Filed Pursuant to: Rule 424(b)(5)
File No.: 333-71443 and 333-52725
Prospectus Supplement
(To Prospectus dated March 23, 1999)
Case Credit Corporation
$550,000,000
Medium-Term Notes, Series C
Due from 9 Months to 30 Years from Date of Issue
The following terms may apply to the Notes. The final terms of each Note will
be specified in a pricing supplement. For more information, see "Description of
Notes."
. Mature 9 months to 30 years from the date of issue
. May be subject to redemption at the option of Case Credit or repurchase at
the option of the holder
. Fixed or floating interest rate. The floating interest rate formula may be
based on:
-Commercial Paper Rate
-Prime Rate
-LIBOR
-Treasury Rate
-CD Rate
-Federal Funds Rate
-CMT Rate
-Another rate set forth in a pricing supplement
. Fixed rate notes may bear no interest when issued at a discount from the
principal amount due at maturity
. Certificated or book-entry form
. Interest paid on fixed rate notes on April 1 and October 1, unless otherwise
specified in the pricing supplement
. Interest paid on floating rate notes monthly, quarterly, semi-annually or
annually
. Minimum denomination of $1,000, increased in multiples of $1,000
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 supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
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Price to Agents' Proceeds to
Public Discount Case Credit
- --------------------------------------------------------------------
Per Note 100% .125%-.750% 99.875%-99.250%
- --------------------------------------------------------------------
Total $550,000,000 $687,500-$4,125,000 $549,312,500-$545,875,000
- --------------------------------------------------------------------
Case Credit is offering the Notes on a continuing basis through the Agents
listed below acting as agent or principal. Each Agent has agreed to use its
reasonable efforts to solicit offers to purchase the Notes.
J.P. Morgan & Co.
Chase Securities Inc.
Credit Suisse First Boston
Merrill Lynch & Co.
NationsBanc Montgomery Securities LLC
Salomon Smith Barney
April 21, 1999
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in any
pricing supplement, this prospectus supplement or the prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized. Any pricing supplement, this prospectus supplement and the
prospectus do not constitute an offer to sell or the solicitation of an offer
to buy any securities other than the securities to which they relate or any
offer to sell or the solicitation of any offer to buy such securities in any
jurisdiction in which such offer or solicitation is unlawful. Neither the
delivery of any pricing supplement, this prospectus supplement or the
prospectus nor any sale made hereunder or thereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of Case Credit since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of any
time subsequent to the date of such information.
TABLE OF CONTENTS
Prospectus Supplement
Page
----
Use of Proceeds............................................................ S-3
Description of Notes....................................................... S-3
Tax Considerations......................................................... S-14
Supplemental Plan of Distribution.......................................... S-22
Prospectus
Where You Can Find More Information........................................ 2
Incorporation of Information Case Credit Files with the SEC................ 2
Forward-Looking Statements................................................. 3
The Company................................................................ 4
Case Corporation........................................................... 5
Relationship with Case Corporation......................................... 5
Use of Proceeds............................................................ 6
Ratio of Earnings to Fixed Charges......................................... 6
Description of Securities.................................................. 6
Plan of Distribution....................................................... 17
Legal Matters.............................................................. 18
Experts.................................................................... 18
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USE OF PROCEEDS
The net proceeds to be received by Case Credit from the sale of the Notes to
which this prospectus supplement relates will be used to fund retail finance
programs offered by Case Credit to end-use customers and dealer rental
equipment finance programs offered by Case Credit to Case Corporation ("Case")
dealers and for other corporate purposes, including the repayment of
indebtedness. Pending such use, such net proceeds may be used to repay
commercial paper issued by Case Credit, which commercial paper is backed by
Case Credit's $1.2 billion revolving credit facility. On March 31, 1999,
indebtedness under commercial paper issued by Case Credit bore interest at the
weighted average rate of 5.11% per annum. Such commercial paper matures at
various dates, the latest such date, as of March 31, 1999, being May 7, 1999.
As of March 31, 1999, Case Credit had approximately $393 million in commercial
paper outstanding. Case Credit uses commercial paper to finance the purchase of
receivables. On March 31, 1999, Case Credit had no outstanding borrowings under
its revolving credit facility. Borrowings under the revolving credit facility
are required to be repaid no later than August 23, 2001 and such borrowings are
used to purchase receivables and for general corporate purposes. Borrowings
under the revolving credit facility bear interest at floating rates based upon
certain indices plus any applicable spread. Each of J.P. Morgan Securities
Inc., Chase Securities Inc., Credit Suisse First Boston Corporation,
NationsBanc Montgomery Securities LLC and Salomon Smith Barney Inc. or their
affiliates are lenders under Case Credit's revolving credit facility and, to
the extent the net proceeds to be received by Case Credit are used to repay
borrowings under the revolving credit facility, may receive a portion of such
proceeds. See "Supplemental Plan of Distribution."
DESCRIPTION OF NOTES
The following description of the terms of the Medium-Term Notes, Series C (the
"Notes") (referred to in the prospectus as "Offered Securities") supplements,
and to the extent inconsistent replaces, the description of the general terms
and provisions of Securities contained in the prospectus. The pricing
supplement for each offering of Notes will contain the specific information and
terms for that offering. The pricing supplement may also add, update or change
information contained in the prospectus and this prospectus supplement. It is
important for you to consider the information contained in the prospectus, the
prospectus supplement and the pricing supplement in making your investment
decision. Capitalized terms not otherwise defined in this prospectus supplement
have the meanings assigned to such terms in the prospectus.
General
The Notes will be unsecured obligations of Case Credit and constitute a single
series for purposes of the Indenture, dated as of October 1, 1997 (the
"Indenture"), between Case Credit and The Bank of New York, as Trustee (the
"Trustee"). The Notes are limited in amount to $550,000,000. The total amount
of Notes Case Credit is authorized to offer by means of this prospectus
supplement may be reduced due to Case Credit's sale of other debt securities.
For a description of the rights of the holders of Securities under the
Indenture, including the Notes, see "Description of Securities" in the
prospectus.
Case Credit will offer the Notes on a continuous basis. Unless redeemed by Case
Credit or repaid at the option of the holder thereof (the "Holder"), a Note
will mature on the date ("Stated Maturity") from 9 months to 30 years from its
date of issue that is specified on its face and in the applicable pricing
supplement. The "maturity" of any Note refers to the date on which its
principal becomes due and payable, whether at Stated Maturity, upon redemption
by Case Credit, repayment at the option of the Holder, or otherwise.
The Notes will be issuable as either Book-Entry Notes or Certificated
Registered Notes. The Notes will be issued in denominations of $1,000 and
integral multiples of $1,000 in excess thereof, unless otherwise specified in
the Notes.
The Notes will be sold in individual issues of Notes having such interest rate
or interest rate basis, if any, Stated Maturity and date of original issuance
as selected by the Agents and agreed to by Case Credit. Unless otherwise
indicated in the applicable pricing supplement, each Note will bear interest
at:
. a fixed rate; or
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. at a rate determined by reference to the Commercial Paper Rate, the Prime
Rate, LIBOR, the Treasury Rate, the CD Rate, the Federal Funds Rate, the CMT
Rate or another rate set forth in the applicable pricing supplement, as
adjusted by a Spread and/or Spread Multiplier, if any, as specified in the
applicable pricing supplement.
See "Description of Notes--Interest Rate."
The provisions of Sections 13.2 and 13.3 of the Indenture relating to
defeasance and covenant defeasance, described in the prospectus under
"Description of Securities--Defeasance and Covenant Defeasance," are applicable
to the Notes.
Unless so indicated in the applicable pricing supplement, the Indenture and
Notes do not contain any covenants other than those set forth herein and in the
prospectus. Accordingly, Case Credit may, subject to such covenants and its
other obligations and restrictions, incur additional indebtedness, pay
dividends, engage in transactions with stockholders and affiliates, make
investments it deems appropriate, create liens, transfer assets among
subsidiaries and engage in sales of assets and subsidiary stock. See
"Relationship with Case Corporation" in the prospectus concerning Case's
obligation to retain direct or indirect ownership of all of Case Credit's
voting stock and Case's obligation to make support payments to Case Credit
under some circumstances.
Redemption
If Case Credit may redeem a Note prior to its Stated Maturity, the pricing
supplement relating to such Note will indicate that such Note will be
redeemable at Case Credit's option on a date or dates specified prior to its
Stated Maturity at a price or prices set forth in the applicable pricing
supplement, together with accrued interest to the date of redemption. Unless
otherwise specified in the applicable pricing supplement, Case Credit may
redeem any of the Notes which are redeemable and remain outstanding either in
whole or from time to time in part upon not less than 30 nor more than 60 days'
notice. If Case Credit redeems less than all of the Notes with like tenor and
terms, the Trustee will select the Notes to be redeemed not more than 60 days
prior to the redemption date by such method as the Trustee deems fair and
appropriate. The Notes will not be subject to any sinking fund, unless
otherwise provided in the applicable pricing supplement.
Repayment and Repurchase
If a Note is to be repayable prior to its Stated Maturity at the option of the
Holder, the pricing supplement relating to the Note will indicate that the Note
will be repayable at the option of the Holder on a date or dates specified
prior to its Stated Maturity at a price or prices set forth in the applicable
pricing supplement, together with accrued interest to the date of repayment.
If applicable, Case Credit will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934 and any other securities laws or
regulations in connection with any such repayment.
In order for such Note to be repaid, Case Credit must receive at the corporate
trust office of the Trustee in New York, New York at least 30 days, but not
more than 60 days, prior to the specified repayment date, (a) the Note with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed or (b) a facsimile transmission or letter from a member of a national
securities exchange, the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States of America setting forth:
. the name of the Holder of the Note;
. the principal amount of the Note;
. the amount of the Note to be repaid (which shall not be less than the
minimum authorized denomination of such Note);
. the certificate number or a description of the tenor and terms of the Note;
and
. a statement that the option to elect repayment is being exercised thereby
and a guarantee that the Note with the form entitled "Option to Elect
Repayment" on the reverse of the Note duly completed will be received by the
Trustee not later than five Business Days after the date of such facsimile
transmission or letter.
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If the procedure described in clause (b) above is followed, the Note with such
form duly completed must be received by the Trustee not later than five
Business Days after the date of such facsimile transmission or letter. Exercise
of the repayment option by the Holder shall be irrevocable. The repayment
option may be exercised by the Holder for less than the entire principal amount
of the Note provided that the principal amount of the Note remaining
outstanding after repayment, if any, is an authorized denomination. The Trustee
will refer all questions as to the validity, eligibility (including time of
receipt) and acceptance of any Note for repayment to Case Credit whose
determination of such question will be final and binding.
Notwithstanding anything in this prospectus supplement to the contrary, unless
otherwise specified in the applicable pricing supplement, if a Note is a
Discount Note, the amount payable on such Note in the event of redemption or
repayment prior to its Stated Maturity shall be the Amortized Face Amount of
such Note as of the date of redemption or the date of repayment, as the case
may be. The "Amortized Face Amount" of a Discount Note will be the amount equal
to (a) the issue price set forth in the applicable pricing supplement plus (b)
that portion of the difference between the issue price and the principal amount
of such Note that has accrued at the yield to maturity set forth in the pricing
supplement (computed in accordance with generally accepted United States bond
yield computation principles) by such date of redemption or repayment. In no
event, however, shall the Amortized Face Amount of a Discount Note exceed its
principal amount.
Case Credit may at any time purchase Notes at any price in the open market or
otherwise. Case Credit may hold, resell or surrender such Notes to the Trustee
for cancellation.
Interest Rate
Each Note will bear interest from its date of issue or from the most recent
Interest Payment Date to which interest on such Note has been paid or duly
provided for at the annual fixed rate or at the annual rate determined pursuant
to the interest rate basis, as stated therein and in the applicable pricing
supplement, until the principal thereof is paid or made available for payment.
Interest will be payable on each Interest Payment Date and at Stated Maturity
(or, if applicable, upon redemption or repayment) as specified below under
"Payment of Principal and Interest."
Each Note will bear interest at either a fixed rate (a "Fixed Rate Note") or a
variable rate determined by reference to the interest rate basis (the "Interest
Rate Basis") as specified on the face of the Note and in the applicable pricing
supplement (a "Floating Rate Note"), which may be adjusted by adding or
subtracting the Spread or multiplying by the Spread Multiplier. A Floating Rate
Note may also have either or both of the following:
. a maximum numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period (a "Maximum Rate"); and
. a minimum numerical interest rate limitation, or floor, on the rate of
interest which may accrue during any interest period (a "Minimum Rate").
The "Index Maturity" is the period to maturity of the instrument or obligation
from which the Interest Rate Basis is derived, as specified in the applicable
pricing supplement. The "Spread" is the number of basis points specified in the
applicable pricing supplement as applying to the interest rate for such Note.
The "Spread Multiplier" is the percentage specified in the applicable pricing
supplement as applying to the interest rate for such Note. "Business Day" means
(a) for all Notes, each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to close and (b) for LIBOR Notes, also a
London Banking Day. "London Banking Day" means a day on which commercial banks
are open for business, including dealings in the U.S. dollar, in London.
The applicable pricing supplement for a Fixed Rate Note will designate an
annual fixed rate of interest payable on such Fixed Rate Note. The applicable
pricing supplement relating to a Floating Rate Note will designate as an
Interest Rate Basis one of the following:
. the Commercial Paper Rate, in which case such Note will be a Commercial
Paper Rate Note;
. the Prime Rate, in which case such Note will be a Prime Rate Note;
. LIBOR, in which case such Note will be a LIBOR Note;
S-5
. the Treasury Rate, in which case such Note will be a Treasury Rate Note;
. the CD Rate, in which case such Note will be a CD Rate Note;
. the Federal Funds Rate, in which case such Note will be a Federal Funds Rate
Note;
. the CMT Rate, in which case such Note will be a CMT Rate Note; or
. such other Interest Rate Basis as is set forth in such pricing supplement.
