
the following conditions. An eligible institution, on your behalf, must deliver
a duly executed Letter of Transmittal (or facsimile thereof) (or agent's message
in lieu thereof) and a letter, telegram or facsimile, a form of which is
available from the exchange agent, to the exchange agent prior to the expiration
date, which sets forth:
your name and address;
the amount of notes you want to exchange;
the names in which the notes are registered;
if possible, the certificate numbers of the notes being tendered; and
a guarantee that, within three NYSE trading days, the notes being
exchanged and all other documentation required by the Letter of
Transmittal will be delivered to the exchange agent.
Your tender will be completed once the exchange agent receives your
completed Letter of Transmittal (or agent's message in lieu), all other
documentation required by the Letter of Transmittal and the notes you currently
own.
VALIDITY OF TENDERS
We will make all decisions as to the validity, form, eligibility, timing
and acceptance of all tenders of notes. We reserve the right to reject any or
all tenders which are not in the proper
20
form or which we, or our counsel, determine is unlawful. We also reserve the
right to waive any of the conditions of this exchange offer. We may choose to
accept tenders from some holders despite defects or irregularities in those
tenders, and not accept tenders having the same defects or irregularities from
other holders. No one has any duty to notify you of any defects or
irregularities in your tender. Our interpretation of the terms and conditions of
this exchange offer, including the Letter of Transmittal, will be final and
binding.
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of this exchange offer.
A party tendering notes for exchange (the 'Transferor') exchanges,
assigns and transfers the notes to Newcourt and irrevocably
constitutes and appoints the exchange agent as the Transferor's agent
and attorney-in-fact to cause the notes to be assigned, transferred
and exchanged.
The Transferor represents and warrants that it has full power and
authority to tender, exchange, assign and transfer the notes and to
acquire Exchange Notes issuable upon the exchange of such tendered
notes, and that, when the same are accepted for exchange, Newcourt
will acquire good and unencumbered title to the tendered notes, free
and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim.
The Transferor also warrants that it will, upon request, execute and
deliver any additional documents deemed by Newcourt to be necessary
or desirable to complete the exchange, assignment and transfer of
tendered notes.
The Transferor further agrees that acceptance of any tendered notes
by Newcourt and the issuance of Exchange Notes in exchange therefor
shall constitute performance in full by Newcourt of its obligations
under the registration rights agreement and that Newcourt shall have
no further obligations or liabilities under that agreement (except in
certain limited circumstances).
All authority conferred by the Transferor will survive the death or
incapacity of the Transferor and every obligation of the Transferor
shall be binding upon the heirs, legal representatives, successors,
assigns, executors and administrators of such Transferor.
By tendering notes and executing the Letter of Transmittal or transmitting
an agent's message in lieu thereof, you are certifying that
any Exchange Notes to be received by you will be acquired in the
ordinary course of your business,
you have no arrangement with any person to participate in the
distribution of the Exchange Notes,
you are not an 'affiliate,' as defined in Rule 405 of the Securities
Act, of Newcourt or AT&T Capital, or if you are an affiliate of
Newcourt or AT&T Capital, you will comply with the registration and
prospectus delivery requirements of the Securities Act, and
you are not a broker-dealer, or if you are a broker-dealer, you are
not engaged in, and do not intend to engage in, the distribution of
the Exchange Notes, or if you are a broker-dealer that will receive
Exchange Notes for your own account in exchange for notes that were
acquired as a result of market making activities or other trading
activities, you will deliver a prospectus in connection with any
resale of your Exchange Notes.
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WITHDRAWAL RIGHTS
You may withdraw your tender of your notes at any time prior to the
expiration date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be received by the exchange agent prior to the
expiration date. Any notice of withdrawal must specify:
(1) the person named in the Letter of Transmittal as having tendered
notes to be withdrawn,
(2) the certificate numbers of notes to be withdrawn,
(3) the principal amount of notes to be withdrawn,
(4) a statement that you are withdrawing your election to have your
notes exchanged, and
(5) the name of the registered holder of the notes.
Also, the notice of withdrawal must be signed by the holder in the same
manner as the original signature on the Letter of Transmittal (including any
required signature guarantees) or be accompanied by evidence satisfactory to us
that the person withdrawing the tender has succeeded to the beneficial ownership
of the notes being withdrawn. The exchange agent will return the properly
withdrawn notes promptly after it receives notice of withdrawal. All questions
as to the validity of notices of withdrawals, including time of receipt, will be
determined by Newcourt, and its determination will be final and binding.
ACCEPTANCE OF NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
On the terms and subject to the conditions of this exchange offer, we will
accept for exchange notes validly tendered and not withdrawn and we will issue
the Exchange Notes on the third business day following the expiration date of
the exchange offer or as soon thereafter as practicable. For the purposes of
this exchange offer, Newcourt shall be deemed to have accepted for exchange
validly tendered notes when, as and if Newcourt has given written notice thereof
to the exchange agent.
The exchange agent will act as your agent for the purposes of receiving
Exchange Notes from Newcourt and causing the notes to be assigned, transferred
and exchanged. Upon the terms and subject to the conditions of this exchange
offer, the exchange agent will deliver to you Exchange Notes in exchange for
your tendered notes accepted for exchange by Newcourt promptly after acceptance
by us of such tendered notes. Tendered notes not accepted for exchange by us
will be returned without expense: (1) to you; or (2) in the case of notes
tendered by book-entry transfer into the exchange agent's account at The
Depository Trust Company pursuant to the procedures described above, such
non-exchanged notes will be credited to an account maintained with The
Depository Trust Company promptly following the expiration date; or (3) if
Newcourt terminates this exchange offer prior to the expiration date, promptly
after the exchange offer is so terminated.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of this exchange offer, or any
extension of this exchange offer, Newcourt will not be required to issue
Exchange Notes in respect of any properly tendered notes not previously
accepted, Newcourt may terminate this exchange offer or, at its option, modify
or otherwise amend the exchange offer.
Newcourt may terminate or modify or otherwise amend the exchange offer as
follows:
(1) Newcourt may terminate the exchange offer by oral (promptly
confirmed in writing) or written notice to the exchange agent and by making
a timely public announcement communicated by no later than 5:00 p.m. on the
next business day following the expiration date, by making a release to the
Dow Jones News Service;
22
(2) Newcourt may modify or amend the exchange offer, if any of the
folllowing occur:
(a) a lawsuit is threatened, instituted or pending or an
injunction, order or decree is issued by any court, governmental agency
or regulatory authority, agency or commission that would interfere with,
delay, prohibit or seek damages relating to the exchange offer;
(b) a statute, rule, reglation or order or injunction is sought,
proposed, introduced, enacted, promulgated or deemed applicable to this
exchange offer by any government, governmental authority, agency or
court commission that would delay, prohibit or seek damages relating to
the exchange offer or might result in the holders of Exchange Notes
having additional obligations relating to resales and transfers of
Exchange Notes than described under the heading ' -- Terms of the
Exchange' in this section of the Prospectus or otherwise make Newcourt
deem it inadvisable to proceed with this exchange offer; or
(c) a material adverse change occurs in the business, condition,
operations or prospects of Newcourt.
These conditions benefit Newcourt only and not the holders of the notes and
only Newcourt may assert these rights with respect to all or any portion of this
exchange offer regardless of the circumstances. These rights are available to
Newcourt at any time and each right will be deemed an ongoing right which may be
asserted at any time or from time to time. In addition, we have reserved the
right, notwithstanding the satisfaction of each of the foregoing conditions, to
terminate or amend this exchange offer.
Any determination by Newcourt concerning the fulfillment or nonfulfillment
of any conditions will be final and binding upon all parties.
In addition, Newcourt will not accept for exchange any notes tendered and
no Exchange Notes will be issued in exchange for any tendered notes, if at such
time any stop order shall be threatened or in effect with respect to the
registration statement of which this prospectus constitutes a part or
qualification of the Indenture under the Trust Indenture Act of 1939.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as the exchange agent for this
exchange offer. Letters of Transmittal, whether sent by mail, overnight
delivery, hand delivery or facsimile must be addressed to the exchange agent at:
The Chase Manhattan Bank
55 Water Street
New York, New York 10041
Attention: Carlos Esteves
Phone: 212-638-0828
Facsimile: 212-638-7380
DELIVERY TO ANY OTHER ADDRESS, OR TRANSMISSIONS OF INSTRUCTIONS VIA A
FACSIMILE OR TELEX NUMBER OTHER THAN THE ONE SPECIFIED, WILL NOT BE ACCEPTED AS
A VALID DELIVERY.
