PROSPECTUS SUPPLEMENT
(To prospectus dated July 25, 2002)
(New Brunswick Logo)
U.S.$500,000,000
PROVINCE OF NEW BRUNSWICK
(CANADA)
3.50% NOTES DUE OCTOBER 23, 2007
The notes bear interest at the rate of 3.50% per year. Interest on the
notes is payable on April 23 and October 23 of each year, beginning April 23,
2003. Interest on the notes will accrue from October 23, 2002. The notes will
mature on October 23, 2007. The notes are not redeemable before maturity, unless
certain events occur involving Canadian taxation.
The notes are offered for sale in Canada, the United States and those
jurisdictions in Europe and Asia where it is legal to make such offers.
Application has been made to list the notes on the Luxembourg Stock
Exchange in accordance with its rules.
<Table>
<Caption>
PER NOTE TOTAL
-------- ----------------
Public offering price (1)................................... 99.429% U.S.$497,145,000
Underwriting discount....................................... 0.250% U.S.$ 1,250,000
Proceeds, before expenses, to the Province.................. 99.179% U.S.$495,895,000
</Table>
- ---------------
(1) Plus accrued interest from October 23, 2002 if settlement occurs after that
date.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying basic prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
We expect that the notes will be ready for delivery in book-entry form only
through The Depository Trust Company, Clearstream, Luxembourg or the Euroclear
System, on or about October 23, 2002.
<Table>
CIBC WORLD MARKETS SALOMON SMITH BARNEY
CREDIT SUISSE FIRST BOSTON
MERRILL LYNCH & CO. NBC INTERNATIONAL (USA) INC. RBC CAPITAL MARKETS
BANK OF MONTREAL BNP PARIBAS
CASGRAIN & CO. SCOTIA CAPITAL
</Table>
The date of this prospectus supplement is October 16, 2002.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<Table>
<Caption>
PAGE
----
Summary of the Offering..................................... S-4
Province of New Brunswick................................... S-5
Recent Developments......................................... S-6
Use of Proceeds............................................. S-6
Description of The Notes.................................... S-6
Clearing and Settlement..................................... S-11
Tax Matters................................................. S-13
Underwriting................................................ S-16
Legal Opinions.............................................. S-17
Authorized Agents in the United States...................... S-17
General Information......................................... S-17
BASIC PROSPECTUS
About This Prospectus....................................... 2
Province of New Brunswick................................... 2
Application of Proceeds..................................... 2
Description of Debt Securities.............................. 2
Plan of Distribution........................................ 4
Authorized Representatives.................................. 4
Sources of Information...................................... 5
Legal Opinions.............................................. 5
Where You Can Find More Information......................... 5
</Table>
------------------------
You should rely only on the information contained in this prospectus
supplement and in the basic prospectus dated July 25, 2002 of the Province of
New Brunswick. In this prospectus supplement the words "the Province", "we",
"our", "ours", and "us" refer to the Province of New Brunswick. The basic
prospectus contains or incorporates by reference information regarding the
Province and other matters, including a description of certain terms of the
Provinces securities. We have not, and the underwriters have 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. We are
not, and underwriters are 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 supplement and the accompanying
basic prospectus, as well as the information we previously filed with the United
States Securities and Exchange Commission or the "SEC" and incorporated by
reference, is accurate in all material respects only as of its date.
------------------------
This document is in two parts. The first part is in the prospectus
supplement, which describes the specific terms of the notes we are offering and
certain other matters relating to the Province. The second part, the basic
prospectus, gives more general information about securities we may offer from
time to time, some of which does not apply to the notes we are offering. To the
extent the description of the notes in the prospectus supplement differs from
the description of the debt securities in the basic prospectus, the description
in the prospectus supplement supercedes the description in the basic prospectus.
------------------------
We have filed a registration statement with the SEC covering the notes. For
further information on the Province and the notes, you should refer to our
registration statement and its exhibits. This prospectus supplement and the
accompanying basic prospectus summarize material provisions of the agreements
and other documents that we refer you to. Since the prospectus supplement and
the accompanying basic prospectus may not contain all the information that you
may find important, you should review the full text of these documents and the
documents incorporated by reference in the basic prospectus.
S-2
We file reports and other information with the SEC in the United States.
You may read and copy any document we file at the SEC's public reference room in
Washington, D.C. Please call the SEC at 1-800-SEC-0330 for more information on
the public reference room and copy charges.
------------------------
The Luxembourg Stock Exchange takes no responsibility for the contents of
this prospectus supplement and the accompanying basic prospectus, makes no
representations as to their accuracy or completeness and expressly disclaims any
liability whatsoever for any loss arising from or in reliance upon the whole or
any part of the contents of this prospectus supplement and the accompanying
basic prospectus.
------------------------
This prospectus supplement and the accompanying basic prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to the Province and the notes. We accept full
responsibility for the accuracy of the information contained in this prospectus
supplement and the accompanying basic prospectus and confirm, having made all
reasonable inquiries, that to the best of our knowledge and belief there are no
other facts the omission of which would make any statement herein or in the
basic prospectus misleading in any material respect.
------------------------
In connection with this issue, Salomon Smith Barney Inc. or any person
acting on its behalf may over-allot or effect transactions with a view to
supporting the market price of the bonds at a level higher than that which might
otherwise prevail for a limited period after the issue date. However, there may
be no obligation on Salomon Smith Barney Inc. or any of its agents to do this.
Such stabilizing, if commenced may be discontinued at any time, and must be
brought to an end after a limited period.
------------------------
Unless otherwise specified or the context otherwise requires, references in
this prospectus supplement to "$" and "Cdn.$" are to lawful money of Canada and
"U.S.$" and "U.S. dollars" are to lawful money of the United States of America.
The inverse of the noon buying rate in New York, New York on October 16, 2002
for cable transfers in Canadian dollars as certified for customs purposes by the
Federal Reserve Bank of New York was $1.00 = U.S.$0.6313.