The applicable pricing supplement for a Floating Rate Note will specify, among
other things, the Interest Rate Basis and, if applicable, the Calculation
Agent, the Index Maturity, the Spread and/or Spread Multiplier, the Maximum
Rate, the Minimum Rate, the Initial Interest Rate, the Interest Payment Dates,
the Regular Record Dates, the Calculation Date, the Interest Determination Date
and the Interest Reset Date with respect to such Note.
The interest rate on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each an "Interest Reset Date"),
as specified in the applicable pricing supplement. The Interest Reset Date will
be:
. for Floating Rate Notes which reset daily, each Business Day;
. for Floating Rate Notes which reset weekly (other than Treasury Rate Notes),
the Wednesday of each week;
. for Treasury Rate Notes which reset weekly, the Tuesday of each week;
. for Floating Rate Notes which reset monthly, the third Wednesday of each
month;
. for Floating Rate Notes which reset quarterly, the third Wednesday of March,
June, September and December;
. for Floating Rate Notes which reset semi-annually, the third Wednesday of
the two months of each year specified in the applicable pricing supplement;
and
. for Floating Rate Notes which reset annually, the third Wednesday of the
month of each year specified in the applicable pricing supplement.
The interest rate in effect from the date of issue to the first Interest Reset
Date for a Floating Rate Note will be the Initial Interest Rate (as set forth
in the applicable pricing supplement). If any Interest Reset Date for any
Floating Rate Note would otherwise be a day that is not a Business Day for such
Floating Rate Note, the Interest Reset Date for such Floating Rate Note will be
postponed to the next day that is a Business Day with respect to such Floating
Rate Note, except that in the case of a LIBOR Note, if such Business Day is in
the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day.
The interest rate commencing on an Interest Reset Date will be the rate
determined by reference to the applicable Interest Rate Basis determined as of
the "Interest Determination Date." The Interest Determination Date pertaining
to an Interest Reset Date for a Commercial Paper Rate Note (the "Commercial
Paper Interest Determination Date"), for a Prime Rate Note (the "Prime Rate
Interest Determination Date"), for a CD Rate Note (the "CD Rate Interest
Determination Date"), for a Federal Funds Rate Note (the "Federal Funds Rate
Interest Determination Date") and for a CMT Rate Note (the "CMT Rate Interest
Determination Date") will be the second Business Day before the Interest Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for
a LIBOR Note (the "LIBOR Interest Determination Date") will be the second
London Banking Day before the Interest Reset Date. The Interest Determination
Date pertaining to an Interest Reset Date for a Treasury Rate Note (the
"Treasury Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on the Monday of each
week, unless that day is a legal holiday, in which case the auction is usually
held on the following Tuesday, except that such auction may be held on the
prior Friday. If an auction date falls on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date will be the first Business
Day immediately following such auction.
All percentages resulting from any calculations referred to in this prospectus
supplement will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (e.g., 9.876545% (or .09876545) being rounded to 9.87655%
(or .0987655)), and all amounts used in or resulting from such calculations
will be rounded to the nearest cent (with one-half cent being rounded upwards).
S-6
Unless otherwise provided in the applicable pricing supplement, the Trustee
will be the calculation agent (the "Calculation Agent") for Floating Rate
Notes. Upon the request of the Holder of any Floating Rate Note, the
Calculation Agent will provide the interest rate then in effect, and, if
determined, the interest rate which will become effective on the next Interest
Reset Date. The Calculation Agent's determination of any interest rate will be
final and binding in the absence of manifest error. The "Calculation Date,"
where applicable, pertaining to any Interest Determination Date will be the
earlier of the following:
. the tenth calendar day after such Interest Determination Date, or if any
such day is not a Business Day, the following Business Day; and
. the Business Day before the applicable Interest Payment Date or date of
Stated Maturity, as the case may be.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at a specified rate which will
be reset periodically based on the Commercial Paper Rate and a Spread and/or
Spread Multiplier, if any. Interest on Commercial Paper Rate Notes will be
payable on the dates specified on the face of the Commercial Paper Rate Note
and in the applicable pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
such date for commercial paper having the Index Maturity specified in the
applicable pricing supplement, as such rate shall be published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "Commercial
Paper--Nonfinancial." The following procedures will apply if the rate cannot be
set as described above:
. If the above rate is not published by 9:00 a.m., New York City time, on the
Calculation Date, then the Commercial Paper Rate will be the Money Market
Yield of the rate on such Commercial Paper Interest Determination Date for
commercial paper of the Index Maturity specified in the applicable pricing
supplement as published in the daily update of H.15 (519), available through
the world wide website of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/ update, or any successor
site or publication ("H.15 Daily Update") under the heading "Commercial
Paper--Nonfinancial."
. If by 3:00 p.m., New York City time, on the Calculation Date, the above rate
is not published in either H.15(519) or H.15 Daily Update, then the
Calculation Agent will determine the Commercial Paper Rate to be the Money
Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m.,
New York City time, on the Commercial Paper Interest Determination Date, of
three leading dealers of commercial paper in New York City selected by the
Calculation Agent (after consultation with Case Credit) for commercial paper
of the Index Maturity specified in the applicable pricing supplement placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from
a nationally recognized rating organization.
. If fewer than three dealers selected by the Calculation Agent are providing
quotes, the rate will be the same as the rate used in the prior interest
period.
"Money Market Yield" means a yield calculated in accordance with the following
formula:
Money Market Yield = 100 x 360 x D
360 - (D x M)
where "D" refers to the annual rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Prime Rate Notes
Prime Rate Notes will bear interest at a specified rate that will be reset
periodically based on the Prime Rate and a Spread and/or Spread Multiplier, if
any. Interest on Prime Rate Notes will be payable on the dates specified on the
face of the Prime Rate Note and in the applicable pricing supplement.
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Unless otherwise indicated in the applicable pricing supplement, "Prime Rate"
means, for any Prime Rate Interest Determination Date, the rate on such date as
published in H.15(519) under the heading "Bank Prime Loan." The following
procedures will apply if the rate cannot be set as described above:
. If the above rate is not published prior to 9:00 a.m., New York City time,
on the Calculation Date, then the Prime Rate will be the rate on such Prime
Rate Interest Determination Date as published in H.15 Daily Update opposite
the caption "Bank Prime Loan."
. If the above rate is not published by 3:00 p.m., New York City time, on the
Calculation Date in either H.15(519) or H.15 Daily Update, then the
Calculation Agent will determine the Prime Rate to be the arithmetic mean of
the rates of interest publicly announced by each bank that appears on the
Reuters Screen US Prime1 Page as such bank's prime rate or base lending rate
as in effect for such Prime Rate Interest Determination Date.
. If fewer than four such rates but more than one such rate appear on the
Reuters Screen US Prime1 Page for the Prime Rate Interest Determination
Date, then the Calculation Agent will determine the Prime Rate to be the
arithmetic mean of the prime rates quoted on the basis of the actual number
of days in the year divided by 360 as of the close of business on the Prime
Rate Interest Determination Date by at least two major money center banks in
New York City selected by the Calculation Agent (after consultation with
Case Credit).
. If fewer than two such rates appear on the Reuters Screen US Prime1 Page,
the Calculation Agent will determine the Prime Rate on the basis of the
rates furnished in New York City by three substitute banks or trust
companies organized and doing business under the laws of the United States,
or any state thereof, having total equity capital of at least $500,000,000
and being subject to supervision or examination by federal or state
authority, selected by the Calculation Agent (after consultation with Case
Credit) to quote such rate or rates.
. If the banks or trust companies selected by the Calculation Agent are not
providing quotes, the rate will be the same rate as used for the prior
interest period.
"Reuters Screen US Prime1 Page" means the display designated as page "US
Prime1" on the Reuters Monitor Money Rates Service (or such other page as may
replace the US Prime1 page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
LIBOR Notes
LIBOR Notes will bear interest at a specified rate that will be reset
periodically based on LIBOR and a Spread and/or Spread Multiplier, if any.
Interest on LIBOR Notes will be payable on the dates specified on the face of
the LIBOR Note and in the applicable pricing supplement.
Unless otherwise indicated in the applicable pricing supplement, LIBOR for any
Interest Reset Date will be determined by the Calculation Agent in accordance
with the following provisions:
.For a LIBOR Interest Determination Date, LIBOR will be:
- If "LIBOR Reuters" is specified in the applicable pricing supplement as
the method for calculating LIBOR, LIBOR will be the arithmetic mean of
the offered rates (unless the Designated LIBOR Page by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in U.S. dollars having the Index Maturity specified
in the pricing supplement, commencing on the applicable Interest Reset
Date, that appear on the Designated LIBOR Page as of 11:00 a.m., London
time, on such LIBOR Interest Determination Date.
- If "LIBOR Telerate" is specified in the applicable pricing supplement as
the method for calculating LIBOR, LIBOR will be the rate for deposits in
U.S. dollars having the Index Maturity specified in the pricing
supplement, commencing on the applicable Interest Reset Date, that
appears on the Designated LIBOR Page as of 11:00 a.m., London time, on
that LIBOR Interest Determination Date.
- If neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, LIBOR
will be calculated as if "LIBOR Telerate" had been specified.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the display
on the Reuters Monitor Money Rates Service (or any successor service) for the
purpose of displaying the London interbank rates of major banks for deposits in
U.S. dollars, (b) if "LIBOR Telerate" is specified in the applicable pricing
supplement as the method for calculating
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LIBOR, the display on the Bridge Telerate, Inc. Service (or any successor
service) ("Telerate") for the purpose of displaying the London interbank rates
of major banks for deposits in U.S. dollars, or (c) if neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified in the applicable pricing supplement, the
display on Telerate for the purpose of displaying the London interbank rates of
major banks for deposits in U.S. dollars.
If fewer than two offered rates appear, or if no such rate appears, then LIBOR
on such LIBOR Interest Determination Date will be determined as follows:
. The Calculation Agent will request the principal London office of each of
four major reference banks in the London interbank market as selected by the
Calculation Agent (after consultation with Case Credit) to provide the
Calculation Agent with its offered quotation for deposits in U.S. dollars
for the period of the Index Maturity specified in the applicable pricing
supplement, commencing on the applicable Interest Reset Date, to prime banks
in the London interbank market at approximately 11:00 a.m., London time, on
such LIBOR Interest Determination Date and in a principal amount that is
representative for a single transaction in U.S. dollars in such market at
such time (a "Representative Amount"). If at least two quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date will be
the arithmetic mean of such quotations.
. If fewer than two quotations are provided, then LIBOR determined on such
LIBOR Interest Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 a.m., New York City time or such other time
specified in the applicable pricing supplement, on such LIBOR Interest
Determination Date by three major banks in New York City, selected by the
Calculation Agent (after consultation with Case Credit) for loans in U.S.
dollars to leading European banks having the Index Maturity specified in the
applicable pricing supplement and in a Representative Amount.
. If fewer than three banks selected by the Calculation Agent are providing
quotes, the rate will be the same rate as used for the prior interest
period.
Treasury Rate Notes
Treasury Rate Notes will bear interest at a specified rate that will be reset
periodically based on the Treasury Rate and a Spread and/or Spread Multiplier,
if any. Interest on Treasury Rate Notes will be payable on the dates specified
on the face of the Treasury Rate Note and in the applicable pricing supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means:
. The rate from the auction held on the applicable Treasury Interest
Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on the
display on Telerate on page 56 or any other page as may replace page 56 on
that service ("Telerate Page 56") or page 57 or any other page as may
replace page 57 on that service ("Telerate Page 57").
. If the above rate is not published by 3:00 p.m., New York City time, on the
Calculation Date, then the Treasury Rate will be the Bond Equivalent Yield
of the rate for the applicable Treasury Bills as published in H.15 Daily
Update, or another recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High."
. If the above rate is not published by 3:00 p.m., New York City time, on the
Calculation Date, then the Treasury Rate will be the Bond Equivalent Yield
of the auction rate of the applicable Treasury Bills announced by the United
States Department of the Treasury.
. If the above rate is not announced by the United States Department of the
Treasury or if the Auction is not held, then the Treasury Rate will be the
Bond Equivalent Yield of the rate on the applicable Treasury Interest
Determination Date of Treasury Bills having the Index Maturity specified in
the applicable pricing supplement published in H.15(519) under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market."
. If the above rate is not published by 3:00 p.m., New York City time, on the
Calculation Date, then the Treasury Rate will be the rate on the applicable
Treasury Interest Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market."
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. If the above rate is not published by 3:00 p.m., New York City time, on the
Calculation Date, then the Calculation Agent will determine the Treasury
Rate to be the Bond Equivalent Yield of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 p.m., New York City time, on such
Treasury Interest Determination Date, of three primary United States
government securities dealers, which may include one or more of the Agents
or their affiliates, selected by the Calculation Agent (after consultation
with Case Credit), for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified in the applicable pricing
supplement.
. If fewer than three dealers selected by the Calculation Agent are providing
quotes, the rate will be the same rate used for the prior interest period.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
--------------
360 - (D x M)
where "D" refers to the applicable annual rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
CD Rate Notes
CD Rate Notes will bear interest at a specified rate that will be reset
periodically based on the CD Rate and a Spread and/or Spread Multiplier, if
any. Interest on CD Rate Notes will be payable on the dates specified on the
face of the CD Rate Note and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "CD Rate"
means, for any CD Rate Interest Determination Date, the rate on such date for
negotiable certificates of deposit having the Index Maturity specified in the
applicable pricing supplement as published in H.15(519) under the heading "CDs
(Secondary Market)." The following procedures will apply if the rate cannot be
set as described above:
. If the above rate is not published in H.15(519) by 9:00 a.m., New York City
time, on the Calculation Date, then the CD Rate will be the rate on the CD
Rate Interest Determination Date set forth in H.15 Daily Update for
certificates of deposit having the Index Maturity specified in the
applicable pricing supplement under the caption "CDs (Secondary Market)."