EXPENSES
We have not retained any dealer-manager or similar agent in connection with
this exchange offer and we will not make any payments to brokers, dealers or
others for soliciting acceptances of the exchange offer. We will, however, pay
the exchange agent normal fees for its services and will reimburse it for
reasonable out-of-pocket expenses. We will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding tenders for their customers. The expenses to be
incurred in connection with this exchange offer, including the fees and expenses
of the exchange agent and printing, accounting, legal fees and miscellaneous
expenses will be paid by Newcourt and are estimated to be approximately
$620,000.
23
SOLICITATION OF TENDERS
No person has been authorized to give any information or to make any
representations in connection with this exchange offer other than those
contained in this prospectus. If you receive any other information, you should
not rely on that information as having been authorized by us. You should not
assume that, because of our delivery of this prospectus or any exchange of
tendered notes by us, that the information contained in this prospectus
regarding Newcourt or AT&T Capital has not changed since the date as of such
information is given.
We are not making this exchange offer in any jurisdiction where to do so
would not be in compliance with the laws of that jurisdiction. However, we may,
at our discretion, take any action we deem necessary to make this exchange offer
in any such jurisdiction in order to extend the exchange offer to holders of
notes in such jurisdiction. Where required by applicable law, this exchange
offer is being made on our behalf by one or more registered brokers or dealers
that are licensed under the laws of that jurisdiction.
APPRAISAL RIGHTS
HOLDERS OF NOTES WILL NOT HAVE DISSENTERS' RIGHTS OR APPRAISAL RIGHTS IN
CONNECTION WITH THIS EXCHANGE OFFER.
OTHER
Participation in this exchange offer is voluntary. You should carefully
consider whether to accept the terms and conditions described in this
prospectus. We urge you to consult your financial and tax advisors in making
your decisions on what action to take with respect to this exchange offer.
Upon the completion of the exchange of notes made as a result of this
exchange offer, we will have fulfilled our obligation contained in the terms of
the original notes and the registration rights agreement. Holders of the notes
who do not tender their original notes in this exchange offer will no longer be
entitled to any rights under the registration rights agreement, as that
agreement terminates as a result of the making of this exchange offer. All
untendered notes will continue to be subject to the restriction on transfer set
forth in the Indenture. Upon the completion of this exchange offer, the trading
market, if any, for any remaining original notes could be adversely affected.
We may in the future seek to acquire untendered notes in the open market or
privately negotiated transactions, through subsequent exchange offers or in
other ways. However, we have no present plan to acquire any notes that are not
tendered in this exchange offer.
24
DESCRIPTION OF THE EXCHANGE NOTES
GENERAL
The Exchange Notes constitute a single series and are to be issued under an
Indenture dated as of February 15, 1999, among AT&T Capital, Newcourt and The
Chase Manhattan Bank, as trustee (the 'trustee'). We have summarized below some
provisions of the Indenture. However, you should look to the Indenture for a
full description of the terms and conditions of the Exchange Notes. Section
references are to sections of the Indenture. Wherever particular provisions of
the Indenture are referred to, you should consider those provisions as part of
this prospectus.
The Indenture does not limit the total principal amount of debt securities
that may be issued pursuant to the Indenture. The Indenture provides that debt
securities may be issued by Newcourt at any time in one or more series.
Therefore, additional series of debt securities, other than the notes, may be
issued by Newcourt. The Indenture also permits Newcourt to specify the form and
terms of the debt securities. Newcourt currently has U.S. $300 million total
principal amount of debt securities outstanding, including the notes, under the
Indenture.
The Exchange Notes will be unsecured obligations of Newcourt and will rank
equal in right of payment with all other unsecured and unsubordinated
indebtedness of Newcourt. At June 30, 1999, Newcourt's consolidated
indebtedness, all of which is unsecured and unsubordinated, was approximately
U.S. $11.8 billion (C $17.5 billion). The Exchange Notes will, however, be
effectively subordinated to the indebtedness and other liabilities of Newcourt's
subsidiaries other than AT&T Capital. At June 30, 1999, that indebtedness and
other liabilities, including those of AT&T Capital, totaled approximately
U.S. $10.3 billion (C $15.1 billion). At this time, we do not intend or plan to
increase the amount of this indebtedness in the future, except in connection
with the growth of our business.
PAYMENTS OF PRINCIPAL AND INTEREST
The Exchange Notes will be limited in total principal amount to U.S. $1,000
million and will mature on February 16, 2005. The Exchange Notes will bear
interest from the most recent date to which interest has been paid on the notes
you currently own, at 6.875% per annum until the principal is paid or made
available to you for payment. Interest will be payable to the person in whose
name the Exchange Note is registered at the close of business on the record date
with respect to the interest payment date as specified in the Indenture;
provided, however, that interest payable at maturity, whether or not the
maturity date is an interest payment date, will be payable to the person to whom
principal shall be payable. If you hold an Exchange Note that is a book-entry
note represented by a global security, all interest payments, except interest
due at maturity, will be made to a nominee of The Depository Trust Company. The
'record date' with respect to any interest payment date shall be the date
fifteen calendar days prior to that interest payment date.
Interest on the Exchange Notes will be payable on February 16 and
August 16 of each year and at maturity. Interest payments on Exchange Notes
shall be the amount of interest accrued from, and including, the date of issue
or the last date to which interest has been paid to, but excluding, the next
succeeding interest payment date or maturity date, as the case may be. If an
interest payment date (other than the maturity date) would otherwise be a day
that is not a business day, that interest payment date will be postponed to the
next succeeding day that is a business day, except that if that business day
falls in the next succeeding calendar month, that interest payment date will be
the immediately preceding business day. If the maturity date of the Exchange
Notes falls on a day that is not a business day, the required payment of
principal, premium, if any, and/or interest will be made on the next succeeding
business day as if made on the date such payment was due, and no interest shall
accrue on the payment for the period from and after the maturity date to the
date of the payment.
The Exchange Notes will be issuable as book-entry notes represented by a
global security registered in the name of a nominee of The Depository Trust
Company as depositary. Except as set forth in 'Book-Entry System' below,
book-entry notes will not be issuable as certificates issued
25
in definitive form. The Exchange Notes will be issued in denominations of U.S.
$1,000 and any integral multiple of $1,000 in excess thereof.
We have designated The Chase Manhattan Bank, acting through its principal
corporate trust office in New York, New York, as the registrar and transfer
agent for the Exchange Notes, as the paying agent for the Exchange Notes and as
the authenticating agent for the Exchange Notes.
Principal and premium, if any, and interest will be payable, and the
Exchange Notes will be transferable, at the office of the paying agent, 270 Park
Avenue, New York, New York 10017 or at such other place or places as may be
designated under the Indenture. However, we may, at our option pay interest
other than interest due at maturity by check mailed to registered holders
(which, in the case of book-entry notes represented by a global security, will
be a nominee of the depositary). At the maturity of the Exchange Notes, the
principal, together with accrued interest, will be payable in immediately
available funds upon surrender of these Exchange Notes at the office of the
trustee at such other place or places as may be designated under the Indenture.
REDEMPTION, REPURCHASE OR REPAYMENT
We do not have the option to redeem the Exchange Notes and you may not
request repayment of the Exchange Notes prior to maturity. We may at any time,
subject to applicable law, purchase Exchange Notes at any price in the open
market or by other means. We may hold, resell or surrender to the trustee for
cancellation any Exchange Notes we purchase.
However, if we are required to pay an additional amount in accordance with
' -- Certain Covenants -- Payment of Additional Amounts,' we may, on proper
notice to you, redeem all the notes and Exchange Notes then outstanding, at
their principal amount, together with accrued interest.
BOOK-ENTRY SYSTEM
Upon issuance, the Exchange Notes will be book-entry notes represented by a
single global security. The global security representing the book-entry notes
will be deposited with, or on behalf of, The Depository Trust Company and
registered in the name of a nominee of the The Depository Trust Company. Except
under circumstances described below, book-entry notes will not be exchangeable
for certificated notes and will not otherwise be issuable in definitive form.
THE DEPOSITARY. The depositary has advised us that it is:
a limited-purpose trust company organized under the New York Banking
Law,
a 'banking organization' within the meaning of the New York Banking
Law,
a member of the Federal Reserve System,
a 'clearing corporation' within the meaning of the New York Uniform
Commercial Code, and
a 'clearing agency' registered pursuant to the provisions of Section
17A of the Exchange Act.