S-3
SUMMARY OF THE OFFERING
This summary may not contain all the information that may be important to
you. You should read the entire prospectus supplement and the accompanying basic
prospectus before making an investment decision.
ISSUER.................... The Province of New Brunswick.
AGGREGATE PRINCIPAL
AMOUNT.................... U.S.$500,000,000.
INTEREST RATE............. 3.50% per year.
MATURITY DATE............. October 23, 2007.
INTEREST PAYMENT DATES.... April 23 and October 23 of each year, beginning April
23, 2003. Interest on the notes will accrue from
October 23, 2002.
RANKING................... The notes will be unsecured direct obligations of the
Province and will rank equally with all of our other
unsecured obligations.
REDEMPTION................ The notes are not redeemable prior to maturity,
unless certain events occur involving Canadian
taxation.
MARKETS................... The notes are offered for sale in the United States
and elsewhere where it is legal to make such offers.
LISTING................... Application has been made to list the notes on the
Luxembourg Stock Exchange in accordance with its
rules.
FORM AND DENOMINATION..... One fully registered global note held in the name of
a nominee of The Depository Trust Company ("DTC").
You may elect to hold a beneficial interest in the
global note through DTC, Clearstream, Luxembourg or
the Euroclear System.
Except in limited circumstances, you will not be
entitled to have notes registered in your name and
will not receive or be entitled to receive notes in
definitive form. Except in limited circumstances, you
will not be considered a registered holder of the
notes.
Notes will be sold in minimum denominations of
U.S.$1,000 and integral multiples of U.S. $1,000.
WITHHOLDING TAX........... Principal of and interest on the notes are payable by
the Province without withholding or deduction for
Canadian withholding taxes to the extent set forth
herein.
The Province may be contacted at the Department of Finance, Treasury
Division, 670 King Street, Room 376, Fredericton, New Brunswick E3B 5H1, Canada,
Attention: Assistant Deputy Minister, Treasury Division and may be telephoned at
(506) 453-2515.
S-4
PROVINCE OF NEW BRUNSWICK
The province of New Brunswick is located on the eastern seaboard of Canada
and has a total area of 28,355 square miles of which about 12,877 square miles
is Crown land owned by the Province. The province borders the State of Maine to
the south and the provinces of Nova Scotia and Quebec to the east and west
respectively. According to Statistics Canada, the population of the province on
July 1, 2001 was estimated at 757,077.
ECONOMIC OVERVIEW
New Brunswick's economy is open and is becoming increasingly diversified.
It receives a significant contribution from natural resources including mining,
fishing and agriculture, with the largest concentration in forestry and
forestry-related industries. The provincial economy shows a larger concentration
of service industries than goods producing industries compared to Canada as a
whole. Service industries include transportation and communication as well as
technology and tourism. The province's economy grew at an annual real rate of
4.6% in 1999 and 1.8% in 2000, with growth for 2001 reduced to 0.6% due to the
completion of major investment projects in petroleum refinement, natural gas and
transportation infrastructure and also due to the general North American
Economic slowdown.
Foreign exports of commodities have become increasingly important to New
Brunswick. In 2001, about 89% of exports were destined for the US market. Energy
products, followed by forest and food products constitute the bulk of exports.
Other important commodity exports are fertilizers, plastic products, electronic
parts and components, and metallic ores. Exports of agricultural and fishing
products have reported strong increases in recent years to diverse markets such
as the US, Japan and Europe.
In 2001, New Brunswick's inflation rate was 1.7%, significantly lower than
the national rate of 2.6%. Wages and salaries rose 4.2% comparable to the
national increase in 2001.
The labor force participation rate reached a record level for the fifth
consecutive year in 2001. This strong growth combined with stable employment
resulted in a higher unemployment rate for the province of 11.2% in 2001
compared to 10.0% the previous year.
2000-2001 FISCAL YEAR RESULTS
Financial results for the fiscal year ending March 31, 2001 were released
by the Minister of Finance in October 2001. The statements of financial
position, revenue and expenditure, cash flow and net debt form the basis of the
Province's Form 18-K submission to the Securities and Exchange Commission dated
December 17, 2001.
The Province borrows from non-public sources including the Canada Pension
Plan (CPP), a compulsory national pension plan in which all provinces but Quebec
participate. At March 31, 2001, New Brunswick had outstanding borrowings from
the CPP Investment Fund of $835.2 million. At March 31, 2001, New Brunswick had
no other non-public borrowing.
At March 31, 2001, the Province had outstanding borrowings for Provincial
purposes totaling $6,821.0 million through the issue and sale of debentures and
notes, such securities being denominated in Canadian dollars, U.S. dollars,
Japanese yen and Swiss francs. Not included in this amount is $3,061.1 million
borrowed on behalf of New Brunswick Power Corporation, the Province's Crown
utility.
The Province is required by legislation to pay annually into a sinking fund
the Canadian currency equivalent of not less than 1% of all funded debt. The
Province's current policy is to pay 1.5% of funded debt annually into the
sinking fund. At March 31, 2001 the value of the sinking fund applicable to debt
issued for Provincial purposes amounted to $3,130.2 million. For the fiscal year
ended March 31, 2001, earnings on sinking fund investments amounted to $220.0
million.
2001-2002 RESULTS AND FISCAL OUTLOOK 2002-2003
On March 26, 2002, the New Brunswick Minister of Finance tabled the 2002-03
Budget, which included revised estimates for the 2001-2002 fiscal year and
budget forecasts for the 2002-2003 fiscal year. Copies of the budget documents
were filed with the Securities and Exchange Commission as amendments to
Province's Form 18-K.
Audited statements for the 2001-2002 fiscal year were released October 4,
2002 and subsequently filed with the Securities and Exchange Commission as
amendments to the Province's Form 18-K.
S-5
RECENT DEVELOPMENTS
On May 30, 2002, the Province announced that NB Power, the Province's Crown
utility, will be restructured into a holding company called NB Power Holding,
with four subsidiary companies: NB Power Generation, NB Power Nuclear, NB Power
Transmission, and NB Power Distribution and Customer Service.