. If the above rate is not yet published in either H.15(519) or H.15 Daily
Update by 3:00 p.m., New York City time, on the Calculation Date, then the
Calculation Agent will determine the CD Rate to be the arithmetic mean of
the secondary market offered rates, as of 10:00 a.m., New York City time, on
the CD Rate Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City selected by
the Calculation Agent (after consultation with Case Credit) for negotiable
certificates of deposit of major United States money market banks of the
highest credit standing in the market for negotiable certificates of deposit
with a remaining maturity closest to the Index Maturity specified in the
applicable pricing supplement in a denomination of $5,000,000.
. If fewer than three dealers selected by the Calculation Agent are providing
quotes, the rate will be the same rate used for the prior interest period.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at a specified rate that will be
reset periodically based on the Federal Funds Rate and a Spread and/or Spread
Multiplier, if any. Interest on Federal Funds Rate Notes will be payable on the
dates specified on the face of the Federal Funds Rate Note and in the
applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "Federal Funds
Rate" means, for any Federal Funds Rate Interest Determination Date, the rate
on such date for Federal Funds as published in H.15(519)
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under the heading "Federal Funds (Effective)." The following procedures will
apply if the rate cannot be set as described above:
. If the above rate is not published by 9:00 a.m., New York City time, on the
Calculation Date, then the Federal Funds Rate will be the rate on the
Federal Funds Interest Determination Date as published in H.15 Daily Update
under the heading "Federal Funds (Effective)."
. If the above rate is not yet published in either H.15(519) or H.15 Daily
Update by 3:00 p.m., New York City time, on the Calculation Date, then the
Calculation Agent will determine the Federal Funds Rate to be the arithmetic
mean of the rates for the last transaction in overnight federal funds
arranged by each of three leading brokers of Federal Funds transactions in
New York City selected by the Calculation Agent (after consultation with
Case Credit) prior to 9:00 a.m., New York City time, on such Federal Funds
Interest Determination Date.
. If fewer than three brokers selected by the Calculation Agent are providing
quotes, the rate will be the same rate used for the prior interest period.
CMT Rate Notes
CMT Rate Notes will bear interest at a specified rate that will be reset
periodically based on the CMT Rate and a Spread and/or Spread Multiplier, if
any. Interest on CMT Rate Notes will be payable on the dates specified on the
face of such CMT Rate Notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement "CMT Rate"
means, for any CMT Rate Interest Determination Date, the rate displayed on the
Designated CMT Telerate Page under the caption ". . . Treasury Constant
Maturities. . .Federal Reserve Board Release H.15. . .Mondays Approximately
3:45 p.m." or any successor caption, under the column for the Designated CMT
Maturity Index (as defined below) for:
. If the Designated CMT Telerate Page is 7051, the rate on such CMT Rate
Interest Determination Date; or
. If the Designated CMT Telerate Page is 7052, the weekly or monthly average,
specified in the applicable pricing supplement, for the week or the month,
as applicable, ended immediately preceding the week or the month, as
applicable, in which the related CMT Rate Interest Determination Date
occurs.
The following procedures will apply if the rate cannot be set as described
above:
. If the above rate is no longer displayed on the relevant page or is not
displayed by 3:00 p.m., New York City time, on the Calculation Date, then
the CMT Rate will be the Treasury Constant Maturity rate for the Designated
CMT Maturity Index as published in the relevant H.15(519).
. If the above rate is no longer published in H.15(519) or is not published by
3:00 p.m., New York City time, on the Calculation Date, then the CMT Rate
will be the Treasury Constant Maturity rate for the Designated CMT Maturity
Index (or other United States Treasury rate for the Designated CMT Maturity
Index) for the CMT Rate Interest Determination Date with respect to the
Interest Reset Date as published by either the Board of Governors of the
Federal Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Telerate Page and published in the relevant
H.15(519).
. If the above information is not provided by 3:00 p.m., New York City time,
on the Calculation Date, then the Calculation Agent will determine the CMT
Rate to be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately 3:30 p.m.,
New York City time on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in New York City,
which may include one or more of the Agents or their affiliates, selected by
the Calculation Agent (after consultation with Case Credit) as described in
the following sentence. The Calculation Agent will select five Reference
Dealers and will eliminate the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes")
with an original maturity of approximately the Designated CMT Maturity Index
and a remaining term to maturity of not less than the Designated CMT
Maturity Index minus one year.
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. If the Calculation Agent is unable to obtain three such Treasury Note
quotations, then the Calculation Agent will determine the CMT Rate to be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the CMT
Rate Interest Determination Date of three Reference Dealers in New York City
(selected using the same method described above) for Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to
the Designated CMT Maturity Index and in an amount of at least $100,000,000.
. If three or four (but not five) of such Reference Dealers are providing
quotes, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will
be eliminated.
. If fewer than three Reference Dealers selected by the Calculation Agent are
providing quotes, the rate will be the same as the rate used in the prior
interest period.
If two Treasury Notes with an original maturity have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Telerate (or any
successor service) on the page designated in the applicable pricing supplement,
for the purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified in the applicable pricing supplement,
the Designated CMT Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified
in the applicable pricing supplement for which the CMT Rate will be calculated.
If no such maturity is specified in the applicable pricing supplement, the
Designated CMT Maturity Index shall be two years.
Payment of Principal and Interest
Except for interest payable at Stated Maturity (or, if applicable, upon
redemption or repayment), interest will be payable to the person in whose name
a Note is registered at the close of business on the Regular Record Date before
an Interest Payment Date. Interest payable at Stated Maturity (or, if
applicable, upon redemption or repayment) will be payable to the person to whom
principal shall be payable. The first payment of interest on any Note
originally issued between a Regular Record Date and an Interest Payment Date or
on an Interest Payment Date will be made on the second Interest Payment Date
following its date of issue to the registered owner on the Regular Record Date
relating to the second Interest Payment Date. Unless otherwise indicated in the
applicable pricing supplement, the "Regular Record Date" for any Floating Rate
Note will be the date 15 calendar days prior to each Interest Payment Date,
whether or not such date is a Business Day, and the "Regular Record Date" with
respect to any Fixed Rate Note will be the March 15 or September 15 immediately
preceding the April 1 and October 1 Interest Payment Date, whether or not such
date is a Business Day.
Unless otherwise indicated in the applicable pricing supplement, interest will
be payable, in the case of Fixed Rate Notes, on April 1 and October 1 of each
year. Unless otherwise indicated in the applicable pricing supplement, interest
for Floating Rate Notes will be payable as follows (each such date, an
"Interest Payment Date"):
. for Floating Rate Notes that reset daily, weekly or monthly, on the third
Wednesday of each month or on the third Wednesday of March, June, September
and December of each year (as indicated in the applicable pricing
supplement);
. for Floating Rate Notes that reset quarterly, on the third Wednesday of
March, June, September and December of each year;
. for Floating Rate Notes that reset semi-annually, on the third Wednesday of
the two months of each year specified in the applicable pricing supplement;
and
. for Floating Rate Notes that reset annually, on the third Wednesday of the
month specified in the applicable pricing supplement.
S-12
In each case, interest will also be paid at Stated Maturity (or, if applicable,
upon redemption or repayment). If an Interest Payment Date for any Floating
Rate Note (other than at the Stated Maturity) would fall on a day that is not a
Business Day with respect to such Note, such Interest Payment Date will be the
following Business Day (or, in the case of a LIBOR Note, if such Business Day
falls in the next calendar month, the immediately prior Business Day). If the
Stated Maturity (or date of redemption or repayment) of any Floating Rate Note
would fall on a day that is not a Business Day, the payment of the principal,
premium, if any, and any interest due on any Note may be made on the following
Business Day, and no interest will accrue as a result of such delayed payment.
Payments of interest will include interest accrued to but excluding the
applicable Interest Payment Date or date of Stated Maturity, redemption or
repayment, as the case may be.
For a Floating Rate Note, accrued interest from the date of issue or from the
last date to which interest has been paid is calculated by multiplying the face
amount of such Floating Rate Note by an accrued interest factor computed by
adding the interest factor calculated for each day from the date of issue, or
from the last date to which interest has been paid, to but excluding the date
for which accrued interest is being calculated. The interest factor (expressed
as a decimal) for each such day is computed by dividing the interest rate
(expressed as a decimal) applicable to such date by 360 for Commercial Paper
Rate Notes, Prime Rate Notes, LIBOR Notes, CD Rate Notes and Federal Funds Rate
Notes or by the actual number of days in the year for Treasury Rate Notes and
CMT Rate Notes. Interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.
Any payment on any Fixed Rate Note due on any day which is not a Business Day
need not be made on such day, but may be made on the following Business Day
with the same force and effect as if made on the due date, and no interest
shall accrue for the period from and after such date.
Payment of the principal, and premium, if any, and any interest due on any Note
(other than a Book-Entry Note or a Certificated Registered Note) will be paid
at the corporate trust office of the Trustee in New York, New York. Payment of
interest on a Certificated Registered Note shall be paid by draft payable to
the holder of record on the Regular Record Date and payment of principal,
premium, if any, and any interest due with respect to such a Note at the Stated
Maturity shall be payable only upon surrender of such Note. All payments of
principal, premium, if any, and interest on Book-Entry Notes shall be payable
as described below under "Book-Entry Notes."
Book-Entry Notes
At its option, Case Credit may designate in the pricing supplement that the
Notes will be issued only in the form of one or more fully registered Notes
("Book-Entry Notes"). Upon issuance, all Book-Entry Notes having the same terms
and the same Issue Date may be represented by one or more global securities.
Each global security representing Book-Entry Notes will be deposited with, or
on behalf of, The Depository Trust Company (the "Depository"), located in the
Borough of Manhattan, New York City, and will be registered in the name of the
Depository or a nominee of the Depository. No global security or global
securities described above may be transferred except as a whole by the
Depository for such global security or global securities to a nominee of the
Depository or by a nominee of the Depository to the Depository or to another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. For a
description of the Depository and the Depository's book-entry system, see
"Description of Securities--Book-Entry Securities" in the prospectus.
Book-Entry Notes represented by a global security are exchangeable for
Certificated Registered Notes, having the same terms and of an equal aggregate
principal amount, only if:
. the Depository notifies Case Credit that it is unwilling or unable to
continue as Depository for such global security or if at any time the
Depository ceases to be a clearing agency registered under the Exchange Act,
and a successor Depository is not appointed by Case Credit within 90 days;
. Case Credit in its sole discretion determines that such Book-Entry Notes
issued in the form of a global security shall be exchangeable for
Certificated Registered Notes; or
. the Depository for such global security surrenders such global security in
exchange in whole or in part for individual Certificated Registered Notes of
like tenor and terms in definitive form on such terms as are acceptable to
Case Credit and the Depository.
S-13
In any such exchange, Case Credit will execute and the Trustee will
authenticate and deliver individual Certificated Registered Notes in definitive
registered form in authorized denominations. Upon the exchange of a global
security for individual Certificated Registered Notes, such global security
will be canceled by the Trustee. Certificated Registered Notes issued in
exchange for a global security will be registered in such names and in such
authorized denominations as the Depository for such global security, pursuant
to instructions from its Direct Participants or Indirect Participants or
otherwise, shall instruct the Trustee. The Trustee will deliver such
Certificated Registered Notes to the persons in whose names such Certificated
Registered Notes are so registered.
Except as provided above, if a Note is designated a Book-Entry Note in the
applicable pricing supplement, owners of beneficial interests in such Book-
Entry Note will not be entitled to receive physical delivery of Certificated
Registered Notes in definitive form and no global security representing the
Notes shall be exchangeable, except for another global security having the same
terms and denomination to be registered in the name of the Depository or its
nominee. Accordingly, each person owning a beneficial interest must rely on the
procedures of the Depository and, if such person is not a Participant, on the
procedures of the Participant through which such person owns its beneficial
interest, to exercise any rights of a holder under the Notes.
Certificated Registered Notes
At its option, Case Credit may designate in the pricing supplement that the
Notes will be issued in certificated registered form, without coupons
("Certificated Registered Notes"). Without charge (a) Certificated Registered
Notes may be exchanged, upon presentation and surrender at a designated office
or agency of the Trustee in New York City for Certificated Registered Notes of
other authorized denominations; and (b) any Certificated Registered Note may be
transferred by the registered holder, or by its attorney-in-fact duly
authorized in writing, at such office or agency upon presentation and surrender
of such Note for cancellation, and upon any such transfer a new Certificated
Registered Note or Notes, of authorized denominations, in the same aggregate
principal amount, subject to the same terms and conditions will be issued to
the transferee. Transfers or exchanges of Certificated Registered Notes may not
be effected during the 15-day period before the mailing of a notice of
redemption.
Amortizing Notes
Case Credit may offer Notes for which payments of principal and interest are
made in equal installments over the life of such Notes ("Amortizing Notes").
Unless otherwise specified in the applicable pricing supplement, interest on
each Amortizing Note will be computed on the basis of a 360-day year of twelve
30-day months. Payments on Amortizing Notes will be applied first to interest
due and payable on the Note and then to the reduction of the unpaid principal
amount on the Note. Further information concerning additional terms and
provisions of Amortizing Notes will be specified in the applicable pricing
supplement, including a table setting forth repayment information for such
Amortizing Notes.
TAX CONSIDERATIONS
The following is a summary of the principal United States federal income tax
consequences of ownership of Notes. In general, it deals only with Notes held
as capital assets by initial purchasers who are the beneficial owners thereof
("holders") and does not consider all aspects of United States federal income
taxation that may be relevant to prospective purchasers of Notes. This summary
does not address the federal income tax consequences to special classes of
purchasers, such as dealers in securities or currencies, banks, tax-exempt
organizations, life insurance companies, persons holding Notes as a hedge
against currency risks or as part of a straddle or conversion transaction or
persons whose functional currency is not the U.S. dollar. The summary is based
on the Internal Revenue Code of 1986, as amended (the "Code"), its legislative
history, existing and proposed regulations thereunder, published rulings and
court decisions, all as currently in effect and all subject to change at any
time, perhaps with retroactive effect.