The depositary's management has advised us that it is aware that some
computer applications, systems and the like for processing data that are
dependent upon calendar dates, including dates before, on and after January 1,
2000, may encounter 'Year 2000 problems.' The depositary has informed its
participants and other members of the financial community that it has developed
and is implementing a program so that its computer systems, as the same relate
to the timely payment of distributions (including principal and interest
payments) to securityholders, book-entry deliveries, and settlement of trades
within the depositary, continue to function appropriately. This program includes
a technical assessment and a remediation plan, each of which is complete.
Additionally, the depositary's plan includes a testing phase, which is expected
to be complete within appropriate time frames.
However, the depositary's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third-party vendors from
26
whom the depositary licenses software and hardware, and third-party vendors on
whom the depositary relies for information or the provision of services,
including telecommunication and electrical utility service providers, among
others. The depositary has informed the financial community that it is
contacting (and will continue to contact) third-party vendors from whom the
depositary acquires services to: (i) impress upon them the importance of such
services being Year 2000 compliant; and (ii) determine the extent of their
efforts for Year 2000 remediation (and, as appropriate, testing) of their
services. In addition, the depositary is in the process of developing such
contingency plans as it deems appropriate.
The depositary holds securities deposited by its participants. 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. It thereby
eliminates the need for physical movement of securities. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. 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. (the 'NASD'). 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. The rules applicable to the depositary and its
participants are on file with the SEC.
BOOK-ENTRY FORMAT. Upon the issuance of the global security, the depositary
will credit on its book-entry registration and transfer system its participants'
accounts with their respective principal amounts of the Exchange Notes
represented by that global security. The only persons who may own beneficial
interests in a global security will be the depositary's participants or persons
that hold interests through participants. Ownership of beneficial interests in
the global security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the depositary or its nominee, with
respect to interests of participants, and on the records of participants, with
respect to interests of persons other than participants. The laws of some states
may require that certain purchasers of securities take physical delivery of
their securities in definitive form. These limits and laws may impair your
ability to transfer your interest in a book-entry note.
So long as the depositary or its nominee is the registered owner of the
global security, the depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Notes represented by the
global security for all purposes under the Indenture. Except as provided below
or as we may otherwise agree in our sole discretion, owners of beneficial
interests in a global security will not be entitled to have Exchange Notes
represented by such global security registered in their names, will not receive
or be entitled to receive physical delivery of Exchange Notes in definitive form
and will not be considered the owners or holders thereof under the Indenture.
Principal, premium, if any, and interest payments on Exchange Notes
registered in the name of the depositary or its nominee will be made to the
depositary or its nominee, as the case may be, as the registered owner of the
global security representing the Exchange Notes. None of Newcourt, the trustee,
any paying agent or the registrar for such Exchange Notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in such global security for
such Exchange Notes or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
We expect that the depositary for the Exchange Notes or its nominee, upon
receipt of any payment of principal, premium or interest, will credit
immediately its participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the global
security for the Exchange Notes as shown on the records of the depositary or its
nominee. We also expect that payments by participants to owners of beneficial
interest in the global security held through those participants will be governed
by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer
27
form or registered in 'street name' (i.e., the name of a securities broker or
dealer), and will be the responsibility of those participants.
ISSUANCE OF NOTES IN DEFINITIVE FORM. If the depositary is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by us within 90 days, we will issue Exchange Notes in definitive form
in exchange for the entire global security representing the Exchange Notes. In
addition, we may at any time determine not to have the Exchange Notes
represented by the global security. In such event, we will issue Exchange Notes
in definitive form in exchange for the global security representing the Exchange
Notes. In any such instance, an owner of a beneficial interest in a global
security will be entitled to physical delivery in definitive form of Exchange
Notes represented by the global security equal in principal amount to its
beneficial interest and to have its Exchange Notes registered in its name.
Exchange Notes so issued in definitive form will be issued as registered
Exchange Notes in denominations of U.S. $1,000 and any integral multiple of
$1,000 in excess thereof.
CERTAIN COVENANTS
Set forth below is a description of Newcourt's and AT&T Capital's principal
covenants contained in the Indenture. The Indenture does not restrict us, other
than as set forth below, from engaging in any highly leveraged transaction,
reorganization, restructuring, merger or similar transaction, or from incurring
additional indebtedness or causing our subsidiaries to incur additional
indebtedness, any of which transactions could have an adverse effect on you, as
a holder of the Exchange Notes.
Consolidation, Merger, Sale or Conveyance of Assets of the Company. Under
the Indenture, each of Newcourt and AT&T Capital covenants that it will not:
merge or consolidate with any other corporation, or
sell or convey all or substantially all its assets to any person,
other than a sale or conveyance to one of our subsidiaries, unless:
(1) either (a) Newcourt or AT&T Capital is the continuing
corporation or (b) if Newcourt or AT&T Capital is not the
continuing corporation, the continuing corporation expressly
assumes the due and punctual payment of the principal of,
premium, if any, and interest, if any, on all the debt
securities and the due and punctual performance and observance
of all the covenants and conditions of the Indenture in a
manner acceptable to the trustee, and
(2) the continuing corporation is not, immediately after the
transaction in default in the performance of any covenant or
condition.
In the case of any such consolidation, merger, sale or conveyance, and
following an assumption by the successor corporation, the successor corporation
will succeed to and be substituted for Newcourt or AT&T Capital, with the same
effect as if it had been named in the Indenture or the Guarantee, as applicable,
and, in the case of any sale or conveyance (other than a conveyance by way of
lease), Newcourt or AT&T Capital will be released and discharged from all
obligations and covenants under the Indenture and the Exchange Notes or the
Guarantee, as applicable. In the event Newcourt or AT&T Capital sells or conveys
assets to a subsidiary, as permitted, an asset drop-down occurs after the date
of the Indenture, any subsequent sale or conveyance of assets by such subsidiary
will be deemed to be a sale or conveyance of assets by Newcourt or AT&T Capital
for purposes of the covenant described in this paragraph. (Sections 5.01 and
5.02)
The term 'all or substantially all,' which appears in the foregoing
covenant, is not defined in the Indenture, and it does not have a precise
established definition under applicable law. The application of the covenant may
depend on the facts and circumstances of a particular transaction. Accordingly,
there may be uncertainty in connection with any particular transaction as to
whether a sale or conveyance of all or substantially all of Newcourt's or AT&T
Capital's assets has occurred and thus as to whether Newcourt or AT&T Capital
has complied with this covenant.
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Because New York law governs the Indenture, New York law will govern the
interpretation of the term 'all or substantially all.'
Limitations on Incurrence of Secured Debt. We will not, nor will we permit
any Restricted Subsidiary (as defined below) to:
create or incur, or suffer to be incurred or to exist, any Lien on
our property or assets, whether now owned or acquired later, or upon
any income or profits from those properties or assets,
transfer any property for the purpose of subjecting that property to
the payment of obligations in priority to the payment of our general
creditors,
acquire or agree to acquire, or permit any Restricted Subsidiary to
acquire, any property or assets upon conditional sales agreements or
other title retention devices, without thereupon expressly securing
the due and punctual payment of the principal of, premium, if any,
and the interest on the debt securities of each Series equally and
ratably with any and all other obligations and indebtedness secured
by such Lien, so long as any such other obligations and indebtedness
shall be so secured,
and if and when any of these Liens is created, the debt securities of each
Series will be so secured thereby.