Also, the government announced that it is seeking private sector equity
financial participation or third party investment in each of the two major
generation refurbishment and refit projects being undertaken by NB Power.
On August 20, 2002, NB Power released its 2001-2002 annual report, which
was subsequently filed as an amendment to the Province of New Brunswick's Form
18-K.
USE OF PROCEEDS
The Province expects that the net proceeds of approximately U.S.
$495,727,200 from the sale of the notes will be paid to the Minister of Finance
for the Province and paid into the Consolidated Fund for use in the public
service, for discharging any indebtedness or obligation of the Province, for
reimbursing the Consolidated Fund for any monies expended in discharging any
such indebtedness or obligation, for carrying on of public works authorized by
the Province and for the purchase of securities to be issued by New Brunswick
Power Corporation.
DESCRIPTION OF THE NOTES
GENERAL
The 3.50% Notes Due October 23, 2007, in the aggregate principal amount of
U.S. $500,000,000 will be issued subject to a fiscal agency agreement dated as
of October 23, 2002 between the Province and Royal Bank of Canada, as registrar,
fiscal agent, transfer agent and principal paying agent.
The terms and conditions of the notes are summarized below and are subject
to the detailed provisions of the fiscal agency agreement and the exhibits
thereto, including the form of the global note, a copy of which will be filed as
an exhibit to an amendment to the Province's annual report on Form 18-K and will
be available for inspection at the office of the Luxembourg listing, transfer
and paying agent. The notes and the fiscal agency agreement together constitute
a contract, all of the terms and conditions of which each registered holder by
acceptance of the notes assents to and is deemed to have notice of.
The fiscal agent will act as the agent of the Province and hence will not
be a trustee for the holders of the notes and will not have the same
responsibilities or duties to act for holders as would a trustee.
References to principal and interest in respect of the notes shall be
deemed also to refer to any additional amounts which may be payable as described
below. See "-- Payment of Additional Amounts".
STATUS OF THE NOTES
The notes will be unsecured direct obligations of the Province. The notes
will rank equally and ratably with all other securities constituting general
unsecured obligations of the Province outstanding from time to time.
FORM, DENOMINATION AND REGISTRATION
The notes will be issued in the form of a fully registered global note
registered in the name of Cede & Co., as nominee of DTC, and held by DTC.
Beneficial interests in the global note will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in DTC. Investors may elect to hold interests
in the global note directly through any of DTC (in the United States) or
Clearstream Banking, societe anonyme ("Clearstream, Luxembourg") or Euroclear
Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") (in Europe) if
they are participants of such systems, or indirectly through organizations which
are participants in such systems. Clearstream, Luxembourg and Euroclear will
hold interests on behalf of their participants through customers' securities
accounts in Clearstream, Luxembourg's and Euroclear's names on the books of
their respective depositaries, which in turn hold such interests in customers'
securities accounts in the names of the depositaries on the books of DTC. Except
in the limited circumstances described herein, owners of beneficial interests in
the global note will not be entitled to have notes registered in their names,
will not receive or be entitled to receive notes in definitive form and will not
be considered registered holders of notes under the fiscal agency agreement. See
"-- Title" and "-- Definitive Certificates".
S-6
The notes will only be sold in a minimum aggregate principal amount of
U.S.$1,000 and integral multiples thereof.
All notes will be recorded in a register maintained by the fiscal agent
under the fiscal agency agreement, and will be registered in the name of Cede &
Co., for the benefit of owners of beneficial interests in the global note,
including those owners which are participants of Clearstream, Luxembourg and
Euroclear.
The fiscal agent will not impose any service charge on the registered
holder in respect of the notes, other than reasonable fees for the replacement
of lost, stolen, mutilated, defaced or destroyed notes; however, the Province
may require of the party requesting such transfer or exchange, as a condition
precedent to the exercise of any right of transfer or exchange contained in the
fiscal agency agreement or in the notes, the payment of a sum sufficient to
cover any stamp or other tax or other governmental charge payable in connection
therewith. In addition, owners of beneficial interests in the global note may
incur fees payable in respect of the maintenance and operation of the book-entry
accounts in which such interests are held with the clearing systems.
TITLE
Subject to applicable law and the terms of the fiscal agency agreement, the
Province, the fiscal agent and any paying agent appointed in accordance with the
fiscal agency agreement shall deem and treat the registered holders of the notes
as the absolute owners thereof for all purposes whatsoever whether or not the
notes are overdue and neither the Province nor the fiscal agent will be affected
by any notice to the contrary; and all payments to or on the order of the
registered holders are valid and effectual to discharge the liability of the
Province and the fiscal agent on the notes to the extent of the sum or sums
paid.
INTEREST
The notes will bear interest from October 23, 2002 at a rate of 3.50% per
annum. Interest for the period from, and including, October 23, 2002 to, but
excluding, April 23, 2003 will be payable on April 23, 2003. Thereafter,
interest on the notes will be payable in two equal semi-annual installments in
arrears on April 23 and October 23 of each year. Interest will be payable to the
persons in whose names the notes are registered at the close of business on the
April 8 or October 8 (each a "record date"), as the case may be, preceding the
applicable interest payment date. If the notes become redeemable prior to
maturity in accordance with the terms and conditions of the notes, any interest
payable under the notes on the redemption date will be payable to the persons in
whose names the notes are registered on the redemption date. Interest on the
notes will cease to accrue on the redemption date unless payment of principal is
improperly withheld or refused. Any overdue principal or interest on the notes
shall bear interest at the rate of 3.50% per annum (before and, subject to
applicable law, after judgment) until paid, or if earlier, when the full amount
of the monies payable has been made available by the Province and notice to that
effect has been given in accordance with "-- Notices" below.