Prospective purchasers of Notes should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction, of the ownership of Notes.
S-14
United States Holders
Payments of Interest
Interest on a Note, other than interest on a "Discount Note" that is not
"qualified stated interest" (each as defined below under "Original Issue
Discount--General"), will be taxable to a United States Holder as ordinary
income at the time it is received or accrued, depending on the holder's method
of accounting for tax purposes. As used herein, the term "United States Holder"
means a holder of a Note who or that is for United States federal income tax
purposes either (a) a citizen or resident of the United States, (b) a
corporation or partnership (or other entity treated as a corporation or
partnership), other than a partnership that is not treated as a U.S. person
under applicable Treasury regulations, created or organized in the United
States or organized under the laws of the United States or of any State
thereof, (c) an estate the income of which is subject to United States federal
income taxation regardless of its source or (d) a trust described in Section
7701(a)(30) of the Code (taking into account changes thereto and associated
effective dates, elections and transition rules). The term "United States
Holder" also includes certain former citizens and residents of the United
States whose income and gain on the Notes will be subject to United States
taxation. As used herein, the term "Foreign Holder" means a holder of a Note
who or that is not a United States Holder.
Original Issue Discount
General. A Note, other than a Note with a term of one year or less (a "Short-
Term Note"), will be treated as issued at an original issue discount (a
"Discount Note") if the excess of the Note's "stated redemption price at
maturity" over its "issue price" is more than a "de minimis amount" (as defined
below). Generally, the issue price of a Note will be the first price at which a
substantial amount of Notes included in the issue of which the Note is a part
is sold to other than bond houses, brokers, or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers. The
stated redemption price at maturity of a Note is the total of all payments
provided by the Note that are not payments of "qualified stated interest." A
qualified stated interest payment is generally any one of a series of stated
interest payments on a Note that are unconditionally payable at least annually
at a single fixed rate (with certain exceptions for lower rates paid during
some periods) applied to the outstanding principal amount of the Note. Special
rules for "Variable Rate Notes" (as defined below) are described below under
"Original Issue Discount--Variable Rate Notes."
In general, if the excess of a Note's stated redemption price at maturity over
its issue price is "de minimis," i.e., if it is less than 1/4 of 1 percent of
the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity (the "de minimis amount"), then such excess, if
any, constitutes "de minimis original issue discount" and the Note is not a
Discount Note. In the case of a Note that provides for payment of any amount
other than qualified stated interest before maturity, e.g., an Amortizing Note,
the weighted average maturity of the Note is substituted for the complete years
to maturity in the calculation. Unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, a United
States Holder of a Note with de minimis original issue discount must include
such de minimis original issue discount in income as stated principal payments
on the Note are made. The includible amount with respect to each such payment
will equal the product of the total amount of the Note's de minimis original
issue discount and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
United States Holders of Discount Notes having a maturity of more than one year
from their date of issue must generally include original issue discount ("OID")
in income calculated on a constant-yield method before the receipt of cash
attributable to such income, and generally will have to include in income
increasingly greater amounts of OID over the life of the Note. The amount of
OID includible in income by a United States Holder of a Discount Note is the
sum of the daily portions of OID with respect to the Discount Note for each day
during the taxable year or portion of the taxable year on which the United
States Holder holds such Discount Note ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to that accrual period. Accrual periods with respect to a
Note may be of any length and may vary in length over the term of the Note as
long as (a) no accrual period is longer than one year and (b) each scheduled
payment of interest or principal on the Note occurs on either the final or
first day of an accrual period. The amount of OID allocable to an accrual
period equals the excess of (a) the product of the Discount Note's adjusted
issue price at the beginning of the accrual period and such Note's yield to
maturity (determined on the basis of compounding at the close of each accrual
period and properly adjusted for
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the length of the accrual period) over (b) the sum of the payments of qualified
stated interest on the Note allocable to the accrual period. The "adjusted
issue price" of a Discount Note at the beginning of any accrual period is the
issue price of the Note increased by (x) the amount of accrued OID for each
prior accrual period and decreased by (y) the amount of any payments previously
made on the Note that were not qualified stated interest payments. For purposes
of determining the amount of OID allocable to an accrual period, if an interval
between payments of qualified stated interest on the Note contains more than
one accrual period, the amount of qualified stated interest payable at the end
of the interval (including any qualified stated interest that is payable on the
first day of the accrual period immediately following the interval) is
allocated pro rata on the basis of the relative length of each accrual period
in the interval, and the adjusted issue price at the beginning of each accrual
period in the interval must be increased by the amount of any qualified stated
interest that has accrued prior to the first day of the accrual period but that
is not payable until the end of the interval. The amount of OID allocable to an
initial short accrual period may be computed using any reasonable method if all
other accrual periods other than a final short accrual period are of equal
length. The amount of OID allocable to the final accrual period is the
difference between (x) the amount payable at the maturity of the Note (other
than any payment of qualified stated interest) and (y) the Note's adjusted
issue price as of the beginning of the final accrual period.
Acquisition Premium. A United States Holder that purchases a Discount Note for
an amount less than or equal to the Note's remaining stated redemption price at
maturity, but in excess of its adjusted issue price (as determined above under
"Original Issue Discount--General") (any such excess being "acquisition
premium"), and that does not make the election described below under "Election
to Treat All Interest as Original Issue Discount," shall reduce each daily
portion of OID by a fraction thereof, the numerator of which is the excess of
the United States Holder's adjusted basis in the Note immediately after its
purchase over the adjusted issue price of the Note, and the denominator of
which is the excess of the sum of all amounts payable on the Note after the
purchase date, other than payments of qualified stated interest, over the
Note's adjusted issue price.
Market Discount. A Note, other than a Short-Term Note, will be treated as
purchased at a market discount (a "Market Discount Note") if the Note's stated
redemption price at maturity or, in the case of a Discount Note, the Note's
"revised issue price," exceeds the amount for which the United States Holder
purchased the Note unless such difference is less than the specified "de
minimus" amount. If such excess is not sufficient to cause the Note to be a
Market Discount Note, then such excess constitutes "de minimis market discount"
and such Note is not subject to the rules discussed in the following
paragraphs. The Code provides that, for these purposes, the "revised issue
price" of a Note generally equals its issue price, increased by the amount of
any OID that has previously accrued on the Note.
Any gain recognized on the maturity or disposition of a Market Discount Note
will be treated as ordinary income to the extent that such gain does not exceed
the accrued market discount on such Note. Also, any partial principal payment
on a Market Discount Note (e.g., on an Amortizing Note which is a Market
Discount Note) is includible in gross income as ordinary income to the extent
such payment does not exceed the accrued market discount on such Note. In the
case of any disposition of or subsequent partial principal payment on such
Note, the amount of accrued market discount is reduced by the amount of the
previous partial principal payment or payments included in gross income as
ordinary income. Alternatively, a United States Holder of a Market Discount
Note may elect to include market discount in income currently over the life of
the Note. Such an election shall apply to all debt instruments with market
discount acquired by the electing United States Holder on or after the first
day of the first taxable year to which the election applies. This election may
not be revoked without the consent of the Internal Revenue Service (the
"Service").
Market discount on a Market Discount Note will accrue on a straight-line basis
unless the United States Holder elects to accrue such market discount on a
constant-yield method. Such an election shall apply only to the Note with
respect to which it is made and may not be revoked. A United States Holder of a
Market Discount Note that does not elect to include market discount in income
currently generally will be required to defer deductions for interest on
borrowings allocable to such Note in an amount not exceeding the accrued market
discount on such Note until the maturity or disposition of such Note.
Pre-Issuance Accrued Interest. If (a) a portion of the initial purchase price
of a Note is attributable to pre-issuance accrued interest, (b) the first
stated interest payment on the Note is to be made within one year of the
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Note's issue date and (c) such payment will equal or exceed the amount of pre-
issuance accrued interest, then the United States Holder may elect to decrease
the issue price of the Note by the amount of pre-issuance accrued interest. In
that event, a portion of the first stated interest payment will be treated as a
return of the excluded pre-issuance accrued interest and not as an amount
payable on the Note.
Notes Subject to Contingencies Including Optional Redemption. If a Note
provides for an alternative payment schedule or schedules applicable upon the
occurrence of a contingency or contingencies (other than a remote or incidental
contingency), whether such contingency relates to payments of interest or of
principal, if the timing and amount of the payments that comprise each payment
schedule are known as of the issue date and if one of such schedules is
significantly more likely than not to occur, the yield and maturity of the Note
are determined by assuming that the payments will be made according to that
payment schedule. If there is no single payment schedule that is significantly
more likely than not to occur (other than because of a mandatory sinking fund),
the Note will be subject to the general rules that govern contingent payment
obligations. These rules will be discussed in an applicable pricing supplement.
Notwithstanding the general rules for determining yield and maturity in the
case of Notes subject to contingencies, if Case Credit or the holder has an
unconditional option or options that, if exercised, would require payments to
be made on the Note under an alternative payment schedule or schedules, then
(a) in the case of an option or options of Case Credit, Case Credit will be
deemed to exercise or not exercise an option or combination of options in the
manner that minimizes the yield on the Note and (b) in the case of an option or
options of the holder, the holder will be deemed to exercise or not exercise an
option or combination of options in the manner that maximizes the yield on the
Note. If both Case Credit and the holder have options described in the
preceding sentence, those rules apply to such options in the order in which
they may be exercised. For purposes of those calculations, the yield on the
Note is determined by using any date on which the Note may be redeemed or
repurchased as the maturity date and the amount payable on such date in
accordance with the terms of the Note as the principal amount payable at
maturity.
If a remote contingency actually occurs or does not occur contrary to an
assumption made according to the above rules or if an incidental contingency
becomes sufficiently fixed in amount or timing (a "change in circumstances")
then, except to the extent that a portion of the Note is repaid as a result of
the change in circumstances and solely for purposes of determining the amount
and accrual of OID, the yield and maturity of the Note are redetermined by
treating the Note as having been retired and reissued on the date of the change
in circumstances for an amount equal to the Note's adjusted issue price on that
date.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on a Note
using the constant-yield method described above under the heading "Original
Issue Discount--General," with the modifications described below. For purposes
of this election, interest includes stated interest, OID, de minimis original
issue discount, market discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium (described below under
"Notes Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal its cost to the
electing United States Holder, the issue date of the Note will be the date of
its acquisition by the electing United States Holder, and no payments on the
Note will be treated as payments of qualified stated interest. This election
will generally apply only to the Note with respect to which it is made and may
not be revoked without the consent of the Service. If this election is made
with respect to a Note with amortizable bond premium, then the electing United
States Holder will be deemed to have elected to apply amortizable bond premium
against interest with respect to all debt instruments with amortizable bond
premium (other than debt instruments the interest on which is excludable from
gross income) held by the electing United States Holder as of the beginning of
the taxable year in which the Note with respect to which the election is made
is acquired or thereafter acquired. The deemed election with respect to
amortizable bond premium may not be revoked without the consent of the Service.
If the election to apply the constant-yield method to all interest on a Note is
made with respect to a Market Discount Note, the electing United States Holder
will be treated as having made the election discussed above under "Original
Issue Discount--Market Discount" to include market discount in income currently
over the life of all debt instruments held or thereafter acquired by such
United States Holder.
S-17
Variable Rate Notes. A "Variable Rate Note" is a Note that: (a) has an issue
price that does not exceed the total noncontingent principal payments by more
than the lesser of (1) the product of (x) the total noncontingent principal
payments, (y) the number of complete years to maturity from the issue date and
(z) .015, or (2) 15 percent of the total noncontingent principal payments and
(b) does not provide for stated interest other than stated interest compounded
or paid at least annually at (A) one or more "qualified floating rates," (B) a
single fixed rate and one or more qualified floating rates, (C) a single
objective rate or (D) a single fixed rate and a single objective rate that is a
"qualified inverse floating rate."
A qualified floating rate or objective rate in effect at any time during the
term of the instrument must be set at a "current value" of that rate. A
"current value" of a rate is the value of the rate on any day that is no
earlier than 3 months prior to the first day on which that value is in effect
and no later than 1 year following that first day.
A variable rate is a "qualified floating rate" if (a) variations in the value
of the rate can reasonably be expected to measure contemporaneous variations in
the cost of newly borrowed funds in the currency in which the Note is
denominated or (b) it is equal to the product of such a rate and either (x) a
fixed multiple that is greater than 0.65 but not more than 1.35 or (y) a fixed
multiple that is greater than 0.65 but not more than 1.35, increased or
decreased by a fixed rate. If a Note provides for two or more qualified
floating rates that (a) are within 0.25 percentage points of each other on the
issue date or (b) can reasonably be expected to have approximately the same
values throughout the term of the Note, the qualified floating rates together
constitute a single qualified floating rate. A rate is not a qualified floating
rate, however, if the rate is subject to certain restrictions (including caps,
floors, governors or other similar restrictions) unless such restrictions are
fixed throughout the term of the Note or are not reasonably expected to
significantly affect the yield on the Note.
An "objective rate" is a rate, other than a qualified floating rate, that is
determined using a single, fixed formula and that is based on objective
financial or economic information that is not within the control of or unique
to the circumstances of the issuer or a related party. A variable rate is not
an objective rate, however, if it is reasonably expected that the average value
of the rate during the first half of the Note's term will be either
significantly less than or significantly greater than the average value of the
rate during the final half of the Note's term. An objective rate is a
"qualified inverse floating rate" if (a) the rate is equal to a fixed rate
minus a qualified floating rate and (b) the variations in the rate can
reasonably be expected to inversely reflect contemporaneous variations in the
cost of newly borrowed funds.