However, this Section shall neither limit nor be deemed or construed as
limiting our right or any Restricted Subsidiary's right to create or incur, or
suffer to be incurred or to exist, any one or more of the following Liens:
(i) Subject to certain restrictions, Liens for property taxes and
assessments or governmental charges or levies and Liens securing claims or
demands of mechanics and materialmen;
(ii) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which Newcourt or a Restricted Subsidiary shall at any time in
good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(iii) Liens incidental to the conduct of business or the ownership or
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and solicitors' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money; provided in each case, the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(iv) Minor survey exceptions, or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and the Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of Newcourt and the Restricted Subsidiaries;
(v) Liens securing Debt of a Restricted Subsidiary to the Company or
to another Restricted Subsidiary;
(vi) Any other Liens (other than the Liens described in
clauses (i)-(xvi)) which in the aggregate relate to Debt the aggregate
amount of which does not exceed 10% of Consolidated Net Tangible Assets;
(vii) Purchase Money Obligations;
29
(viii) Liens on Acquired Financing Assets to secure Secured
Subordinated Debt of Newcourt or the Restricted Subsidiaries arising in
connection with the acquisition of such Acquired Financing Assets;
(ix) Liens securing Non-Recourse Debt of Newcourt or the Restricted
Subsidiaries;
(x) Liens created or incurred after December 15, 1998 upon any
property (the 'Substitute Property') concurrently with the release of a
comparable Lien on other property (the 'Released Property'), provided that
(A) the fair market value of the Substitute Property shall not exceed the
fair market value of the Released Property by more than 110%, (B) the
character and use of the Substitute Property shall be substantially
equivalent to the character and use of the Released Property, and (C) such
substitution shall be without increase in the principal amount of the Debt
remaining unpaid as of the date of such substitution which is to be secured
by the Lien on such Substitute Property and such remaining unpaid principal
amount of such Debt shall not exceed the aggregate fair market value of
such Substitute Property and any other property securing such Debt;
(xi) Liens on property of, or on any shares of stock or debt of, any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(xii) Liens on property, shares of stock, other equity interests, or
debt existing at the time of acquisition or repossession thereof by
Newcourt or any Restricted Subsidiary;
(xiii) Liens on physical property (or any Accounts Receivable arising
in connection with the lease thereof), shares of stock, other equity
interests, or debt acquired (or, in the case of physical property,
constructed) after December 15, 1998 by Newcourt or any Restricted
Subsidiary, which liens are created prior to, at the time of, or within one
year after such acquisition (or, in the case of physical property, the
completion of such construction or commencement of commercial operation of
such property, whichever is later) to secure any debt issued, incurred,
assumed or guaranteed prior to, at the time of, or within one year after
such acquisition (or such completion or commencement, whichever is later)
or to secure any other debt issued, incurred, assumed or guaranteed at any
time thereafter for the purpose of refinancing all or any part of such
debt;
(xiv) Liens on Accounts Receivable of Newcourt or any Restricted
Subsidiary arising from or in connection with transactions entered into by
Newcourt or such Restricted Subsidiary after December 15, 1998 or on
Accounts Receivable acquired by Newcourt or such Restricted Subsidiary
after such date from others which liens are created prior to, at the time
of, or after such Accounts Receivable arise or are acquired:
(a) as a result of any guarantee, repurchase or other contingent
(direct or indirect) or recourse obligation of the Company or such
Restricted Subsidiary in connection with the discounting, sale,
assignment, transfer or other disposition of such Accounts Receivable or
any interest therein, or
(b) to secure or provide for the payment of all or any part of the
investment of Newcourt or such Restricted Subsidiary in any such
Accounts Receivable (whether or not such Accounts Receivable are the
Accounts Receivable on which such liens are created) or the purchase
price thereof or to secure any debt (including, without limitation, Non-
Recourse Debt) issued, incurred, assumed or guaranteed for the purpose
of financing or refinancing all or any part of such investment or
purchase price;
(xv) any extension, renewal, or replacement of any Lien permitted by
the preceding subsections (vi), (vii), (viii), (x), (xi), (xii), (xiii) and
(xiv) hereof in respect of the same property theretofore subject to such
Lien in connection with the extension, renewal or refinancing of the Debt
secured thereby; provided that (A) such Lien shall attached solely to the
same such property or Substitute Property, (B) such extension, renewal or
refinancing of such Debt shall be without increase in the principal
remaining unpaid as of the date of such extension, renewal or refinancing;
and
30
(xvi) any Lien approved by the Holders holding a majority in principal
amount of the outstanding debt securities of each Series. (Section 4.03)
'Accounts Receivable' means (i) any accounts receivable (whether or not
earned by performance), chattel paper, instruments, documents, general
intangibles, trade acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to become due on account of
equipment or goods sold or leased or to be sold or leased or services rendered
or to be rendered or funds advanced or loaned or to be advanced or loaned and
other rights to payment of any kind, (ii) any proceeds of any of the foregoing
and (iii) any interest in any property or asset of any kind (whether of the
obligor under such Accounts Receivable or any other person) securing the payment
of any item listed in clause (i) hereof. (Section 1.01)
'Acquired Financing Assets' means assets (including, but not limited to,
securities and receivables) of any Person the acquisition of which was financed
in accordance with our credit policies and procedures manual approved from time
to time by the Board of Directors. (Section 1.01)
'Capitalized Lease' means any lease the obligation for Rentals with respect
to which is required to be capitalized on a consolidated balance sheet of the
lessee and its subsidiaries in accordance with GAAP. (Section 1.01)
'Capitalized Rentals' of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person. (Section 1.01)
'Consolidated Net Tangible Assets' means, at the date of any determination,
the total assets appearing on our consolidated balance sheet and its Restricted
Subsidiaries as at the end of our most recent fiscal quarter for which such
balance sheet is available, prepared in accordance with generally accepted
accounting principles, less (a) all current liabilities (obligations whose
liquidation is reasonably expected to occur within twelve months), (b)
investments in and advances to Subsidiaries other than Restricted Subsidiaries
or other entities accounted for on the equity method of accounting and (c)
Intangible Assets. (Section 1.01)
'Debt' of any Person shall mean and include all obligations of such Person
for money borrowed or which have been incurred in connection with the
acquisition of assets which in accordance with GAAP shall be classified upon a
balance sheet of such Person as liabilities of such Person, and in any event
shall include, without duplication, all (i) Capitalized Rentals and (ii)
Guaranties of obligations of others of the character referred to in this
definition. (Section 1.01)
'Guaranties' by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the 'primary
obligor') in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase capital stock or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Indenture, a
Guaranty in respect of any Debt shall be deemed, without duplication, to be
Indebtedness equal to the principal amount of such Debt which has been
guaranteed, and a Guaranty in respect of any other obligation or liability or
any dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend. (Section 1.01)
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'Intangible Assets' means the value (net of any applicable reserves), as
shown on or reflected in our balance sheet, of: (i) all trade names, trademarks,
licenses, patents, copyrights and goodwill; (ii) organization and development
costs; (iii) deferred charges (other than prepaid items such as insurance,
taxes, interest, commissions, rents and similar items and tangible assets being
amortized); and (iv) unamortized debt discount and expense, less unamortized
premium. (Section 1.01)
'Lien' means any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest line arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term 'Lien' shall include reservations, exception,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
shares, shareholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For purposes of the Indenture,
Newcourt or any Restricted Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the property
has been retained by or vested in some other Person for security purposes and
such retention or vesting shall constitute a Lien. (Section 1.01)
'Non-Recourse Debt' of Newcourt or any Restricted Subsidiary means any
indebtedness for borrowed money of Newcourt or such Restricted Subsidiary, as
the case may be, which is secured by any Lien on, or payable solely from the
income and proceeds of, any property (including, without limiting the generality
of such term, any intangible assets), shares of stock, other equity interests or
debt of Newcourt or such Restricted Subsidiary, as the case may be, and which is
not a general obligation of Newcourt or Restricted Subsidiary, as the case may
be. (Section 1.01)
'Purchase Money Obligations' means Liens created to secure the payment of
the purchase price incurred in connection with the acquisition of real or
personal assets (other than Acquired Financing Assets) useful and intended to be
used in carrying on the business of Newcourt or a Restricted Subsidiary,
including Liens existing on such assets at the time of acquisition by Newcourt
or a Restricted Subsidiary of any business entity then owning such assets,
whether or not such existing Liens were given to secure the payment of the
purchase price of such assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of such acquisition, provided
that:
(A) the Lien attaches solely to such assets acquired or purchased,
(B) at the time of acquisition of such assets, the aggregate amount
remaining unpaid on all Debt secured by Liens on such assets whether or not
assumed by Newcourt or a Restricted Subsidiary shall not exceed an amount
equal to the lesser of the total purchase price or fair market value at the
time of acquisition of such assets, and
(C) any such Lien shall be created contemporaneously with, or within
120 days after, the acquisition of such property.
'Rentals' shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by Newcourt or a Restricted Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be exclusive of any
amounts required to be paid by Newcourt or a Restricted Subsidiary (whether or
not designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any so-called
'percentage leases' shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
'Restricted Subsidiary' means each Subsidiary of Newcourt organized under
the laws of any State of the United States or the District of Columbia or
Canada, no substantial portion of the business of which is carried on outside
the United States; provided that each Drop-Down Subsidiary will be a Restricted
Subsidiary. (Section 1.01)
32
'Subsidiary' means any corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by Newcourt and/or by one or
more other Subsidiaries (including AT&T Capital). For purposes of such
definition, 'voting stock' means stock ordinarily having voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency. (Section 1.01)
Payment of Additional Amounts. All payments made by us with respect to the
notes and the Exchange Notes will be made free and clear of and without
withholding or deduction on account of any present or future tax, or other
governmental charge imposed by the Government of Canada or of any Canadian
province or territory or by any Canadian authority or agency having power to tax
(hereinafter 'Taxes'). However, if we are required to withhold or deduct Taxes
from any payment made with respect to the notes or the Exchange Notes, we will
pay such additional amounts ('Additional Amounts') so that you receive the same
net amount as you would have received if the Taxes had not been withheld or
deducted; provided that we will not pay any Additional Amounts with respect to a
payment made to a holder of Exchange Notes (an 'Excluded Holder'):
(a) with which Newcourt does not deal at arm's length (within the
meaning of the Income Tax Act (Canada)) at the time of making such payment,
(b) which is subject to such Taxes by reason of its being connected
with Canada or any province or territory thereof otherwise than by the mere
holding of notes or Exchange Notes or the receipt of payments thereunder,
or
(c) who could lawfully avoid (but has not so avoided) such deduction
or withholding by complying, or procuring that any third party complies
with, any statutory requirements or by making or procuring that any third
party makes a declaration of non-residence or other similar claim for
exemption to any relevant tax authority.