Whenever it is necessary to compute any amount of accrued interest in
respect of the notes for a period of less than one full year, other than with
respect to regular semi-annual interest payments, such interest shall be
calculated on the basis of a 360-day year of twelve 30-day months. The annual
rate of interest to which such rate is equivalent, for purposes of the Interest
Act (Canada), is the rate so calculated multiplied by a fraction, the numerator
of which is the actual number of days in the calendar year in respect of which
such calculation is made, and the denominator of which is the number of days
used in the calculation.
PAYMENTS
Principal of and interest on the notes are payable by the Province in U.S.
dollars to the persons in whose names the notes are registered on the applicable
record date, redemption date or maturity date, as the case may be. The fiscal
agent will act as the Province's principal paying agent for the notes pursuant
to the fiscal agency agreement and Dexia Banque Internationale a Luxembourg
societe anonyme will act as the Province's paying agent in Luxembourg. Ownership
positions within each clearing system will be determined in accordance with the
normal conventions observed by such system.
None of the Province, the fiscal agent or any transfer agent or paying
agent will have any responsibility or liability for any aspect of the records of
DTC, Clearstream, Luxembourg or Euroclear relating to or payments made by such
clearing systems on account of beneficial interests in the global note or for
maintaining, supervising or reviewing any records of such clearing systems
relating to such beneficial interests.
S-7
If any date for payment in respect of any note is not a business day, the
registered holder thereof shall not be entitled to payment until the next
following business day, and no further interest shall be paid in respect of the
delay in such payment. In this paragraph "business day" means a day on which
banking institutions in Fredericton, New Brunswick, Toronto, Ontario and New
York, New York, are not authorized or obligated by law or regulation to close.
If notes have been issued in definitive form and a date for payment is a
business day but is a day on which any paying agent is closed at the applicable
place of payment, a registered holder will not be entitled to payment at such
location until the next succeeding day on which banking institutions in such
place of payment are not authorized or obligated by law or regulation to be
closed and no further interest shall be paid in respect of the delay in such
payment.
FURTHER ISSUES
The Province may from time to time, without notice to or the consent of the
registered holders of the notes, create and issue further notes ranking equally
and ratably with the notes in all respects (or in all respects except for the
payment of interest accruing prior to the issue date of such further notes or
except for the first payment of interest following the issue date of such
further notes) and so that such further notes shall be consolidated and form a
single series with the notes and shall have the same terms as to status,
redemption or otherwise as the notes. However no further notes shall be
consolidated in a single series with the notes unless the further notes are
fungible with the notes for United States federal income tax purposes. Any
further notes shall be issued subject to an agreement supplemental to the fiscal
agency agreement.
PAYMENT OF ADDITIONAL AMOUNTS
All payments of, or in respect of, the principal of and interest on the
notes will be made without withholding of or deduction for, or on account of,
any present or future taxes, duties, assessments or charges of whatsoever nature
imposed or levied by or on behalf of the Government of Canada, or any province
or political subdivision thereof, or any authority thereof or agency therein
having power to tax, unless such taxes, duties, assessments or charges are
required by law or by the administration or interpretation thereof to be
withheld or deducted. In that event, the Province (subject to its right of
redemption described under "-- Maturity, Redemption and Purchase") will pay to
the registered holders of the notes such additional amounts (the "Additional
Amounts") as will result (after withholding or deduction of the said taxes,
duties, assessments or charges) in the payment to the beneficial owners of notes
of the amounts which would otherwise have been payable in respect of the notes
in the absence of such taxes, duties, assessments or charges, except that no
such Additional Amounts shall be payable with respect to any note:
(a) to or on behalf of a beneficial owner who is subject to such taxes,
duties, assessments or charges in respect of such note by reason of
such owner being connected with Canada otherwise than merely by the
holding or ownership as a non-resident of Canada of such note; or
(b) if the note is presented for payment more than 15 days after the
Relevant Date, except to the extent that the holder thereof would
have been entitled to such Additional Amounts on the last day of such
period of 15 days. For this purpose, the "Relevant Date" in relation
to any note means whichever is the later of:
(i) the date on which the payment in respect of such note first becomes
due; or
(ii) if the full amount of the moneys payable on such date in respect of
such note has not been made available by the Province on or prior to
such date, the date on which notice is duly given to the registered
holders of such note that such moneys have been so made available.
The Province shall not be obliged to pay any additional amounts in respect
of any tax, assessment or other governmental charge required to be withheld on a
payment to an individual pursuant to any European Union Directive on taxation of
savings implementing the conclusions of the ECOFIN (European Union's Economic
and Finance Ministers) Council meeting of 26-27 November 2000, the proposal
presented by the Commission of the European Communities on July 18, 2001 for a
Council Directive to ensure effective taxation of savings income in the form of
interest payments within the European Union, or any law implementing or
complying with, or introduced in order to conform to, such Directive or
proposal.
MATURITY, REDEMPTION AND PURCHASES
The principal amount of the notes, at par, shall be due and payable on
October 23, 2007 upon presentation and surrender of the notes. The notes are not
redeemable at the option of the Province prior to maturity unless certain events
S-8
occur involving Canadian taxation as provided below and are not repayable at the
option of the registered holder prior to maturity.
The notes may be redeemed at the option of the Province in whole, but not
in part, at any time, on giving not less than 30 days' and not more than 60
days' notice to registered holders of the notes in accordance with "Notices"
below (which notice shall be irrevocable), at 100% of the principal amount
thereof, together with interest accrued thereon to the date fixed for
redemption, if (a) the Province has or will become obliged to pay additional
amounts as provided or referred to in "-- Payment of Additional Amounts" above
as a result of any change in, or amendment to, the laws or regulations of
Canada, or any province or political subdivision thereof, or any authority
thereof or agency therein having power to tax, or any treaty affecting taxation
to which Canada is a party, or any change in the application or official
interpretation of such laws, regulations or treaties, which change or amendment
becomes effective on or after the date of this prospectus supplement, and (b)
such obligation cannot be avoided by the Province taking reasonable measures
available to it, provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Province would be
obliged to pay such additional amounts were a payment in respect of the notes
then due. Prior to the publication of any notice of redemption pursuant to this
paragraph, the Province shall deliver to the fiscal agent a certificate signed
by an officer of the Province stating that the Province is entitled to effect
such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Province so to redeem have occurred.