If interest on a Note is stated at a fixed rate for an initial period of one
year or less followed by either a qualified floating rate or an objective rate
for a subsequent period and (a) the fixed rate and the qualified floating rate
or objective rate have values on the issue date of the Note that do not differ
by more than 0.25 percentage points or (b) the value of the qualified floating
rate or objective rate is intended to approximate the fixed rate, the fixed
rate and the qualified floating rate or the objective rate constitute a single
qualified floating rate or objective rate. Under these rules, Commercial Paper
Rate Notes, Prime Rate Notes, LIBOR Notes, Treasury Rate Notes, CD Rate Notes,
Federal Funds Rate Notes and CMT Rate Notes will generally be treated as
Variable Rate Notes.
In general, if a Variable Rate Note provides for stated interest at a single
qualified floating rate or objective rate, all stated interest on the Note is
qualified stated interest and the amount of OID, if any, is determined by
using, in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date of the qualified floating rate or
qualified inverse floating rate, or, in the case of any other objective rate, a
fixed rate that reflects the yield reasonably expected for the Note.
If a Variable Rate Note does not provide for stated interest at a single
qualified floating rate or a single objective rate and also does not provide
for interest payable at a fixed rate (other than at a single fixed rate for an
initial period), the amounts of interest and OID accruals on the Note are
generally determined by (a) determining a fixed rate substitute for each
variable rate provided under the Variable Rate Note (generally, the value of
each variable rate as of the issue date or, in the case of an objective rate
that is not a qualified inverse floating rate, a rate that reflects the
reasonably expected yield on the Note), (b) constructing the equivalent fixed
rate debt instrument (using the fixed rate substitutes described above), (c)
determining the amount of qualified stated interest and OID with respect to the
equivalent fixed rate debt instrument and (d) making the appropriate
adjustments for actual variable rates during the applicable accrual period.
S-18
If a Variable Rate Note provides for stated interest either at one or more
qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph with the
modification that the Variable Rate Note is treated, for purposes of the first
three steps of the determination, as if it provided for a qualified floating
rate (or a qualified inverse floating rate, as the case may be) rather than the
fixed rate. The qualified floating rate (or qualified inverse floating rate)
replacing the fixed rate must be such that the fair market value of the
Variable Rate Note as of the issue date would be approximately the same as the
fair market value of an otherwise identical debt instrument that provides for
the qualified floating rate (or qualified inverse floating rate) rather than
the fixed rate.
Short-Term Notes. In general, an individual or other cash method United States
Holder of a Short-Term Note is not required to accrue OID (as specially defined
below for the purposes of this paragraph) for United States federal income tax
purposes unless it elects to do so (but may be required to include any stated
interest in income as the interest is received). Accrual method United States
Holders and certain other United States Holders, including banks, regulated
investment companies, dealers in securities, common trust funds, United States
Holders who hold Notes as part of certain identified hedging transactions,
certain passthrough entities and cash method United States Holders who so
elect, are required to accrue OID on Short-Term Notes on either a straight-line
basis or under the constant-yield method (based on daily compounding), at the
election of the United States Holder. In the case of a United States Holder not
required and not electing to include OID in income currently, any gain realized
on the sale or retirement of the Short-Term Note will be ordinary income to the
extent of the OID accrued on a straight-line basis (unless an election is made
to accrue the OID under the constant-yield method) through the date of sale or
retirement. United States Holders who are not required and do not elect to
accrue OID on Short-Term Notes will be required to defer deductions for
interest on borrowings allocable to Short-Term Notes in an amount not exceeding
the deferred income until the deferred income is realized.
For purposes of determining the amount of OID subject to these rules, all
interest payments on a Short-Term Note, including stated interest, are included
in the Short-Term Note's stated redemption price at maturity.
Notes Purchased at a Premium. A United States Holder that purchases a Note for
an amount in excess of its principal amount may elect to treat such excess as
"amortizable bond premium," in which case the amount required to be included in
the United States Holder's income each year with respect to interest on the
Note will be reduced by the amount of amortizable bond premium allocable (based
on the Note's yield to maturity) to such year. Any election to amortize bond
premium shall apply to all bonds (other than bonds the interest on which is
excludable from gross income) held by the United States Holder at the beginning
of the first taxable year to which the election applies or thereafter acquired
by the United States Holder, and is irrevocable without the consent of the
Service. See also "Original Issue Discount--Election to Treat All Interest as
Original Issue Discount."
Purchase, Sale and Retirement of the Notes. A United States Holder's tax basis
in a Note will generally be its cost, increased by the amount of any OID or
market discount included in the United States Holder's income with respect to
the Note and the amount, if any, of income attributable to de minimis original
issue discount and de minimis market discount included in the United States
Holder's income with respect to the Note, and reduced by (a) the amounts of any
payments that are not qualified stated interest payments and (b) the amount of
any amortizable bond premium applied to reduce interest on the Note.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Note equal to the difference between the amount realized on the
sale or retirement and the tax basis of the Note. Except to the extent
described above under "Original Issue Discount--Short-Term Notes" or "Original
Issue Discount--Market Discount," gain or loss recognized on the sale or
retirement of a Note will be capital gain or loss and will be, in the case of
individuals, long-term capital gain or loss subject to a maximum tax rate of
20% (10% for taxpayers in the 15% regular tax bracket) if the Note was held for
more than twelve months. The short-term capital gains of an individual Holder
whose holding period for a Note is one year or less may be taxed at ordinary
income tax rates.
Indexed Notes. The applicable pricing supplement will contain a discussion of
any special United States federal income tax rules with respect to Notes that
are not subject to the rules governing Variable Rate Notes,
S-19
payments on which are determined by reference to any index, and other Notes
that are subject to the general rules governing contingent payment obligations.
Foreign Holders
This discussion assumes that the Note is not subject to the rules of Section
871(h)(4)(A) of the Code (relating to interest payments that are determined by
reference to the income, profits, changes in the value of property or other
attributes of the debtor or a related party).
Under present United States federal income and estate tax law, and subject to
the discussion of backup withholding below:
(1) payments of principal, premium (if any) and interest, including OID, by
Case Credit or any of its paying agents to any holder of a Note that is a
Foreign Holder will not be subject to United States federal withholding tax
if, in the case of interest or OID, (a) such Foreign Holder does not
actually or constructively own 10% or more of the total combined voting
power of all classes of stock of Case Credit entitled to vote, (b) such
Foreign Holder is not, for United States federal income tax purposes, a
controlled foreign corporation that is related to Case Credit through stock
ownership and (c) either (A) the beneficial owner of the Note certifies to
Case Credit or its agent, under penalties of perjury, that it is not a
United States Holder and provides its name and address or (B) a securities
clearing organization bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Note certifies to Case Credit or its
agent under penalties of perjury that such statement has been received from
the beneficial owner by it or by a financial institution between it and the
beneficial owner and furnished the payor with a copy thereof;
(2) a Foreign Holder of a Note will generally not be subject to United States
federal withholding tax on any gain realized on the sale or exchange of a
Note, unless (a) such gain is effectively connected with the conduct of a
U.S. trade or business or, in the case of a qualified resident of a country
having an applicable income tax treaty with the United States, attributable
to a U.S. permanent establishment or (b) subject to certain exceptions, the
Foreign Holder is an individual who holds the Note as a capital asset and
is present in the United States for 183 days or more in the taxable year of
the disposition; and
(3) a Note held by an individual who at death is not a citizen or resident of
the United States will not be includible in the individual's gross estate
for purposes of the United States federal estate tax as a result of the
individual's death if (a) the individual did not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of Case Credit entitled to vote and (b) the income on the Note would not
have been effectively connected with a United States trade or business of
the individual at the individual's death.
Recently issued Treasury regulations (the "New Withholding Regulations") with
respect to withholding and backup withholding generally will be effective with
respect to payments after December 31, 1999 regardless of the issue date of the
instrument with respect to which such payments are made, subject to certain
transition rules. The New Withholding Regulations generally will not affect the
certification rules described in clause (1)(c) above, but will provide
alternative methods for satisfying such requirements. The New Withholding
Regulations also will require, in the case of Notes held by a foreign
partnership, that (x) the certification described in clause (1)(c) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule will apply in the case of tiered
partnerships. Each Holder of Notes should consult such Holder's own tax advisor
regarding the tax consequences to such Holder of the New Withholding
Regulations.
Backup Withholding and Information Reporting
United States Holders
In general, information reporting requirements will apply to payments of
principal, any premium and interest on a Note and the proceeds of the sale of a
Note before maturity within the United States to, and to the accrual of OID on
a Discount Note with respect to, non-corporate United States Holders, and
"backup withholding" at
S-20
a rate of 31% will apply to such payments and to payments of OID if the United
States Holder fails to provide an accurate taxpayer identification number or is
notified by the Internal Revenue Service that it has failed to report all
interest and dividends required to be shown on its federal income tax returns.
Foreign Holders
Under current law, information reporting on Internal Revenue Service Form 1099
and backup withholding will not apply to payments of principal, premium (if
any) and interest (including OID) made by Case Credit or a paying agent to a
Foreign Holder on a Note; provided the certification described in clause (i)(c)
under "Foreign Holders" above is received and provided further that the payor
does not have actual knowledge that the holder is a United States person. Case
Credit or a paying agent, however, may report (on Internal Revenue Service Form
1042S) payments of interest (including OID) on Notes.
If payments on a Note are made to or through a foreign office of a custodian,
nominee, broker or other agent acting on behalf of a beneficial owner of a
Note, such custodian, nominee or other agent will not be required to apply
backup withholding or information reporting to such payments made to such
beneficial owner. If, however, such nominee, custodian, agent or broker is, for
United States federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a United States trade or business for
a specified three-year period, such payments will not be subject to backup
withholding but will be subject to information reporting, unless (1) such
custodian, nominee, agent or broker has documentary evidence in its records
that the beneficial owner is not a United States person and certain other
conditions are met or (2) the beneficial owner otherwise establishes an
exemption. Under the New Withholding Regulations, backup withholding will not
apply to such payments absent actual knowledge that the payee is a United
States person.
Payments of the proceeds from the sale by a Foreign Holder of a Note made to or
through a foreign office of a broker will not be subject to information
reporting or backup withholding, except that if the broker is a United States
person, a controlled foreign corporation for United States tax purposes or a
foreign person 50% or more of whose gross income is effectively connected with
a United States trade or business for a specified three-year period,
information reporting will apply to such payments, unless the broker has in its
records documentary evidence that the beneficial owner is not a United States
person and certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payments of the proceeds from the sale of a Note to
or through the United States office of a broker is subject to information
reporting and backup withholding unless the holder or beneficial owner
certifies under penalties of perjury that it is not a United States Holder or
otherwise establishes an exemption from information reporting and backup
withholding provided that the broker does not have actual knowledge that the
holder is a United States Holder or that the conditions of any other exemption
are not, in fact, satisfied. The recently issued New Withholding Regulations
substantially revise the procedures that withholding agents and payees must
follow to comply with, or establish an exemption from, these information
reporting and backup withholding provisions for payments of income after
December 31, 1999. Each Holder of Notes should consult such Holder's own tax
advisor regarding the tax consequences to such Holder of the New Withholding
Regulations.
Amounts withheld under the backup withholding rules from a payment to a Holder
will be creditable against the Holder's U.S. Federal income tax liability,
provided that the requisite procedures are followed.
S-21
SUPPLEMENTAL PLAN OF DISTRIBUTION
Under the terms of the Distribution Agreement, dated April 21, 1999 (the
"Distribution Agreement"), Case Credit is offering the Notes on a continuous
basis through J.P. Morgan Securities Inc., Chase Securities Inc., Credit Suisse
First Boston Corporation, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, NationsBanc Montgomery Securities LLC and Salomon Smith
Barney Inc. (the "Agents"). The Agents have agreed to use their reasonable
efforts to solicit orders. Case Credit will pay an Agent a commission ranging
from .125% to .750% of the principal amount of each Note, depending upon its
maturity, sold through such Agent. The exact commission paid will be determined
by the Stated Maturity of the Notes sold. The following table describes the
potential proceeds Case Credit will receive, but does not include expenses
payable by Case Credit which are estimated to be $850,000.
Price to Agents' Commissions
Public and Discounts Proceeds to Case Credit
------------ ------------------- -------------------------
Per Note...... 100% .125% to .750% 99.875% to 99.250%
Total......... $550,000,000 $687,500-$4,125,000 $549,312,500-$545,875,000
Case Credit may sell Notes directly to investors (other than broker-dealers) in
those jurisdictions in which Case Credit is permitted to do so. If Case Credit
sells Notes directly to investors, no commission or discount will be paid. Case
Credit may also sell Notes through other agents as may be named in the
applicable pricing supplement on substantially the same terms and conditions as
sales through an Agent. Case Credit may also sell Notes to any Agent as
principal for the Agent's account at a price agreed upon at the time of sale.
Such Notes may be resold by the Agent to investors at a fixed public offering
price or at prevailing market prices, or at a related price, as determined by
the Agent. Unless otherwise specified in the applicable pricing supplement, any
Note sold to an Agent as principal will be purchased at a price equal to 100%
of the principal amount minus a discount equal to the commission that would be
paid on an agency sale of a Note of identical maturity.
The Agents may sell Notes purchased from Case Credit as principal to other
dealers for resale to investors and other purchasers and may provide any
portion of the discount received in connection with their purchase from Case
Credit to such dealers. After the initial public offering of the Notes, the
public offering price and other selling terms may be changed.
The Notes will not have an established trading market when issued. Also, the
Notes will not be listed on any securities exchange. The Agents may make a
market in the Notes, as permitted by applicable laws and regulations, but are
not obligated to do so and may discontinue any market-making at any time
without notice. There can be no assurance of a secondary market for any Notes,
or that any purchaser of Notes will be able to sell Notes in the future.