We will also (1) make the withholding or deduction and (2) remit the full
amount deducted or withheld to the relevant authority in accordance with
applicable law. We will furnish to the trustee within 30 days of when the Taxes
are due, certified copies of tax receipts evidencing our payment.
EVENTS OF DEFAULT
If an event of default in respect of any series of debt securities shall
have occurred and be continuing under the Indenture, either the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding debt
securities of that series may declare the principal of all the securities of
that series to be due and payable. (Section 6.01)
Events of default in respect of the debt securities of any series are
defined in the Indenture as being:
default for 90 days in payment of any interest installment when due;
unless otherwise specified with respect to the debt securities of any
series, default in payment of principal of the debt securities of
such series when due;
default for 90 days after written notice to Newcourt or AT&T Capital,
as applicable, by the trustee or by the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of that
series in the performance of any other agreement by Newcourt or AT&T
Capital, as applicable, in the debt securities or Indenture in
respect of that series; and
events of bankruptcy, insolvency and reorganization with respect to
Newcourt or AT&T Capital, as applicable. (Section 6.01)
The Indenture provides that we will, within 120 days after the close
of each fiscal year, beginning with the first fiscal year following the
issuance of any series of debt securities, file with the trustee a
certificate stating whether or not we have complied with all conditions and
covenants contained in the Indenture and, if not, specifying each default
and the nature of that default. (Section 4.04)
33
The Indenture allows the trustee, subject to the trustee's duty during
an event of default to act with the required standard of care, to refuse to
perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it. (Section 7.01)
The Indenture provides that the holders of a majority in aggregate
principal amount of the outstanding debt securities of any series affected
(with each series voting as a separate class) may direct the time, method
and place of conducting proceedings for remedies available to the trustee,
or exercising any trust or power conferred on the trustee, in respect of
that series. (Section 6.06)
Notice. The Indenture requires the trustee to give to the holders of a
series notice of all defaults known to it relating to that series of debt
securities within 90 days of any default; provided that, except in the case
of default in payment on any of the debt securities of that series, the
trustee will be protected in withholding notice if it in good faith
determines that the withholding of notice is in the interest of the holders
of that series. The term 'default' for the purpose of this provision means
any event which is, or after notice or passage of time or both would be, an
event of default as defined in the Indenture. (Section 7.05)
Waiver. The holders of a majority in principal amount of the
outstanding debt securities of a series may on behalf of the holders of all
debt securities of that series waive any past default or event of default,
or compliance with certain provisions of the Indenture, except, among other
things, a default in payment of the principal of, or interest on, any of
the debt securities of that series. (Sections 6.01 and 6.06)
DISCHARGE AND DEFEASANCE
Under terms satisfactory to the trustee, Newcourt or AT&T Capital may
discharge certain obligations to holders of any series of debt securities issued
under the Indenture so long as those securities (1) have not already been
delivered to the trustee for cancellation and (2) have either become due and
payable or are by their terms due and payable within one year (or scheduled for
redemption within one year). Newcourt or AT&T Capital may do so by irrevocably
depositing with the trustee as trust funds an amount in cash sufficient to pay
at maturity (or upon redemption) the principal of, premium, if any, and interest
on those debt securities. (Section 8.01)
In the case of any series of debt securities with respect to which the
exact amounts (including the currency of payment) of principal of and interest
due on that series can be determined at the time of making the deposit referred
to below (which include debt securities with a floating or variable rate of
interest that cannot exceed a specified or determinable maximum rate), Newcourt
or AT&T Capital may at its option also
(1) discharge any and all of the obligations to holders of that series
of debt securities ('defeasance') on the 91st day after the conditions set
forth below have been satisfied, but may not avoid the duty to register the
transfer or exchange of that series of debt securities, to replace any
temporary, mutilated, destroyed, lost or stolen debt securities of that
series or to maintain an office or agency in respect of the series, or
(2) be released with respect to that series of debt securities from
the obligations imposed by the covenants described under 'Covenants' above
('covenant defeasance').
Defeasance and covenant defeasance may be effected only if, among other
things,
(1) Newcourt or AT&T Capital irrevocably deposit with the trustee as
trust funds (a) money in an amount, (b) in the case of debt securities
payable only in U.S. Dollars, U.S. Governmental Obligations (as defined in
the Indenture) which through the payment of interest and principal in
respect thereof will provide money in an amount, or (c) a combination of
(a) and (b), certified by a nationally recognized firm of independent
public accountants to be sufficient to pay each installment of principal of
and interest on all outstanding debt securities of that series on the dates
installments of principal and interest are due; and
(2) we deliver to the trustee an opinion of independent counsel to the
effect that the holders of the series of debt securities will not recognize
income, gain or loss for United
34
States federal income tax purposes as a result of the defeasance or
covenant defeasance and will be subject to United States federal income tax
on the same amount and in the same manner and at the same time as would
have been the case if the defeasance or covenant defeasance had not
occurred (which opinion may include or be based on a ruling to that effect
received from or published by the Internal Revenue Service). (Section 8.02)
MODIFICATION OF THE INDENTURE
The Indenture allows Newcourt, AT&T Capital and the trustee, with the
consent of the holders of a majority in principal amount of the outstanding debt
securities of each series affected (with such series voting as a separate
class), to change the Indenture. In order to change the Indenture after
receiving the required consent of holders of any series, Newcourt, AT&T Capital
and the trustee may execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the Indenture or modifying the
rights of the holders of debt securities of each such series. However, we cannot
change, without the consent of all holders affected, among other things,
the maturity of any debt securities,
the principal amount of those securities,
any premium on those securities,
the rate or the time of payment of interest thereon, the type of
currency in which any debt security is payable, or
reduce the aforesaid percentage of outstanding debt securities
required to approve any such change. (Sections 9.01 and 9.02)
CONCERNING THE TRUSTEE
We may from time to time maintain lines of credit, and have other customary
banking relationships, with The Chase Manhattan Bank. In addition, The Chase
Manhattan Bank is the trustee under the Indentures dated as of April 9, 1990, as
of June 1, 1992 each as amended, among AT&T Capital, AT&T Corp., AT&T Capital
Holdings, Inc., a wholly-owned subsidiary of AT&T Corp., and The Chase Manhattan
Bank, pursuant to which AT&T Capital assumed and AT&T Corp. guaranteed certain
medium and long-term debt issued by AT&T Capital Holdings, Inc. As of June 30,
1999, the aggregate outstanding principal amount of such medium and long-term
debt was approximately U.S. $41.6 million. Furthermore, The Chase Manhattan Bank
is the trustee under the indenture dated as of July 1, 1993, between AT&T
Capital and The Chase Manhattan Bank pursuant to which AT&T Capital has issued
U.S. $11.4 billion aggregate principal amount of medium-term notes, the trustee
under the indenture dated as of April 1, 1998, among AT&T Capital, Newcourt and
The Chase Manhattan Bank pursuant to which AT&T Capital has issued U.S. $5.0
billion aggregate principal amount of medium-term notes, the trustee under the
indenture dated as of December 15, 1998, between Newcourt and The Chase
Manhattan Bank pursuant to which Newcourt has issued U.S. $0.3 billion aggregate
principal amount of notes, the trustee under the indenture dated as of
February 15, 1999, among AT&T Capital, Newcourt and The Chase Manhattan Bank
pursuant to which Newcourt has issued U.S. $1.0 billion aggregate principal
amount of notes, and the trustee under the Indenture dated as of March 1, 1999
among AT&T Capital, Newcourt and the Chase Manhattan Bank pursuant to which AT&T
Capital has issued U.S. $771 million aggregate principal amount of notes.