The Province may, if not in default under the notes, at any time purchase
notes in the open market, or by tender or by private contract, at any price, in
accordance with applicable law and, if definitive notes have been issued in
accordance with the fiscal agency agreement, may cause the fiscal agent to
cancel any notes so purchased.
REPAYMENT IN EVENT OF DEFAULT
If (a) there is a non-payment of the principal of or interest on any of the
notes and such non-payment continues for a period of more than 30 days after
written notice of such non-payment is given to the Province by a registered
holder of notes or (b) there is a failure in the performance of any other
covenant of the Province contained in the notes which continues for more than 60
days after written notice requiring such failure to be remedied is given to the
Province by a registered holder of notes, then the registered holder giving such
notice may give a further written notice to the Province demanding that the
principal amount of all or any of the notes held by such registered holder
become immediately repayable, together with accrued interest, and upon the
giving of such further notice, such notes shall become repayable accordingly.
Any notice from a registered holder of notes to the Province as
contemplated in the previous paragraph shall be given to the Province by
delivering such notice to the fiscal agent.
DEFINITIVE CERTIFICATES
No beneficial owner of notes will be entitled to receive notes in
definitive form except in the limited circumstances described below.
If DTC notifies the Province that it is unwilling or unable to continue as
depositary in connection with the global note or ceases to be a recognized
clearing agency and a successor depositary is not appointed by the Province
within 90 days after receiving such notice or becoming aware that DTC is no
longer so registered, the Province will issue or cause to be issued fully
registered notes in definitive form upon registration of transfer of, or in
exchange for, the global note. The Province may also at any time and in its sole
discretion determine not to have any of the notes held in the form of the global
note, and, in such event, will issue or cause to be issued fully registered
notes in definitive form upon registration of transfer of, or in exchange for,
such global note.
For so long as the notes are listed on the Luxembourg Stock Exchange and if
the rules of such stock exchange on which the notes are listed so require, the
Province has agreed to appoint and maintain a transfer agent and paying agent in
Luxembourg to act on its behalf. Fully registered notes in definitive form may
be presented at the office of the Luxembourg transfer agent, for registration of
transfer or exchange by the fiscal agent in accordance with the fiscal agency
agreement. Payments of interest on fully registered notes in definitive form
will be made by the fiscal agent in accordance with the fiscal agency agreement.
Fully registered notes in definitive form may be surrendered at the office of
the Luxembourg paying agent for payment of principal at maturity or on the date
fixed for redemption.
S-9
MODIFICATION
The fiscal agency agreement and the notes may be amended or supplemented by
the Province on the one hand, and the fiscal agent, on the other hand, without
notice to or the consent of the registered holder of any note, for the purpose
of curing any ambiguity, or curing, correcting or supplementing any defective
provisions contained therein, or effecting the issue of further notes as
described under "Further Issues" above, or in any other manner which the
Province may deem necessary or desirable and which, in the reasonable opinion of
the Province, on the one hand, and the fiscal agent, on the other hand, will not
adversely affect the interests of holders of notes.
The fiscal agency agreement will contain provisions for convening meetings
of registered holders of notes to approve by extraordinary resolution (as
defined below) any modification or amendment to the fiscal agency agreement
(except as provided in the immediately preceding paragraph) and the notes
(including the terms and conditions thereof). An extraordinary resolution duly
passed at any such meeting or duly adopted by means of an instrument in writing
shall be binding on all registered holders of notes, whether present or not;
provided, however, that no such modification or amendment to the fiscal agency
agreement or to the terms and conditions of the notes shall, without the consent
of the registered holder of each such note affected thereby: (a) change the
maturity date of any such note or change any interest payment date; (b) reduce
the principal amount of any such note or the rate of interest payable thereon;
(c) change the currency of payment of any such note; (d) impair the right to
institute suit for the enforcement of any payment on or with respect to such
note; or (e) reduce the percentage of the principal amount of notes necessary
for the taking of any action, including modification or amendment of the fiscal
agency agreement or the terms and conditions of the notes, or reduce the quorum
required at any meeting of registered holders of notes.
The term "extraordinary resolution" will be defined in the fiscal agency
agreement as a resolution passed at a meeting of registered holders of notes
held in accordance with the provisions of the fiscal agency agreement and the
notes by the affirmative vote of the registered holders of not less than 66 2/3%
of the principal amount of the then outstanding notes represented at the meeting
in person or by proxy and voting on the resolution or as an instrument in
writing signed in one or more counterparts by the registered holders of not less
than 66 2/3% of the principal amount of the then outstanding notes. The quorum
at any such meeting for passing an extraordinary resolution is one or more
registered holders of notes present in person or by proxy who represent at least
a majority in principal amount of the then outstanding notes, or at any
adjourned meeting called by the Province or the fiscal agent, one or more
persons being or representing registered holders of notes whatever the principal
amount of the notes so held or represented.
GOVERNING LAW
The notes and the fiscal agency agreement will be governed by, and
construed in accordance with, the laws of the Province of New Brunswick and the
laws of Canada applicable therein.
NOTICES
All notices will be published in English in London, England in the
Financial Times, in New York, U.S.A. in The Wall Street Journal, in Canada in
The Globe & Mail and, as long as the notes are listed on the Luxembourg Stock
Exchange, in Luxembourg in the Luxemburger Wort. If at any time publication in
any such newspaper is not practicable, notices will be valid if published in an
English language newspaper with general circulation in the respective market
regions as the Province, with the approval of the fiscal agent, shall determine.
Any such notice shall be deemed to have been given on the date of publication
or, if published more than once on different dates, on the first date on which
publication is made. Written notice will also be given to DTC, provided at the
time of such notice the notes are represented by the global note. If the notes
are being held in definitive form, notices will be validly given if sent by
first class prepaid post addressed to the registered holders at their respective
addresses appearing in the register and if, in the case of joint holders of any
note, more than one address appears in the register in respect of such joint
holding, such notice shall be addressed only to the first address so appearing.