Each purchaser of a Note will arrange for payment as instructed by the
applicable Agent. The Agents are required to deliver the proceeds of the Notes
to Case Credit in immediately available funds, to a bank designated by Case
Credit in accordance with the terms of the Distribution Agreement, on the date
of settlement.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933. Case Credit has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act of 1933, or
to contribute to payments that they may be required to make in connection with
such indemnification. Case Credit has agreed to reimburse the Agents for
certain expenses, including the reasonable fees and disbursements of counsel
for the Agents.
Case Credit reserves the right to withdraw, cancel or modify the offer made
hereby without notice. Case Credit will have the sole right to accept offers to
purchase Notes and may reject any proposed purchase of Notes as a whole or in
part. The Agents will have the right, in their discretion reasonably exercised,
to reject any offer to purchase Notes, as a whole or in part.
In connection with the purchase of Notes by one or more Agents, as principal,
for resale at a fixed price, the Agents may engage in transactions that
stabilize, maintain or otherwise affect the price of the Notes. Such
transactions may consist of bids or purchases of Notes for the purpose of
pegging, fixing or maintaining the price of the Notes. Specifically, the Agents
may overallot in connection with such offering, creating a syndicate
S-22
short position. In addition, the Agents may bid for and purchase the Notes in
the open market to cover syndicate short positions or to stabilize, maintain or
otherwise affect the price of the Notes. Finally, the syndicate may reclaim
selling concessions allowed for distributing of Notes in the offering, if the
syndicate repurchases previously distributed Notes in the market to cover
overallotments or to stabilize the price of the Notes. Any of these activities
may stabilize or maintain the market price of the Notes above independent
market level. The Agents are not required to engage in any of these activities,
and may end any of them at any time.
Concurrently with the offering of the Notes through the Agents, Case Credit may
issue other Securities as described under "Description of Securities" in the
prospectus.
In the ordinary course of their respective businesses, the Agents and their
affiliates have engaged and may in the future engage in investment banking
and/or commercial banking transactions with Case Credit and its affiliates.
Each of J.P. Morgan Securities Inc., Chase Securities Inc., Credit Suisse First
Boston Corporation, NationsBanc Montgomery Securities LLC and Salomon Smith
Barney Inc. or their affiliates are lenders under Case Credit's revolving
credit facility and, to the extent the proceeds hereof are used to repay
borrowings under the revolving credit facility, may receive a portion of such
proceeds. See "Use of Proceeds."
It is possible that 10% or more of the net proceeds of an offering of Notes
covered by a pricing supplement will be applied to repayment of a loan or loans
made to Case Credit by Morgan Guaranty Trust Company of New York, an affiliate
of J.P. Morgan Securities Inc., The Chase Manhattan Bank, an affiliate of Chase
Securities Inc., Credit Suisse First Boston Corporation, NationsBank, N.A., an
affiliate of NationsBanc Montgomery Securities LLC, and/or Citibank N.A., an
affiliate of Salomon Smith Barney Inc. Under the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD"), special considerations
apply to a public offering of securities where more than 10% of the net
proceeds will be paid to a participating underwriter or any of its affiliates.
Therefore, any such offering will be conducted pursuant to Rule 2710(c)(8) of
the NASD Conduct Rules.
S-23
PROSPECTUS
Case Credit Corporation
233 Lake Avenue
Racine, Wisconsin 53403
(414) 636-6011
$550,000,000
Debt Securities
---------------------
Case Credit will provide specific terms of these securities in supplements to
this prospectus. You should read this prospectus and any prospectus supplement
carefully before you invest.
---------------------
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 March 23, 1999.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. The Company has not
authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. Case Credit is not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus or any prospectus supplement, as
well as information the Company has previously filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference, is accurate as
of the date on the front of those documents only. Case Credit's business,
financial condition, results of operations and prospects may have changed since
such dates.
WHERE YOU CAN FIND MORE INFORMATION
Case Credit files reports and other information with the SEC. Case Credit's
SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document Case Credit files
at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 to obtain information on the
operation of the public reference room.
The Company has filed a registration statement on Form S-3 (the "Registration
Statement") relating to the debt securities with the SEC under the Securities
Act of 1933 (the "Securities Act"). For further information on Case Credit
Corporation and the debt securities, you should refer to the Registration
Statement and its exhibits. This prospectus and any related prospectus
supplement summarizes material provisions of contracts and other documents that
the Company refers you to. Since the prospectus and any related prospectus
supplement may not contain all the information that you may find important, you
should review the full text of these documents. The Company has included copies
of these documents as exhibits to the Registration Statement or incorporated
them by reference into this prospectus.
INCORPORATION OF INFORMATION CASE CREDIT FILES WITH THE SEC
Case Credit is "incorporating by reference" certain information it files with
the SEC into this prospectus, which means:
. incorporated documents are considered part of this prospectus;
. the Company can disclose important information to you by referring you to
those documents; and
. information that the Company files with the SEC will automatically update
and supersede this prospectus.
The Company incorporates by reference the documents listed below, which the
Company filed with the SEC under the Securities Exchange Act of 1934 (the
"Exchange Act"):
. Annual Report on Form 10-K for the year ended December 31, 1998; and
. Current Report on Form 8-K, event date January 26, 1999.
The Company also incorporates by reference each of the following documents
that the Company will file with the SEC after the date of this prospectus but
before the end of the offering of the debt securities:
. Reports filed under Sections 13(a) and (c) of the Exchange Act;
. Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting; and
. Any reports filed under Section 15(d) of the Exchange Act.
2
You may request a copy of any filings referred to above, at no cost, by
writing or telephoning the Company at the following address:
Case Credit Corporation
Attention: Kevin J. Hallagan, Vice President and Secretary
700 State Street
Racine, Wisconsin 53404
Telephone: (414) 636-6011
FORWARD-LOOKING STATEMENTS
The Company has made forward-looking statements in this prospectus, the
accompanying prospectus supplement and in the documents incorporated by
reference in this prospectus. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Forward-looking statements are statements
(other than statements of historical facts) that address activities, events or
developments that the Company expects or anticipates will or may occur in the
future, including such items as business strategy and measures to implement
strategy, competitive strengths, goals, expansion and growth of the Company's
business and operations, plans and references to future success. Forward-
looking statements also include any other statements that include words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend" and other
similar expressions.
Forward-looking statements are based on certain assumptions and analyses the
Company has made in light of its experience and its perception of historical
trends, current conditions, expected future developments and other factors the
Company believes are appropriate. Whether actual results and developments will
conform with the Company's expectations and predictions is subject to a number
of risks and uncertainties, including, among others, the following:
. general economic, market or business conditions;
. conditions in and policies of the agricultural, construction, housing and
credit industries;
. risks associated with investments and operations in foreign jurisdictions
and any future international expansion, including those related to
economic, political and regulatory policies of local governments and laws
or policies of the United States and other countries;
. changes in governmental laws and regulations affecting lending,
borrowing, taxes and other matters impacting the Company; and
. the potential impacts of increased competition in the markets in which
the Company operates.
All of the forward-looking statements made in this prospectus and the
accompanying prospectus supplement are qualified by these cautionary
statements, and there can be no assurance that the actual results or
developments the Company has anticipated will be realized. Even if the results
and developments in the Company's forward-looking statements are substantially
realized, there is no assurance that they will have the expected consequences
to or effects on the Company or the Company's business or operations.
Further information concerning factors that could significantly impact
expected results is included in (a) the following sections of the Company's
Form 10-K Annual Report for the year ended December 31, 1998, as filed with the
SEC: Business, Legal Proceedings and Management's Analysis of Results of
Operations and (b) documents the Company files with the SEC under the Exchange
Act that are incorporated by reference in this prospectus.
3
THE COMPANY
Case Credit(R) Corporation ("Case Credit" or the "Company") is a subsidiary
of Case Capital Corporation ("Case Capital"). Case Capital is a subsidiary of
Case Corporation ("Case"). Case Capital was recently created to provide broad-
based financial services for the global marketplace. Case Credit and its
operating subsidiaries and joint ventures provide and administer financing for
the retail purchase or lease of new and used Case and other agricultural and
construction equipment. Case Credit offers various types of retail financing to
end-use customers to facilitate the sale or lease of Case products in the
United States, Canada, Australia, Europe and Uzbekistan. The Company's business
principally involves purchasing retail installment sales contracts from Case
dealers. In addition, the Company facilitates and finances the sale of
insurance products to retail customers, provides financing for Case dealers and
Case rental equipment yards, and also provides other retail financing programs
in North America. In North America, Case Credit's private-label credit card is
used by customers to purchase parts, service, rentals, implements and
attachments from Case dealers. Case Credit also provides financing options to
dealers for a variety of purposes, including inventory, working capital, real
estate acquisitions, construction and remodeling, business acquisitions, dealer
systems and service and maintenance equipment.
The Company's business is dependent on the ability of Case and its dealers to
generate sales and leasing activity, the willingness of customers to enter into
financing transactions with the Company and the availability of funds to the
Company to finance such transactions. The ability of Case and its dealers to
sell agricultural and construction equipment and thereby generate retail
receivables is affected by numerous factors, including:
. the general level of activity in the agricultural and construction
industries;
. the rate of North American agricultural production and demand;
. weather conditions;
. commodity prices;
. consumer confidence;
. government subsidies for the agricultural sector;
. prevailing levels of construction (especially housing starts); and
. levels of total industry capacity and equipment inventory.
In addition, the Company's business is affected by changes in market interest
rates, which in turn are related to general economic and capital market
conditions, demand for credit, inflation, governmental policies and other
factors.
The Company obtains funding for its operations from a variety of sources
including the issuance of commercial paper, medium-term notes and public debt;
the issuance of securities in asset-backed securitization ("ABS") transactions;
bank revolving credit facilities; earnings retained in the business; and
advances and equity capital from Case. The Company sells substantial amounts of
retail receivables in ABS transactions that typically involve the sale of a
pool of retail installment sales contracts to limited-purpose business trusts
or similar securitization entities. The Company remains as servicer of these
receivables, for which it is typically paid a servicing fee.
The Company continues to expand its financing business by providing retail
and dealer financing in new geographic regions and for a broader range of
equipment, and by offering new financing products to Case dealers, end-use
customers and to others. The Company recently formed Soris Financial
("Soris(TM)") as a brand name to serve its diversified client base in the
agricultural, construction, industrial mobile and other equipment industries.
Soris offers a broad range of retail and wholesale financing products including
equipment and commercial loans and leases for North American manufacturers,
dealers, distributors and their customers. Soris also facilitates and finances
the sale of insurance products to retail customers.
4
CASE CORPORATION
Case is a leading worldwide designer, manufacturer, marketer and distributor
of farm equipment and light- to medium-sized construction equipment, and offers
a broad array of financial products and services through Case Capital, Case's
financial services business. Case's market position is particularly significant
in several product categories including loader/backhoes, skid steer loaders,
large, high-horsepower farm tractors and self-propelled combines.
RELATIONSHIP WITH CASE CORPORATION
Case provides the Company with certain operational and financial support that
is integral to the conduct of the Company's business. Presented below is a
description of the support agreement between the Company and Case. Other
operational and financial support provided to the Company by Case is described
in reports filed by the Company with the SEC pursuant to the Exchange Act.
The Company and Case have entered into a support agreement (the "Support
Agreement") which provides, among other things, that Case:
(1) will remain, directly or indirectly, the sole owner of all of the
voting stock of the Company; and
(2) will make quarterly payments to the Company to the extent necessary
to ensure that the Company's consolidated pre-tax earnings (as defined in
the Support Agreement) available for fixed charges equal at least 1.10
times its fixed charges (as defined in the Support Agreement) in all
periods composed of four consecutive fiscal quarters.
The Support Agreement provides that Case is not directly or indirectly
guaranteeing any indebtedness, liability or obligation of the Company. The
Support Agreement may be modified or amended by the parties thereto or
terminated by either party upon 30 days' prior written notice to the other
party, with copies of any such amendment or notice being sent to Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Group ("S&P")
and any other nationally recognized statistical rating organizations then
rating Case Credit debt, provided that at least one of the following conditions
is met:
(a) Moody's and S&P confirm in writing that their ratings on Case Credit
debt would not be downgraded or withdrawn as a result of such modification,
amendment or termination; or
(b) the modification, amendment or notice of termination provides that
the Support Agreement will continue in effect with respect to debt of Case
Credit outstanding on the effective date of the modification, amendment or
termination; or
(c) the holders of at least a majority of the aggregate unpaid principal
amount of all outstanding debt of Case Credit with an original maturity in
excess of 270 days consent in writing, so long as the holders of debt of
Case Credit having an original maturity of 270 days or less shall continue
to have the benefit of the Support Agreement until the maturity of such
debt.
For purposes of the Support Agreement, no portion of any debt is considered to
be "outstanding" if such debt is deemed to be discharged and not outstanding in
accordance with the indenture or other governing instrument defining the rights
of the holders of such debt.
The calculation of pre-tax earnings available for fixed charges under the
Support Agreement differs from the calculation of the ratio of earnings to
fixed charges under SEC rules. Under the Support Agreement, all cash
extraordinary non-recurring items of income or expense (other than cash debt
defeasance costs) are included. Under SEC rules, these items are excluded.
5
USE OF PROCEEDS
Except as otherwise set forth in the prospectus supplement relating to a
specific issuance of debt securities, the net proceeds to be received by the
Company from the sale of the debt securities will be used to fund the Company's
finance programs (including, without limitation, retail finance programs
offered by Case Credit to end-use customers and dealer rental equipment finance
programs offered by Case Credit) and for other corporate purposes, including
the repayment of indebtedness. Pending such use, the net proceeds may be
temporarily invested in short-term instruments.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for Case Credit is set forth below for
the periods indicated.