DESCRIPTION OF THE GUARANTEE
AT&T Capital will unconditionally guarantee the due and punctual payment of
principal, premium, if any, and interest on the Exchange Notes when and as the
same shall become due and payable, whether at maturity, upon redemption or
otherwise. The Guarantee will rank equally with all other unsecured and
unsubordinated obligations of AT&T Capital. The right of AT&T Capital and,
hence, the right of creditors of AT&T Capital, including holders of the Exchange
Notes as beneficiaries of Guarantee, to participate in any distribution of the
assets of any subsidiary of
35
AT&T Capital, whether upon liquidation, reorganization, or otherwise, is subject
to prior claims of creditors of each such subsidiary, except to the extent that
claims of AT&T Capital itself as a creditor of a subsidiary may be allowed.
NO ESTABLISHED TRADING MARKET FOR THE NOTES
The Exchange Notes are a new issue of securities with no established
trading market. Newcourt does not intend to list the Exchange Notes on any
national securities exchange or to seek admission thereof to trading in the
Nasdaq National Market System.
Newcourt has been advised by the initial purchasers that they intend to
make a market in the notes. However, they are not obligated to do so and any
market-making activities with respect to the notes may be discontinued at any
time without notice. In addition, such market making activity in the notes may
be limited during the pendency of the exchange offer. Accordingly, no assurance
can be given as to the liquidity of or the trading market for the notes.
Certain of the initial purchasers of the notes or their affiliates engage
from time to time in various general financing and banking transactions with
Newcourt and AT&T Capital. The Chase Manhattan Bank, the trustee, is an
affiliate of Chase Securities Inc., one of the initial purchasers of the notes.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Prior to the exchange offer, Blake, Cassels & Graydon, special Canadian tax
counsel to Newcourt, will issue an opinion to the effect that the following is a
summary of principal Canadian federal income tax considerations generally
applicable to a person (a 'United States holder') who acquires Exchange Notes
pursuant to the exchange offer in replacement of notes which were acquired by
the United States holders pursuant to the initial offering of the notes on
February 16, 1999 and who, for purposes of the Income Tax Act (Canada) (the
'Canadian Tax Act') and the Canada-United States Income Tax Convention (the
'Convention') and at all relevant times, is resident in the United States and
not resident or deemed to be resident in Canada, deals at arm's length with
Newcourt, holds Exchange Notes as capital property, does not use or hold and is
not deemed to use or hold Exchange Notes in or in the course of carrying on a
business in Canada and, in the case of a United States holder who carries on an
insurance business in Canada and elsewhere, establishes that the Exchange Notes
are not effectively connected with its Canadian insurance business.
This summary is based on the current provisions of the Convention and of
the Canadian Tax Act and the regulations thereunder in force as of the date
hereof, all specific proposals to amend the Canadian Tax Act and the regulations
publicly announced by the Ministry of Finance prior to the date hereof and
counsel's understanding as to certain changes to such proposals which will be
recommended by the Department of Finance (Canada) (the 'Proposed Amendments')
and counsels' understanding of the published administrative and assessing
practices of Revenue Canada, Customs, Excise & Taxation. The Proposed Amendments
may not be enacted and, if enacted, may not be enacted in the form proposed.
This description is not exhaustive of all possible Canadian federal income tax
consequences, and except for the Proposed Amendments, does not anticipate any
changes in law or administrative practice, whether by legislative, governmental
or judicial action, nor does it take into account Canadian provincial or
territorial or any non-Canadian tax considerations, which may differ
significantly from those discussed herein.
This summary is of a general nature only and is not, and should not be
interpreted as, legal or tax advice to any particular person, and no
representation is made with respect to the Canadian income tax consequences to
any person acquiring Exchange Notes. ACCORDINGLY, YOU SHOULD CONSULT YOUR OWN
TAX ADVISORS WITH RESPECT TO YOUR PARTICULAR CIRCUMSTANCES.
Payment of Interest, Principal or Premium. Under the Canadian Tax Act, the
payment by Newcourt of interest, principal or premium on the Exchange Notes to a
United States holder will be exempt from Canadian withholding tax.
36
Other Taxes. No other tax on income (including taxable capital gains) will
be payable under the Canadian Tax Act by a United States holder solely as a
consequence of the holding, redemption or disposition of Exchange Notes or the
receipt of interest, principal or premium thereon.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Prior to the Exchange Offer, Sidley & Austin, special United States tax
counsel to Newcourt, will issue an opinion to the effect that the following
information contained under this heading 'United States Federal Income Tax
Considerations' is a general discussion of the material United States federal
income tax considerations relevant to the exchange of your original notes for
Exchange Notes. This discussion is a summary for general information purposes
only, and does not consider all aspects of federal income taxation that may be
relevant to a particular investor in light of his, her or its personal
circumstances.
This discussion is based upon the United States federal income tax law now
in effect, which is subject to change, possibly retroactively. The description
does not consider the effect of any applicable foreign, state, local or other
tax laws or estate or gift tax considerations.
You should consult your own tax advisors regarding the particular United
States federal tax consequences to you of exchanging your original notes for
Exchange Notes, as well as any tax consequences that may arise under the laws of
any foreign, state, local or other taxing jurisdiction.
EXCHANGE OF NOTES FOR EXCHANGE NOTES
The exchange of your notes for Exchange Notes pursuant to the exchange
offer should not constitute a sale or exchange for federal income tax purposes.
Accordingly, not only should the exchange offer have no federal income tax
consequences to you if you exchange the notes you currently own for Exchange
Notes (i.e., there should be no change in your tax basis, and your holding
period should carry over to the Exchange Notes), but the federal income tax
consequences of holding and disposing of the Exchange Notes should also be the
same as those that would apply to the notes you currently own.
ERISA CONSIDERATIONS
OVERVIEW
The Employee Retirement Income Security Act of 1974, as amended ('ERISA'),
imposes certain requirements on employee benefit plans subject to ERISA ('ERISA
Plans') and prohibits certain transactions between ERISA Plans and persons who
are 'parties in interest' (as defined under ERISA) with respect to assets of
such ERISA Plans. Section 4975 of the Code prohibits a similar set of
transactions between certain plans or individual retirement accounts ('Code
Plans' and together with ERISA Plans, the 'Plans') and persons who are
'disqualified persons' (as defined in the Code) with respect to Code Plans.
Certain employee benefit plans, such as governmental plans and church plans (if
no election has been made under Section 410(d) of the Code), are not subject to
the requirements of ERISA or Section 4975 of the Code, and assets of such plans
may be invested in the Exchange Notes, subject to the provisions of other
applicable federal and state law. Any such plan which is qualified under Section
401(a) of the Code and exempt from taxation under Section 501(a) of the Code is,
however, subject to the prohibited transaction rules set forth in Section 503 of
the Code.
Investments by ERISA Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that investments be made in accordance with
the documents governing the ERISA Plan. An ERISA Plan fiduciary should consider,
among other factors, whether investing in the Exchange Notes is appropriate in
view of the overall investment policy and liquidity needs of the ERISA Plan.
37
PROHIBITED TRANSACTIONS
Section 406 of ERISA and Section 4975 of the Code prohibit parties in
interest and disqualified persons with respect to a ERISA Plans and Code Plans
from engaging in certain transactions involving such Plans or 'plan assets' of
such Plans, unless a statutory or administrative exemption applies to the
transaction. Section 4975 of the Code and Sections 502(i) and 502(l) of ERISA
provide for the imposition of certain excise taxes and civil penalties on
certain persons that engage or participate in such prohibited transactions.
Newcourt, AT&T Capital or the investment banks who were the initial purchasers
of the notes in December 1998 or certain affiliates thereof may be considered or
may become parties in interest or disqualified persons with respect to a Plan.
If this were so, the acquisition of holding of the notes by, on behalf of or
with 'plan assets' of such Plan may be considered to give rise to a 'prohibited
transaction' within the meaning of ERISA and/or Section 4975 of the Code, unless
an administrative exemption described below or some other exemption is
available.
Depending on the relevant facts and circumstances, certain prohibited
transaction exemptions may apply to the purchase or holding of the Exchange
Notes -- for example, Prohibited Transaction Class Exemption ('PTCE') 96-23,
which exempts certain transactions effected on behalf of a Plan by an 'in-house
asset manager'; PTCE 95-60, which exempts certain transactions between insurance
company general accounts and parties in interest; PTCE 91-38, which exempts
certain transactions between bank collective investment funds and parties in
interest; PTCE 90-1, which exempts certain transactions between insurance
company pooled separate accounts and parties in interest; PTCE 84-14, which
exempts certain transactions effected on behalf of a Plan by a 'qualified
professional asset manager'; or PTCE 75-1, which exempts certain transactions
between a Plan and certain broker-dealers. There can be no assurance that any of
these exemptions will apply with respect to any Plan's investment in the
Exchange Notes or, even if an exemption were deemed to apply, that any exemption
would apply to all prohibited transactions that may occur in connection with
such investment.