Any notice so given shall be deemed to have been given on the day of it being
sent by post.
PRESCRIPTION
The notes will become void unless presented for payment within a period of
the lesser of six years, or the period prescribed by law, from the relevant date
(as defined under "-- Payment of Additional Amounts") for payment thereof.
S-10
CLEARING AND SETTLEMENT
The Province has obtained the information in this section from sources it
believes to be reliable, including from DTC, Euroclear and Clearstream,
Luxembourg, and the Province takes responsibility for the accurate reproduction
of this information. However, the Province takes no responsibility for the
accuracy of the information itself. DTC, Euroclear and Clearstream, Luxembourg
are under no obligation to perform or continue to perform the procedures
described below, and they may modify or discontinue them at any time. Neither
the Province nor the fiscal agent will be responsible for DTC's Euroclear's or
Clearstream, Luxembourg's performance of their obligations under their rules and
procedures. Nor will the Province or the fiscal agent be responsible for the
performance by direct or indirect participants of their obligations under their
rules and procedures
THE CLEARING SYSTEMS
DTC. 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 U.S. Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
deposit with DTC. DTC also facilitates the settlement among DTC participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in DTC participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct DTC participants include certain of the underwriters,
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 the DTC system is also available to indirect participants such as securities
brokers and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a direct DTC participant, either directly or
indirectly.
Transfers of ownership or other interests in notes in DTC may be made only
through direct DTC participants. Indirect DTC participants are required to
effect transfers through a direct DTC participant. In addition, beneficial
owners of notes in DTC will receive all distributions of principal of and
interest on the notes through such direct DTC participants to the extent
received by DTC.
Because DTC can only act on behalf of direct DTC participants, who in turn
act on behalf of indirect DTC participants, and because beneficial owners
holding through DTC will hold interests in the notes through direct DTC
participants or indirect DTC participants, the ability of such beneficial owners
to pledge notes to persons or entities that do not participate in DTC, or
otherwise take actions with respect to such notes, may be limited.
Conveyance of notices and other communications by DTC to direct DTC
participants, by direct DTC participants to indirect DTC participants, and by
direct and indirect DTC 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.
Clearstream, Luxembourg. Clearstream Banking, societe anonyme, 67 Bd
Grande-Duchesse Charlotte, L-2967 Luxembourg ("Clearstream, Luxembourg"), was
incorporated in 1970 as "Cedel S.A.", a company with limited liability under
Luxembourg law (a societe anonyme). Cedel S.A. subsequently changed its name to
Cedelbank. On January 10, 2000, Cedelbank's parent company, Cedel International,
societe anonyme ("CI") merged its clearing, settlement and custody business with
that of Deutsche Borse Clearing AG ("DBC"). The merger involved the transfer by
CI of substantially all of its assets and liabilities (including its shares in
Cedelbank) to a new Luxembourg company, New Cedel International, societe anonyme
("New CI"), which is 50% owned by CI and 50% owned by DBC's parent company
Deutsche Borse AG. The shareholders of these two entities are banks, securities
dealers and financial institutions. Cedel International currently has 89
shareholders, including U.S. financial institutions or their subsidiaries. No
single entity may own more than 5 percent. of Cedel International's stock.
Further to the merger, the Board of Directors of New Cedel International
decided to re-name the companies in the group in order to give them a cohesive
brand name. The new brand name that was chosen is "Clearstream". With effect
from January 14, 2000, New CI has been renamed "Clearstream International,
societe anonyme". On January 18, 2000, Cedelbank was renamed "Clearstream
Banking, societe anonyme", and Cedel Global Services was renamed "Clearstream
Services, societe anonyme".
S-11
On January 17, 2000, DBC was renamed "Clearstream Banking AG". This means
that there are now two entities in the corporate group headed by Clearstream
International which share the name "Clearstream Banking", the entity previously
named "Cedelbank" and the entity previously named "Deutsche Borse Clearing AG".
On February 1, 2002, Cedel International and Deutsche Borse AG announced
agreement on the terms of an offer by Deutsche Borse AG to acquire Cedel
International and its 50 percent ownership of Clearstream International. The
offer is subject to an affirmative vote by two-thirds of Cedel International
shareholders, regulatory approval and Deutsche Borse Supervisory Board approval.
Clearstream, Luxembourg holds securities for its customers and facilitates
the clearance and settlement of securities transactions between Clearstream,
Luxembourg customers through electronic book-entry changes in accounts of
Clearstream, Luxembourg customers, thereby eliminating the need for physical
movement of certificates. Transactions may be settled by Clearstream, Luxembourg
in any of 32 currencies, including U.S. dollars. Clearstream, Luxembourg
provides to its customers, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream, Luxembourg also deals with
domestic securities markets in over 39 countries through established depository
and custodial relationships. Clearstream, Luxembourg is registered as a bank in
Luxembourg, and as such is subject to regulation by the Commission de
Surveillance du Secteur Financier, "CSSF", which supervises Luxembourg banks.
Clearstream, Luxembourg's customers are world-wide financial institutions
including underwriters, securities brokers and dealers, banks, trust companies
and clearing corporations. Clearstream, Luxembourg's U.S. customers are limited
to securities brokers and dealers, and banks. Currently, Clearstream, Luxembourg
has approximately 2,000 customers located in over 80 countries, including all
major European countries, Canada, and the United States. Indirect access to
Clearstream, Luxembourg is available to other institutions that clear through or
maintain a custodial relationship with an account holder of Clearstream,
Luxembourg. Clearstream, Luxembourg has established an electronic bridge with
Euroclear Bank in Brussels to facilitate settlement of trades between
Clearstream, Luxembourg and Euroclear Bank.
Distributions of interest and principal with respect to notes held
beneficially through Clearstream, Luxembourg will be credited to cash accounts
of Clearstream, Luxembourg customers in accordance with its rules and
procedures, to the extent received by the U.S. depositary for Clearstream,
Luxembourg.