Year Ended December 31
----------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
1.90x 2.23x 2.80x 4.34x 2.57x
For the computation of the ratio of earnings to fixed charges, "earnings" has
been calculated by adding income (loss) before taxes, cumulative effect of
changes in accounting principles and extraordinary loss, interest expense,
fixed charges of unconsolidated subsidiaries, the portion of rentals
representative of an interest factor and amortization of capitalized debt
expense. Fixed charges consist of interest expense, fixed charges of
unconsolidated subsidiaries, the portion of rentals representative of an
interest factor and amortization of capitalized debt expense.
The calculation of pre-tax earnings available for fixed charges under the
Support Agreement differs from the calculation of the ratio of earnings to
fixed charges under SEC rules as set forth above. Under the Support Agreement,
all cash extraordinary non-recurring items of income or expense (other than
cash debt defeasance costs) are included. Under SEC rules, these items are
excluded.
DESCRIPTION OF SECURITIES
The Securities will be issued under an Indenture (the "Indenture"), between
the Company and The Bank of New York, as Trustee (the "Trustee"), dated as of
October 1, 1997, a copy of which is incorporated by reference into the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Indenture,
including the definitions therein of certain terms. Wherever particular
sections or defined terms of the Indenture are referred to, such sections or
defined terms are incorporated herein by reference. As used in this section or
in any description of the Indenture, references to "Case Credit" or "the
Company" refer to Case Credit Corporation and not its subsidiaries.
The following sets forth certain general terms and provisions of the
Securities. The particular terms of the Securities offered by any prospectus
supplement (the "Offered Securities") will be described in the prospectus
supplement relating to such Offered Securities (the "Applicable Prospectus
Supplement").
General
The Indenture does not limit the amount of securities that may be issued
thereunder. Securities may be issued under the Indenture from time to time in
one or more series. The Securities will be unsecured obligations of the
Company. They will rank equally and ratably with Case Credit's other unsecured
obligations.
6
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal, premium, if any, and interest on the Securities will be payable, and
the transfer of Securities will be registrable, at the office or agency to be
maintained by the Company in New York, New York, and at any other office or
agency maintained by the Company for such purpose. The Securities will be
issued only in fully registered form without coupons and, unless otherwise
indicated in the Applicable Prospectus Supplement, in denominations of $1,000
and integral multiples thereof. No service charge will be made for any
registration of transfer or exchange of the Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith.
The Applicable Prospectus Supplement will describe the following terms of the
Offered Securities:
(1) the title of the Offered Securities;
(2) any limit on the aggregate principal amount of the Offered Securities;
(3) the person to whom any interest on the Offered Securities will be
payable, if other than the person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of the Offered Securities is
payable;
(5) the rate or rates (which may be fixed or variable) at which the Offered
Securities will bear interest, if any, or the method by which such rate or
rates will be determined, the date or dates from which any such interest will
accrue, the Interest Payment Dates on which any such interest will be payable
and the Regular Record Date for the interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and interest
on the Offered Securities will be payable;
(7) the period or periods within which, the price or prices at which and the
terms and conditions upon which the Offered Securities may be redeemed, in
whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem, purchase or repay the
Offered Securities pursuant to any sinking fund or analogous provisions or at
the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which the Offered
Securities will be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation;
(9) if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which the Offered Securities shall be issuable;
(10) the currency, currencies or currency units in which payment of the
principal of and any premium and interest on any Offered Securities will be
payable if other than the currency of the United States of America;
(11) if the amount of payments of principal of or any premium or interest on
any Offered Securities may be determined with reference to an index or formula,
the manner in which such amounts will be determined;
(12) if the principal of or any premium or interest on any Offered Securities
is to be payable, at the election of the Company or a Holder thereof, in one or
more currencies or currency units other than that or those in which the Offered
Securities are stated to be payable, the currency, currencies or currency units
in which payment of the principal of and any premium and interest on the
Offered Securities as to which such election is made will be payable, and the
periods within which and the terms and conditions upon which such election is
to be made;
7
(13) the applicability, if any, of the provisions described under "Defeasance
and Covenant Defeasance;"
(14) whether the Offered Securities will be issuable, in whole or in part, in
the form of one or more Book-Entry Securities as described under "--Book-Entry
Securities," and, in such case, the depository appointed by the Company with
respect to the Offered Securities and the circumstances under which the Book-
Entry Security may be registered for transfer or exchange or authenticated and
delivered in the name of a person other than the Depository or its nominee;
(15) if other than the principal amount thereof, the portion of the principal
amount of the Offered Securities which will be payable upon declaration of
acceleration of the Maturity thereof; and
(16) any other terms of the Offered Securities.
The Securities may be issued as Original Issue Discount Securities to be
offered and sold at a substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations applicable to
Original Issue Discount Securities and any Securities treated as having been
issued with original issue discount for Federal income tax purposes will be
described in the Applicable Prospectus Supplement. "Original Issue Discount
Securities" means any Security which provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof.
The Indenture does not contain covenants or other provisions designed to
afford holders of the Securities protection in the event of a highly leveraged
transaction, change in credit rating or other similar occurrence. See
"Relationship With Case Corporation" concerning Case's obligation to retain
ownership of all of the voting stock of the Company and Case's obligation to
make support payments to the Company under certain circumstances.
Book-Entry Securities
Unless otherwise provided in the Applicable Prospectus Supplement, the
Securities will be represented by one or more certificates (the "Global
Securities"). The Global Security representing Securities will be deposited
with, or on behalf of, The Depository Trust Company ("DTC"), or other successor
depository appointed by the Company (DTC or such other depository being the
"Depository") and registered in the name of the Depository or its nominee.
Unless otherwise provided in the Applicable Prospectus Supplement, Securities
will not be issued in definitive form. If the aggregate principal amount of any
issue exceeds $200 million, one certificate will be issued with respect to each
$200 million of principal amount and an additional certificate will be issued
with respect to any remaining principal amount of such issue.
DTC 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. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to DTC's book-entry system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the SEC.
8
Upon the issuance by the Company of Securities represented by a Global
Security, purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Securities
represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in Securities
represented by the Global Security will not be entitled to have Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Securities in definitive form
and will not be considered the owners or holders thereof under the Indenture.
To facilitate subsequent transfers, all Securities deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of Securities with DTC and their registration in the name of Cede &
Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Securities.
Under its usual procedures, DTC mails an Omnibus Proxy to the Company as soon
as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Payments of principal, of premium, if any, and interest on the Securities
represented by the Global Security registered in the name of DTC or its nominee
will be made by the Company through the Trustee under the Indenture or a paying
agent (the "Paying Agent"), which may also be the Trustee under the Indenture,
to DTC or its nominee, as the case may be, as the registered owner of the
Global Security. Neither the Company, the Trustee, nor the Paying Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal, premium, if any, and interest in respect of a Global Security, will
credit Direct Participants' accounts on the payable date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payment on the payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Paying Agent or the
Company, subject to any statutory or regulatory requirements as may be
9
in effect from time to time. Payment of principal, premium, if any, and
interest to DTC is the responsibility of the Company or the Paying Agent,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not appointed
by the Company within 90 days, the Company will issue certificated notes in
exchange for the Securities represented by such Global Security.
The Company has been informed by DTC that its management is aware that some
computer applications, systems, and the like for processing data ("Systems")
that are dependent upon calendar dates, including dates before, on, and after
January 1, 2000, may encounter "Year 2000 problems." The Company has also been
informed by DTC that its has informed its Participants and other members of the
financial community (the "Industry") that it has developed and is implementing
a program so that its Systems, as the same relate to the timely payments of
distributions (including principal and income payments) to securityholders,
book-entry deliveries, and settlement of trades within DTC ("DTC Services"),
continue to function appropriately. According to DTC, this program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC has informed the Company that its plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, the Company has been informed by DTC that its ability to perform
properly its services is also dependent upon other parties, including but not
limited to issuers and their agents, as well as third party vendors from whom
DTC licenses software and hardware, and third party vendors on whom DTC relies
for information or the provisions of services, including telecommunications and
electrical utility service providers, among others. DTC has informed the
Company that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (a) impress upon them the
importance of such services being Year 2000 compliant; and (b) determine the
extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, DTC has informed the Company that it
is in the process of developing such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Certain Covenants of the Company
Limitations on Secured Funded Debt. The Indenture provides that the Company
will not, nor will it permit any Restricted Subsidiary to, incur, issue,
assume, guarantee or create any Secured Funded Debt, without effectively
providing that the Outstanding Securities (as defined below) (together with, if
the Company shall so determine, any other Indebtedness of the Company or such
Restricted Subsidiary then existing or thereafter created which is not
subordinated to the Outstanding Securities) will be secured equally and ratably
with (or prior to) such Secured Funded Debt.
This limitation is not applicable if, after giving effect to such Secured
Funded Debt, the sum of the aggregate amount of all outstanding Secured Funded
Debt of the Company and Restricted Subsidiaries would not exceed an amount
equal to the sum of (i) $20 million and (ii) 15% of Consolidated Net Tangible
Assets.
Furthermore, this limitation on Secured Funded Debt does not apply to, and
there will be excluded from Secured Funded Debt in any computation under such
restriction, Funded Debt secured by:
10
(1) Liens on real or physical property of any corporation existing at the
time such corporation becomes a Subsidiary;
(2) Liens on real or physical property existing at the time of acquisition
thereof or incurred within 180 days of the time of acquisition thereof
(including, without limitation, acquisition through merger or consolidation) by
the Company or any Restricted Subsidiary;
(3) Liens on real or physical property acquired (or constructed) after the
date of the Indenture by the Company or any Restricted Subsidiary and created
prior to, at the time of, or within 270 days after such acquisition (including,
without limitation, acquisition through merger or consolidation) (or the
completion of such construction or commencement of commercial operation of such
property, whichever is later) to secure or provide for the payment of all or
any part of the purchase price (or the construction price) thereof;
(4) Liens in favor of the Company or any Restricted Subsidiary;
(5) Liens in favor of the United States of America, any State thereof or the
District of Columbia, or any agency, department or other instrumentality
thereof, to secure partial, progress, advance or other payments pursuant to any
contract or provisions of any statute;
(6) Liens incurred or assumed in connection with an issuance of revenue bonds
the interest on which is exempt from Federal income taxation pursuant to
Section 103(b) of the Internal Revenue Code of 1986, as amended;
(7) Liens securing the performance of any contract or undertaking not
directly or indirectly in connection with the borrowing of money, the obtaining
of advances or credit or the securing of Funded Debt, if made and continuing in
the ordinary course of business;
(8) Liens incurred (no matter when created) in connection with the Company's
or a Restricted Subsidiary's engaging in leveraged or single-investor lease
transactions; provided, however, that the instrument creating or evidencing any
borrowings secured by such Lien will provide that such borrowings are payable
solely out of the income and proceeds of the property subject to such Lien and
are not a general obligation of the Company or such Restricted Subsidiary;
(9) Liens under workers' compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts or deposits to secure public or statutory obligations of the Company
or any Restricted Subsidiary, or deposits of cash or obligations of the United
States of America to secure surety, replevin and appeal bonds to which the
Company or any Restricted Subsidiary is a party or in lieu of such bonds, or
pledges or deposits for similar purposes in the ordinary course of business, or
Liens imposed by law, such as laborers' or other employees', carriers',
warehousemen's, mechanics', materialmen's and vendors' Liens and Liens arising
out of judgments or awards against the Company or any Restricted Subsidiary
with respect to which the Company or such Restricted Subsidiary at the time
shall be prosecuting an appeal or proceedings for review and with respect to
which it shall have secured a stay of execution pending such appeal or
proceedings for review, or Liens for taxes not yet subject to penalties for
nonpayment or the amount or validity of which is being in good faith contested
by appropriate proceedings by the Company or any Restricted Subsidiary, as the
case may be, or minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights-of-way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions or Liens as to the use of real properties, which Liens,
exceptions, encumbrances, easements, reservations, rights and restrictions do
not, in the opinion of the Company, in the aggregate materially detract from
the value of said properties or materially impair their use in the operation of
the business of the Company and its Restricted Subsidiaries;
(10) Liens incurred to finance all or any portion of the cost of
construction, alteration or repair of any real or physical property and
improvements thereto prior to or within 270 days after completion of such
construction, alteration or repair;
(11) Liens incurred (no matter when created) in connection with a
Securitization Transaction;
11
(12) Liens on property (or any Receivable arising in connection with the
lease thereof) acquired by the Company or a Restricted Subsidiary through
repossession, foreclosure or like proceeding and existing at the time of the
repossession, foreclosure, or like proceeding;
(13) Liens on deposits of the Company or a Restricted Subsidiary with banks
(in the aggregate, not exceeding $50 million), in accordance with customary
banking practice, in connection with the providing by the Company or a
Restricted Subsidiary of financial accommodations to any Person in the ordinary
course of business;
(14) Liens outstanding on the date of the Indenture; or
(15) any extension, renewal, refunding or replacement of the foregoing.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company and
Restricted Subsidiaries as at the end of the fiscal quarter of the Company
ending not more than 135 days prior to such date, prepared in accordance with
generally accepted accounting principles, less (a) all current liabilities (due
within one year) as shown on such balance sheet, (b) applicable reserves, (c)
investments in and advances to Securitization Subsidiaries and Subsidiaries of
Securitization Subsidiaries that are consolidated on the consolidated balance
sheet of the Company and its Subsidiaries, and (d) Intangible Assets and
liabilities relating thereto.
"Funded Debt" means (a) any indebtedness of the Company or a Restricted
Subsidiary maturing more than 12 months after the time of computation thereof,
(b) guarantees by the Company or a Restricted Subsidiary of Funded Debt or of
dividends of others (except guarantees in connection with the sale or discount
of accounts receivable, trade acceptances and other paper arising in the
ordinary course of business), (c) in the case of any Restricted Subsidiary all
preferred stock of such Restricted Subsidiary, and (d) all Capital Lease
Obligations (as defined in the Indenture) of the Company or a Restricted
Subsidiary.