Due to the complexity of these rules and the penalties imposed, any
fiduciary or other Plan investor who proposes to invest assets of a Plan in the
Exchange Notes should consult with its counsel with respect to potential
consequences under ERISA and Section 4975 of the Code before doing so.
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC set forth in no-action
letters issued to third parties, we believe that Exchange Notes issued pursuant
to the exchange offer in exchange for old notes may be offered for resale,
resold and otherwise transferred by holders thereof (other than any holder which
is (1) an affiliate of Newcourt or AT&T Capital, (2) a broker-dealer who
acquired old notes directly from us, or (3) a broker dealer who acquired old
notes as a result of market-mailing or other trading activities) without
compliance with the registration and prospectus delivery provisions of the
Securities Act provided that such Exchange Notes are acquired in the ordinary
course of such holders' business, and such holders are not engaged in, and do
not intend to engage in, and have no arrangement or understanding with any
person to participate in, a distribution of such Exchange Notes; provided, that
broker-dealers ('participating broker-dealers') receiving Exchange Notes in the
exchange offer will be subject to a prospectus delivery requirement with respect
to resales of such Exchange Notes. To date, the SEC has taken the position that
participating broker-dealers may fulfill their prospectus delivery requirements
with respect to transactions involving an exchange of securities such as the
exchange pursuant to the exchange offer (other than a resale of an unsold
allotment from the sale of old notes to the initial purchasers of the old notes)
with the prospectus contained in the registration statement. Pursuant to the
registration rights agreement, Newcourt and AT&T Capital have agreed to permit
participating broker-dealers and other persons, if any, subject to similar
prospectus delivery requirements to use this prospectus in connection with the
resale of such Exchange Notes. Newcourt and AT&T Capital have agreed that, for a
period of 180 days after the date the registration statement of which this
prospectus is a part is declared effective by the SEC, it will
38
make this prospectus, and any amendment or supplement of this prospectus,
available to any broker-dealer that requests such documents in the letter of
transmittal.
Each holder of old notes who wishes to exchange its old notes for Exchange
Notes in the exchange offer will be required to make certain representations to
Newcourt and AT&T Capital as set forth in 'The Exchange Offer -- Terms and
Conditions of the Letter of Transmittal.' In addition, each holder who is a
broker-dealer and who receives Exchange Notes for its own account in exchange
for old notes that were acquired by it as a result of market-making activities
or other trading activities, will be required to acknowledge that it will
deliver a prospectus in connection with any resale by it of such Exchange Notes.
We will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealer who may receive
compensation in the form of commissions or concessions from any such
broker-dealers and/or the purchasers of any such distribution of such Exchange
Notes may be deemed to be an 'underwriter' within the meaning of the Securities
Act and any profit on any such resale of Exchange Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an 'underwriter' within the
meaning of the Securities Act.
Newcourt has agreed to pay all expenses incidental to the exchange offer
other than commissions and concession of any brokers or dealers and Newcourt and
AT&T Capital will indemnify holders of the notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act, as
set forth in the registration rights agreement.
LEGAL MATTERS
The validity of the Exchange Notes and Guarantee will be passed upon for
Newcourt by Wilentz, Goldman & Spitzer and Blake, Cassels & Graydon, Special
Counsels to Newcourt, and for AT&T Capital by Wilentz, Goldman & Spitzer,
Special Counsel to AT&T Capital and one or more of its Assistant General
Counsels.
EXPERTS
The consolidated financial statements for Newcourt incorporated by
reference in this prospectus, to the extent and for the periods indicated in
their report, have been audited by Ernst & Young LLP, Chartered Accountants and
are incorporated by reference herein in reliance on their report given on the
authority of that firm as experts in accounting and auditing.
39
[THIS PAGE INTENTIONALLY LEFT BLANK]
[Logo]
Offer To Exchange All
$1,000,000,000 6.875% Notes, Series B due February 16, 2005
For
$1,000,000,000 6.875% Exchange Notes, Series B due February 16, 2005
Guaranteed as to Payment of Principal, Premium, if any, and Interest by
[Logo]
PROSPECTUS
October 15, 1999
The Chase Manhattan Bank as Exchange Agent
PART II TO FORM F-4
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
Securities and Exchange Commission Filing fee. 278,000
Rating Agency Fees.......................................... 10,000
Fees and Expenses of Trustee................................ 5,000
Printing and Distributing Registration Statement,
Prospectus, Indenture and Miscellaneous Material.......... 130,000
Accountants' Fees........................................... 20,000
Legal Fees and Expenses..................................... 100,000
Blue Sky Fees and Expenses.................................. 40,000
Exchange Agent Fees and Expenses............................ 10,000
Miscellaneous Expenses...................................... 27,000
--------
Total.................................................. $620,000
--------
--------
- ------------
* Estimated, except for filing fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
NEWCOURT CREDIT GROUP INC. ('NEWCOURT')
Under the Business Corporations Act (Ontario) (the 'OBCA'), Newcourt may
indemnify a present or former director or officer of Newcourt or person who acts
or acted at Newcourt's request as a director or officer of another body
corporated of which Newcourt is or was a shareholder or creditor, and his or her
heirs and legal representatives:
(a) against all costs, charges and expenses, including an amount paid
to settle an action or satisfy a judgment, reasonably incurred by him or
her in respect of any civil, criminal or administrative action or
proceeding to which he or she is made a party by reason of being or having
been a director or officer of Newcourt;
(b) with court approval, against all costs, charges and expenses
reasonably incurred by him or her in connection with an action brought by
or on behalf of Newcourt or body corporate to procure a judgment in its
favour, to which he or she is made a party by reason of being or having
been a director or officer of Newcourt or body corporate; and
(c) in respect of all costs, charges and expenses reasonably incurred
by him or her in connection with the defense of any civil, criminal or
administrative action or proceeding to which he or she is made a party by
reason of having been a director or officer of Newcourt or body corporate,
if her or she was substantially successful on the merits or his or her
defense of the action or proceeding.
provided, in all cases, such director or officer (i) acted honestly and in good
faith with a view to the best interests of Newcourt, and (ii) in the case of a
criminal or administrative action or proceeding that is enforced by a monetary
penalty, such director or officer had reasonable grounds for believing that his
or her conduct was lawful.
Subject to the limitations contained in the OBCA, the By-laws of Newcourt
provide that every director or officer of Newcourt, every former director or
officer of Newcourt or a person who acts or acted at Newcourt's request as a
director or officer of a body corporate of which Newcourt is or was a
shareholder or creditor, and his heirs and legal representatives shall, from
time to time, be indemnified and saved harmless by Newcourt from and against all
costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by him in respect of any civil, criminal
or administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of Newcourt or body corporate if:
II-1
(1) he acted honestly and in good faith with a view to the best
interests of Newcourt; and
(2) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
Newcourt maintains directors' and officers' liability insurance with an
aggregate annual limit of liability of $40,000,000. Under this insurance
coverage, Newcourt is reimbursed for payments made to directors or officers of
Newcourt, as required or permitted by law or under provisions of the By-laws of
Newcourt, as indemnity for loss, including legal costs, arising from acts,
errors or omissions done or committed by officers or directors of Newcourt in
the course of their duties.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers or persons
controlling AT&T Capital or Newcourt pursuant to the foregoing provisions. AT&T
Capital and Newcourt have been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.
AT&T CAPITAL CORPORATION ('AT&T CAPITAL')
Section 145 of the General Corporation Law of Delaware and AT&T Capital's
Restated Certificate of Incorporation and By-Laws provide for the
indemnification of directors and officers under certain circumstances, and on a
case by case basis, against expenses reasonably incurred in connection with a
civil or criminal action to which he or she was a party, or threatened to be
made a party, by reason of being a director or officer. AT&T Capital's Resated
Certificate of Incorporation and By-Laws provide for indemnity of directors and
officers to the fullest extent permitted by law.