Euroclear. Euroclear was created in 1968 to hold securities for its
participants and to clear and settle transactions between Euroclear participants
through simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Euroclear provides
various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries. Euroclear is operated by
Euroclear Bank S.A./N.V. (the "Euroclear Operator"), under contract with
Euroclear Clearance Systems, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear participants. Euroclear participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the initial
purchasers. Indirect access to Euroclear is also available to others that clear
through or maintain a custodial relationship with a Euroclear participant,
either directly or indirectly.
The Euroclear Operator was granted a banking license by the Belgian Banking
and Finance Commission in 2000, authorizing it to carry out banking activities
on a global basis. It took over operation of Euroclear from the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York on December 31,
2000.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear participants, and has no record of or relationship with persons
holding through Euroclear participants.
Distributions of interest and principal with respect to notes held
beneficially through Euroclear will be credited to cash accounts of Euroclear
participants in accordance with its rules and procedures, to the extent received
by its depositary in the United States.
S-12
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the notes will be made in immediately available
funds.
Secondary market trading between DTC Participants will occur in the
ordinary way in accordance with DTC rules. Secondary market trading between
Clearstream, Luxembourg Participants and/or Euroclear Participants will occur in
the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream, Luxembourg and Euroclear and will be settled using
the procedures applicable to conventional eurobonds in immediately available
funds.
TRANSFERS BETWEEN DTC AND CLEARSTREAM, LUXEMBOURG OR EUROCLEAR
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream,
Luxembourg or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its U.S. depositary. However, such cross market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its rules
and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its U.S. depositary to take
action to effect final settlement on its behalf by delivering or receiving notes
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Clearstream, Luxembourg
Participants and Euroclear Participants may not deliver instructions directly to
the respective U.S. depositaries.
Because of time-zone differences, credits of notes received in Clearstream,
Luxembourg or Euroclear as a result of a transaction with a DTC Participant will
be made during subsequent securities settlement processing and will be dated the
business day following the DTC settlement date. Such credits or any transactions
in such notes settled during such processing will be reported to the relevant
Clearstream, Luxembourg or Euroclear Participants on such business day. Cash
received in Clearstream, Luxembourg or Euroclear as a result of sales of notes
by or through a Clearstream, Luxembourg Participant or a Euroclear Participant
to a DTC Participant will be received with value on the DTC settlement date but
will be generally available in the relevant Clearstream, Luxembourg or Euroclear
cash account only as of the business day following settlement in DTC.
Although DTC, Euroclear and Clearstream Luxembourg have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of DTC, Euroclear and Clearstream, Luxembourg, they are under no
obligation to perform or continue to perform such procedures which may be
changed or discontinued at any time.
TAX MATTERS
THE FOLLOWING SUMMARY OF CANADIAN AND UNITED STATES TAX MATTERS IS GENERAL
IN NATURE ONLY AND DOES NOT CONSTITUTE TAX ADVICE TO ANY PROSPECTIVE INVESTOR IN
THE NOTES. PERSONS WHO CONSIDER INVESTING IN THE NOTES, WHETHER THEY ARE
CITIZENS OR RESIDENTS OF ANY ONE OR MORE OF CANADA, THE UNITED STATES OR ANOTHER
COUNTRY, ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR
INDIVIDUAL TAX POSITIONS.
CANADIAN TAXATION
In the respective opinions of the Canadian legal advisors to the Province
and the underwriters, the following summary fairly describes the principal
Canadian federal income tax consequences generally applicable to a beneficial
owner of notes acquired pursuant to this prospectus supplement who, for purposes
of the Income Tax Act (Canada) (the "Act") and at all relevant times, is not and
is not deemed to be resident in Canada (a "Non-Resident Holder"). This summary
is based on the provisions of the Act and the regulations thereunder in force at
the date hereof. This summary does not take into account provincial, territorial
or foreign income tax considerations and is not applicable to Canadian
residents. No assurances can be given that changes in the law or administrative
practices or future court decisions will not affect the tax treatment of a
Non-Resident Holder.
The Province is not required to deduct or withhold tax from interest or
principal paid or credited by the Province on the notes to a Non-Resident
Holder. In addition, no other tax on income or capital gains is payable under
the Act in respect of the notes or the interest thereon by Non-Resident Holders
who do not use or hold, and are not deemed or considered to use or to hold, the
notes in carrying on business in Canada and are not otherwise required under the
Act to include an amount in respect of the notes in computing income from
carrying on a business in Canada.
S-13
UNITED STATES TAXATION
The following describes the material U.S. federal income tax consequences
of the ownership and disposition of the notes. This discussion only applies to:
- initial holders who purchase notes at the "issue price" (as defined
below); and
- holders who hold their notes as capital assets.
This discussion does not describe all of the tax consequences that may be
relevant to a holder in light of his particular circumstances or to holders
subject to special rules, such as:
- certain financial institutions;
- insurance companies;
- dealers in securities or foreign currencies;
- persons holding notes as part of a hedge;
- United States Holders whose functional currency is not the U.S. dollar;
- partnerships or other entities classified as partnerships for U.S.
federal income tax purposes;
- persons subject to the alternative minimum tax; or
- persons carrying on a trade or business in Canada through a permanent
establishment.
This summary is based on the Internal Revenue Code of 1986, as amended to
the date hereof, administrative pronouncements, judicial decisions and final,
temporary and proposed Treasury Regulations, changes to any of which subsequent
to the date of this Prospectus may affect the tax consequences described herein.
Persons considering the purchase of notes should consult their tax advisors with
regard to the application of the United States federal income tax laws to their
particular situations as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
As used herein, the term "United States Holder" means a beneficial owner of
a note that is for U.S. federal income tax purposes:
- a citizen or resident of the United States;
- a corporation, or other entity taxable as a corporation for U.S. federal
income tax purposes, created or organized in or under the laws of the
United States or of any political subdivision thereof; or
- an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source;
The term United States Holder also includes certain former citizens and
residents of the United States.