"Indebtedness" means, at any date, without duplication, (a) all obligations
for borrowed money of the Company or a Restricted Subsidiary or any other
indebtedness of the Company or a Restricted Subsidiary, evidenced by bonds,
debentures, notes or other similar instruments, and (b) Funded Debt, except
such obligations and other indebtedness of the Company or a Restricted
Subsidiary of the Company and Funded Debt, if any, incurred as a part of a
Securitization Transaction.
"Intangible Assets" means, at any date, the value (net of any applicable
reserves) as shown on or reflected in the most recent consolidated balance
sheet of the Company and the Restricted Subsidiaries as at the end of the
fiscal quarter of the Company ending not more than 135 days prior to such date,
prepared in accordance with generally accepted accounting principles, of: (a)
all trade names, trademarks, licenses, patents, copyrights, service marks,
goodwill and other like intangibles; (b) organizational and development costs;
(c) deferred charges (other than prepaid items, such as insurance, taxes,
interest, commissions, rents, deferred interest waiver, compensation and
similar items and tangible assets being amortized); and (d) unamortized debt
discount and expense, less unamortized premium.
"Liens" means pledges, mortgages, security interests and other liens,
including purchase money liens, on any property of the Company or any
Restricted Subsidiary which secure Secured Funded Debt.
"Outstanding Securities" means all Securities previously authenticated and
delivered under the Indenture other than (a) Securities that have been
canceled, (b) Securities for whose payment or redemption money in the necessary
amount has been deposited with the Trustee or any Paying Agent and (c)
Securities that have been defeased pursuant to section 13.2 of the Indenture.
In determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver, Securities owned by the Company are
deemed not to be outstanding and special rules under the Indenture are
applicable to Original Issue Discount Securities and Securities not denominated
in U.S. Dollars.
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"Receivables" means any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general intangible
or otherwise, arising, either directly or indirectly, from the financing by the
Company or any Subsidiary of the Company of property or services, and monies
due thereunder, security interests in the property and services financed
thereby and any and all other related rights.
"Restricted Subsidiary" means each Subsidiary of the Company other than
Securitization Subsidiaries and Subsidiaries of Securitization Subsidiaries.
"Secured Funded Debt" means Funded Debt of the Company which is secured by
any pledge, or mortgage, security interest or other lien on any property
(whether owned on the date of the Indenture or thereafter created) of the
Company or of a Restricted Subsidiary.
"Securities" means any indebtedness of the Company issued under the
Indenture.
"Securitization Subsidiary" means a Subsidiary of the Company (a) which is
formed for the purpose of effecting one or more Securitization Transactions and
engaging in other activities reasonably related thereto and (b) as to which no
portion of the indebtedness or any other obligations of which (1) is guaranteed
by the Company or any Restricted Subsidiary, or (2) subjects any property or
assets of the Company or any Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to any lien, other than pursuant to representations,
warranties and covenants (including those related to servicing) entered into in
the ordinary course of business in connection with a Securitization Transaction
and inter-company notes and other forms of capital or credit support relating
to the transfer or sale of Receivables or asset-backed securities to such
Securitization Subsidiary and customarily necessary or desirable in connection
with such transactions.
"Securitization Transaction" means any transaction or series of transactions
that have been or may be entered into by the Company or any of its Subsidiaries
in connection with or reasonably related to a transaction or series of
transactions in which the Company or any of its Subsidiaries may sell, convey
or otherwise transfer to (a) a Securitization Subsidiary or (b) any other
Person, or may grant a security interest in, any Receivables or asset-backed
securities or interest therein (whether such Receivables or securities are then
existing or arising in the future) of the Company or any of its Subsidiaries,
and any assets related thereto, including, without limitation, all security
interests in the property or services financed thereby, the proceeds of such
Receivables or asset-backed securities and any other assets which are sold or
in respect of which security interests are granted in connection with
securitization transactions involving such assets.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board
of directors of such corporation (or similar management body), is owned
directly or indirectly by the Company or by one or more Subsidiaries of the
Company, or by the Company and one or more Subsidiaries.
Events of Default
Any one of the following events will constitute an Event of Default under the
Indenture with respect to Securities of any series:
(1) failure to pay any interest on any Security of that series when due,
continued for 30 days;
(2) failure to pay principal of or any premium on any Security of that series
when due;
(3) failure to deposit any sinking fund or other payment, when due, in
respect of any Security of that series;
(4) failure to perform, or breach of, any other covenant or warranty of the
Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Securities thereunder other than that
series) continued for 60 days after written notice as provided in the
Indenture;
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(5) certain events in bankruptcy, insolvency or reorganization of the
Company;
(6) a default or defaults under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness (including the Indenture), whether such Indebtedness exists at the
date of the Indenture or shall thereafter be created, which default or defaults
shall have resulted in such Indebtedness, in an aggregate principal amount
exceeding $60 million, individually or in the aggregate, having been declared
due and payable prior to the date on which it would otherwise have become due
and payable, without such Indebtedness having been discharged, or such
acceleration having been rescinded or annulled, or there having been deposited
in trust a sum of money sufficient to discharge in full such Indebtedness,
within a period of 30 days after there shall have been given, by registered
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holder or Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of such series a written notice specifying such default
and requiring the Company to cause such Indebtedness to be discharged, cause to
be deposited in trust a sum sufficient to discharge in full such Indebtedness
or cause such acceleration to be rescinded or annulled; or
(7) any other Event of Default provided with respect to Securities of that
series.
If any Event of Default with respect to the Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Securities of that
series to be due and payable immediately. At any time after a declaration of
acceleration with respect to Securities of any series has been made, but before
a judgment or decree based on acceleration has been obtained, the Holders of a
majority in aggregate principal amount of Outstanding Securities of that series
may, under certain circumstances, rescind and annul such acceleration.
You should review the Applicable Prospectus Supplement relating to any series
of Offered Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Stated Maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee and to certain other conditions, the Holders of
a majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Securities of that
series.
No Holder of any series of Securities will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
(a) such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default, (b) the Holders of at least 25% in principal
amount of the Outstanding Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and (c) the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a Holder of a Security for
enforcement of payment of the principal of and premium, if any, or interest on
such Security on or after the respective due dates expressed in such Security.
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
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Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than the majority in
aggregate principal amount of the Outstanding Securities of each series issued
under the Indenture and affected by the modification or amendment. No such
modification or amendment may, without the consent of the Holders of all
Securities affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security;
(2) reduce the principal amount of, or the premium, if any, or (except as
otherwise provided in the Applicable Prospectus Supplement) interest on, any
Security (including, in the case of an Original Issue Discount Security, the
amount payable upon acceleration of the maturity thereof);
(3) change the place or currency of payment of principal of, premium, if any,
or interest on any Security;
(4) impair the right to institute suit for the enforcement of any payment on
any Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); or
(5) reduce the percentage in principal amount of Outstanding Securities of
any series, the consent of whose Holders is required for modification or
amendment of the Indenture or for waiver of compliance with certain provisions
of the Indenture or for waiver of certain defaults.
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company with certain restrictive provisions of
the Indenture. The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series may, on behalf of all
Holders of that series, waive any past default under the Indenture, except a
default in the payment of principal, premium or interest and in respect of a
covenant or provision of the Indenture that cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected thereby.
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person and may not permit any Person to merge into or
consolidate with the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) any successor or purchaser is a corporation, partnership, or trust
organized and validly existing under the laws of the United States of America,
any State or the District of Columbia, and any such successor or purchaser
expressly assumes the Company's obligations on the Securities under a
supplemental indenture;
(2) immediately after giving effect to the transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing;
(3) if properties or assets of the Company become subject to a mortgage,
pledge, lien, security interest or other encumbrance not permitted by the
Indenture, the Company or such successor Person, as the case may be, takes such
steps as shall be necessary effectively to secure the Securities equally and
ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel stating compliance with these provisions.
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Defeasance and Covenant Defeasance
The Indenture provides that, if such provision is made applicable to the
Securities of any series pursuant to Section 3.1 of the Indenture, the Company,
at the Company's option:
(1) will be discharged from any and all obligations in respect of the
Securities of any series (except for certain obligations to register the
transfer of or exchange of Securities of such series, replace stolen, lost or
mutilated Securities of such series, maintain paying agencies and hold moneys
for payment in trust); or
(2) need not comply with certain restrictive covenants of the Indenture,
including those described under "Certain Covenants of the Company," and the
occurrence of an event described in clause (4) under "Events of Default" shall
no longer be an Event of Default,
in each case, if the Company deposits, in trust, with the Trustee money or U.S.
Government Obligations, which through the payment of interest thereon and
principal thereof in accordance with their terms, will provide money in an
amount sufficient to pay all the principal of, premium if any, and interest on
the Securities of such series on the dates such payments are due (which may
include one or more redemption dates designated by the Company) in accordance
with the terms of the Securities of such series. Such a trust may be
established only if, among other things:
(a) no Event of Default or event which, with the giving of notice or
lapse of time, or both, would become an Event of Default under the
Indenture shall have occurred and be continuing on the date of such deposit
or on such later date specified in the Indenture in the case of certain
events in bankruptcy, insolvency or reorganization of the Company;
(b) such deposit will not cause the Trustee to have any conflicting
interest with respect to other securities of the Company;
(c) such defeasance will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound; and
(d) the Company shall have delivered an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit or defeasance and will be subject
to Federal income tax in the same manner as if such defeasance had not
occurred, which Opinion of Counsel, in the case of clause (1) above, must
refer to and be based upon a published ruling of the Internal Revenue
Service, a private ruling of the Internal Revenue Service addressed to the
Company, or otherwise a change in applicable federal income tax law
occurring after the date of the Indenture.
In the event the Company omits to comply with its remaining obligations under
the Indenture after a defeasance of the Indenture with respect to the
Securities of any series as described under clause (2) above and the Securities
of such series are declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee may be insufficient to pay amounts due on the
Securities of such series at the time of the acceleration resulting from such
Event of Default. However, the Company will remain liable in respect of such
payments.
Concerning the Trustee
The Bank of New York is Trustee under the Indenture. The Trustee performs
services for the Company and Case in the ordinary course of business and is a
lender bank under certain of the Company's credit facilities and Case's credit
facilities. The Company has issued $150,000,000 aggregate principal amount of
its 6 3/4% Notes due October 21, 2007, $100,000,000 aggregate principal amount
of its 6 1/8% Notes due October 15, 2001, $100,000,000 aggregate principal
amount of its Floating Rate Notes due January 21, 2000 and a total of
$279,200,000 of its Series A medium-term notes and a total of $759,000,000 of
its Series B medium-term
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notes under the Indenture. The Trustee is also trustee under an indenture,
dated as of February 1, 1996, between the Company, Case and the Trustee, as
trustee. The Company has issued $200,000,000 aggregate principal amount of its
6 1/8% Notes due February 15, 2003, under such indenture.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby through agents,
through underwriters and through dealers, and Securities may be sold to other
purchasers directly or through agents or through a combination of any such
methods of sale.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
underwriter, as that term is defined in the Securities Act, involved in the
offer or sale of the Securities in respect of which this prospectus is
delivered will be named, and any commissions payable by the Company to such
agent set forth, in the Applicable Prospectus Supplement. Agents may be
entitled under agreements that may be entered into with the Company to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. In addition, such agents or their
affiliates may be customers of, extend credit to, engage in transactions with,
or perform services for, the Company and/or Case in the ordinary course of
business. Unless otherwise indicated in the Applicable Prospectus Supplement,
any such agent will be acting on a reasonable efforts basis for the period of
its appointment.
If any underwriters are utilized in the sale, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set
forth in the Applicable Prospectus Supplement that will be used by the
underwriters to make resales of the Securities in respect of which this
prospectus is delivered to the public. The underwriters may be entitled under
the relevant underwriting agreement to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act. In
addition, such underwriters or their affiliates may be customers of, extend
credit to, engage in transactions with, or perform services for, the Company
and/or Case in the ordinary course of business.
If dealers are utilized in the sale of the Securities in respect of which
this prospectus is delivered, the Company will sell such Securities to such
dealers as principal. The dealers may then resell such Securities to the public
at varying prices to be determined by such dealers at the time of resale.
Dealers may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act. In addition, such
dealers or their affiliates may be customers of, extend credit to, engage in
transactions with, or perform services for, the Company and/or Case in the
ordinary course of business.
Unless otherwise indicated in the Applicable Prospectus Supplement,
Securities are not proposed to be listed on a securities exchange, and any
underwriters or dealers will not be obligated to make a market in Securities.
The Company cannot predict the activity or liquidity of any trading in the
Securities.
If so indicated in an Applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Offered Securities from the Company pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such prospectus supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Offered Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in such prospectus supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and
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charitable institutions and other institutions, but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (a) the purchase by an institution of the Offered Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject, and (b) if the Offered Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Offered Securities less the principal amount thereof covered by Contracts.
Agents and underwriters will have no responsibility in respect of the delivery
or performance of Contracts.
LEGAL MATTERS
Unless otherwise indicated in a supplement to this prospectus, certain legal
matters in connection with the Securities offered by this prospectus will be
passed upon for the Company by Richard S. Brennan, General Counsel and
Secretary of Case, and by Mayer, Brown & Platt, Chicago, Illinois. In addition
to his positions at Case, Mr. Brennan is also a partner at Mayer, Brown &
Platt. The Company has been advised by Mr. Brennan that, at December 31, 1998,
he beneficially owned 34,000 shares of common stock of Case and had options to
purchase 10,000 shares of common stock of Case. Unless otherwise indicated in a
supplement to this prospectus, certain legal matters in connection with the
Securities offered by this prospectus will be passed upon for the underwriters,
dealers and agents, if any, by Cahill Gordon & Reindel (a partnership including
a professional corporation), New York, New York.
EXPERTS
Unless otherwise indicated in a supplement to this prospectus, the audited
financial statements and schedules included or incorporated by reference in
this prospectus and the prospectus supplement and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference herein in reliance upon the authority of
said firm as experts in giving said reports.
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