The directors and officers of AT&T Capital are covered by an insurance
policy indemnifying them against certain liabilities, including certain
liabilities arising under the Securities Act of 1933, as amended, which might be
incurred by them in such capacities and against which they cannot be indemnified
by AT&T Capital.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER
- ------
4A -- Form of Indenture dated as of February 15, 1999 (the
'Indenture'), among AT&T Capital, Newcourt and The Chase
Manhattan Bank, as trustee
4B -- Form of Series B Global Fixed Rate Note
4C -- Form of Guarantee dated as of February 15, 1999 by AT&T
Capital relating to the notes
4D -- Form of Registration Rights Agreement dated February 10,
1999 among Newcourt, AT&T Capital and Lehman Brothers Inc.
as Representative of the initial purchasers
4E -- Form of Exchange Note
5A -- Opinion of Blake, Cassels & Graydon, as to the legality
under Canadian and Ontario law of the securities being
registered
5B -- Opinion of Wilentz, Goldman & Spitzer, as to the legality
under New York law of the Securities and the Guarantees
being registered
5C -- Opinion of Eric S. Mandelbaum, assistant general counsel
to AT&T Capital, as to the legality under Federal and
Delaware corporate law of the Guarantees being registered
8A -- Opinion of Sidley and Austin as to certain tax matters
8B -- Opinion of Blake, Cassels & Graydon as to certain
Canadian tax matters
10 -- Form of Purchase Agreement dated February 10, 1999 among
Lehman Brothers Inc. as Representative of the initial
purchasers, Newcourt and AT&T Capital
12A -- Computation of Ratios of Earnings to Fixed Charges for
Newcourt
12B -- Computation of Ratios of Earnings to Fixed Charges for
AT&T Capital
23A -- Consent of Ernst & Young LLP
23B -- Consent of Blake, Cassels & Graydon (included in
Exhibit 5A)
23C -- Consent of Wilentz, Goldman & Spitzer (included in
Exhibit 5B)
23D -- Consent of Eric S. Mandelbaum, assistant general counsel
to AT&T Capital (included in Exhibit 5C)
23E -- Consent of Sidley and Austin (included in Exhibit 8A)
II-2
23F -- Consent of Blake, Cassels & Graydon (included in Exhibit
8B)
*24 -- Powers of Attorney executed by the directors and officers
who signed the registration statement (incorporated into
the signature pages on pages II-5, II-6 and II-7 of the
initial filing of this registration statement)
25 -- Statement of Eligibility of the trustee on Form T-1
99A -- Letter of Transmittal
99B -- Notice of Guaranteed Delivery
99C -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99D -- Letter from Registered Holders to Clients
- ------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) to file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
Provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Securities and
Exchange Commission by Newcourt pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing or Newcourt's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) (a) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of Form
F-4, including information contained in documents filed subsequent to the
effective date through the date of responding to the request, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or equally prompt means; and (6) to arrange
or provide for a facility in the United States for the purpose of
responding to such requests.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrants pursuant to the applicable
II-3
provisions referred to in Item 15 above or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification by them is against public policy as expressed in the Securities
Act of 1933, as amended and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each of the Registrants
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
For purposes of determining any liability under the Securities Act of 1933,
as amended, the information omitted from the form of prospectus filed as part of
a registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) of 497(b)
under the Securities Act of 1933, as amended, shall be deemed to be part of the
registration statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act of
1933, as amended, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
AT&T Capital Corporation certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form F-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Parsippany, State of New Jersey,
on the 15th day of October 1999.
AT&T CAPITAL CORPORATION
By /s/ SCOTT J. MOORE
................................
SCOTT J. MOORE
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Principal Executive Officer -- Chief
...................................... Executive Officer and Director
(STEVEN K. HUDSON)
* Principal Financial Officer and
...................................... Acting Principal Accounting
(BORDEN D. ROSIAK) Officer -- Chief Financial Officer
and Director
* Vice President and Controller By /s/ SCOTT J. MOORE
...................................... ....................
(THOMAS G. ADAMS) SCOTT J. MOORE
ATTORNEY-IN-FACT*
* Director
......................................
(DAVID F. BANKS) October 15, 1999
* Group President and Director
......................................
(BRADLEY D. NULLMEYER)
/s/ DANIEL A. JAUERNIG Director October 15, 1999
......................................
(DANIEL A. JAUERNIG)
----------------
* Scott J. Moore was appointed attorney-in-fact with power and attorney to
execute on behalf of such officers and directors pursuant to a power of
attorney incorporated into the signature page on page II-5 of the initial
filing of the Registration Statement.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Newcourt Credit Group Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form F-4 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Toronto, Province of Ontario, Country
of Canada, on the 15th day of October 1999.
NEWCOURT CREDIT GROUP INC.
By /S/ BORDEN D. ROSIAK
................................
NAME: BORDEN D. ROSIAK
TITLE: CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Principal Executive Officer -- Chief
...................................... Executive Officer and Director
(STEVEN K. HUDSON)
* Principal Financial Officer and
...................................... Principal Accounting
(BORDEN D. ROSIAK) Officer -- Chief Financial Officer
* Chairman of the Board and Director
......................................
(DAVID F. BANKS)
* Director
......................................
(THOMAS S. AXWORTHY)
* Director By /S/ SCOTT J. MOORE
...................................... ...................
(GERALD E. BEASLEY) SCOTT J. MOORE
ATTORNEY-IN-FACT*
* Director
......................................
(WILLIAM A. FARLINGER) October 15, 1999
* Director
......................................
(GUY HANDS)
* Director
......................................
(ROBERT F. KILIMNIK)
II-6
SIGNATURE TITLE DATE
--------- ----- ----
* Director
......................................
(DAVID A. MACINTOSH)
* Director
......................................
(DAVID D. MCKERROLL)
* Director
......................................
(RONALD A. MCKINLAY)
* Director
......................................
(PAUL G. MORTON)
* Director
......................................
(BRADLEY S. NULLMEYER)
* Director By /S/ SCOTT J. MOORE
...................................... ...................
(BRUCE I. ROBERTSON) SCOTT J. MOORE
ATTORNEY-IN-FACT*
* Director
......................................
(DAVID J. SHARPLESS) October 15, 1999
* Director
......................................
(TAKUMI SHIBATA)
* Director
......................................
(DR. STEVEN C. SMALL)
* Director
......................................
(RICHARD E. VENN)
* Director
......................................
(WILLIAM D. WALSH)
AT&T CAPITAL CORPORATION Authorized Representative in the October 15, 1999
United States
By: /S/ SCOTT J. MOORE
......................................
(SCOTT J. MOORE)
----------------
* Scott J. Moore was appointed attorney-in-fact with power and authority to
execute on behalf of such officers and directors pursuant to a power of
attorney incorporated into the signature pages on pages II-6 and II-7 of the
initial filing of this Registration Statement.
II-7
EXHIBIT INDEX
EXHIBIT
NUMBER
- ------
4A -- Form of Indenture dated as of February 15, 1999 (the
'Indenture'), among AT&T Capital, Newcourt and The Chase
Manhattan Bank, as trustee
4B -- Form of Series B Global Fixed Rate Note
4C -- Form of Guarantee dated as of February 15, 1999 relating
to the notes
4D -- Form of Registration Rights Agreement dated February 10,
1999 among Newcourt, AT&T Capital and Lehman Brothers Inc.
as representative of the initial purchasers
4E -- Form of Exchange Note
5A -- Opinion of Blake, Cassels & Graydon, as to the legality
under Canadian and Ontario law of the Securities being
registered
5B -- Opinion of Wilentz, Goldman & Spitzer, as to the legality
under New York law of the Guarantees being registered
5C -- Opinion of Eric S. Mandelbaum, assistant general counsel
to AT&T Capital, as to the legality under Federal and
Delaware corporate law of the Guarantees being registered.
8A -- Opinion of Sidley and Austin as to certain tax matters
8B -- Opinion of Blake, Cassels & Graydon as to certain
Canadian tax matters
10 -- Form of Purchase Agreement dated February 10, 1999 among
Lehman Brothers Inc. as representative of the initial
purchasers, Newcourt and AT&T Capital
12A -- Computation of Ratios of Earnings to Fixed Charges for
Newcourt
12B -- Computation of Ratios of Earnings to Fixed Charges for
AT&T Capital
23A -- Consent of Ernst & Young LLP
23B -- Consent of Blake, Cassels & Graydon (included in Exhibit
5A)
23C -- Consent of Wilentz, Goldman & Spitzer (included in
Exhibit 5B)
23D -- Consent of Eric S. Mandelbaum, assistant general counsel
to AT&T Capital (included in Exhibit 5C)
23E -- Consent of Sidley and Austin (included in Exhibit 8A)
23F -- Consent of Blake, Cassels & Graydon (included in
Exhibit 8B)
*24 -- Powers of Attorney executed by the directors and officers
who signed the registration statement (incorporated into
the signature pages on pages II-5, II-6 and II-7 of the
initial filing of this registration statement)
25 -- Statement of Eligibility of the Trustee on Form T-1
99A -- Letter of Transmittal
99B -- Notice of Guaranteed Delivery
99C -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99D -- Letter from Registered Holders to Clients
------------
* Previously filed.
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as............................... 'SS'