The term "Non-United States Holder" means a beneficial owner of a note that
is, for U.S. federal income tax purposes:
- an individual who is classified as a nonresident alien for U.S. federal
income tax purposes;
- a foreign corporation; or
- an estate or trust that is not subject to U.S. taxation on its worldwide
income.
The "issue price" of a note is the first price to the public (not including
bond houses, brokers or similar persons or wholesalers) at which a substantial
amount of the notes is sold for money.
TAX CONSEQUENCES TO UNITED STATES HOLDERS
Payments of Interest. Interest (including any Additional Amounts) paid on
a note will be taxable to a United States Holder as ordinary interest income at
the time it accrues or is received in accordance with the Holder's method of
accounting for U.S. federal income tax purposes. Interest income earned by a
United States Holder with respect to a note will constitute foreign source
income for U.S. federal income tax purposes, which may be relevant to a United
States Holder in calculating the Holder's foreign tax credit limitation. The
limitation on foreign taxes eligible for credit is calculated separately with
respect to specific classes of income. For this purpose, interest paid on the
notes will generally constitute "passive income", or in the case of certain
United States Holders, "financial services income".
Sale, Exchange or Retirement of the Notes. Upon the sale, exchange or
retirement of a note, a United States Holder will recognize taxable gain or loss
equal to the difference between the amount realized on the sale, exchange or
S-14
retirement and the Holder's adjusted tax basis in the note. Gain or loss, if
any, will generally be U.S. source income for purposes of computing a United
States Holder's foreign tax credit limitation. For these purposes, the amount
realized does not include any amount attributable to accrued interest on the
note. Amounts attributable to accrued interest are treated as interest as
described under "Payments of Interest" above. Except as described below, gain or
loss realized on the sale, exchange or retirement of a note will generally be
capital gain or loss and will be long-term capital gain or loss if at the time
of sale, exchange or retirement the note has been held for more than one year.
Backup Withholding and Information Reporting. Information returns will be
filed with the Internal Revenue Service in connection with payments on the notes
and the proceeds from a sale or other disposition of the notes. United States
Holders will be subject to United States backup withholding tax on these
payments if they fail to provide their taxpayer identification number to the
paying agent and comply with certain certification procedures or otherwise
establish an exemption from backup withholding. The amount of any backup
withholding from a payment to United States Holders will be allowed as a credit
against their United States federal income tax liability and may entitle them to
a refund, provided that the required information is furnished to the Internal
Revenue Service.
TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS
Non-United States Holders who are engaged in a trade or business in the
United States and whose payments on a note are effectively connected with their
conduct of such trade or business may be subject to U.S. federal income tax on
such payments as well as upon the disposition of the notes, and should consult
their own tax advisors with respect to U.S. tax consequences of the ownership
and disposition of the notes, including the possible imposition of a 30% branch
profits tax. Individuals who are present in the United States for 183 days or
more in any taxable year should also consult their own tax advisors as to the
U.S. federal income tax consequences of the ownership and disposition of notes.
Backup Withholding and Information Reporting. In certain circumstances,
information returns may be filed with the Internal Revenue Service in connection
with payments on the notes and the proceeds from a sale or other disposition of
the notes by Non-United States Holders. Non-United States Holders may be subject
to U.S. backup withholding on these payments unless they comply with certain
certification procedures to establish that they are not United States persons.
The amount of any backup withholding from a payment to Non-United States Holders
will be allowed as a credit against their U.S. federal income tax liability and
may entitle them to a refund, provided that the required information is
furnished to the Internal Revenue Service.
POSSIBLE EUROPEAN UNION REQUIREMENTS
On December 13, 2001, the Council of the European Union published a revised
draft directive regarding the taxation of savings income. It is proposed that,
subject to a number of important conditions being met, Member States will be
required to provide to the tax authorities of another Member State details of
payments of interest or other similar income paid by a person within its
jurisdiction to an individual resident in that other Member State, except that
Belgium, Luxembourg and Austria will operate a withholding tax system for a
transitional period in relation to such payments. The proposed directive is not
yet final and it may be subject to further amendment and/or clarification.
S-15
UNDERWRITING
The activities of the underwriters are being led jointly by CIBC World
Markets plc and Salomon Smith Barney Inc. subject to the terms and conditions
set forth in an underwriting agreement dated as of October 16, 2002, each of the
underwriters named below, for whom CIBC World Markets plc and Salomon Smith
Barney Inc. are acting as representatives, has severally agreed to purchase, and
the Province has agreed to sell to each of them severally, the respective
principal amounts of notes set forth opposite its name below. Under the terms
and conditions of the underwriting agreement, the underwriters are committed to
take and pay for all of the notes, if any are taken.
<Table>
<Caption>
PRINCIPAL AMOUNT
OF NOTES
UNDERWRITER ----------------
- -----------
CIBC World Markets plc...................................... U.S.$206,250,000
Salomon Smith Barney Inc.................................... 206,250,000
Credit Suisse First Boston Corporation...................... 30,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 12,500,000
National Bank Financial Inc................................. 12,500,000
RBC Dominion Securities Corporation......................... 12,500,000
Bank of Montreal............................................ 5,000,000
BNP Paribas Securities Corp................................. 5,000,000
Casgrain & Company (USA) Limited............................ 5,000,000
Scotia Capital Inc.......................................... 5,000,000
----------------
Total.................................................. U.S.$500,000,000
================
</Table>
The underwriters have advised the Province that they propose initially to
offer the notes to the public at the public offering price set forth on the
cover page of this prospectus supplement, and to certain dealers at such price
less a concession not in excess of 0.15% of the principal amount of the notes.
After the initial public offering, the public offering price and concession may
be changed.
The notes are offered for sale in Canada, the United States, and those
jurisdictions in Europe and Asia where it is legal to make such offers.
Each of the underwriters has agreed that it has not offered, sold or
delivered, and it will not offer, sell or deliver any of the notes, directly or
indirectly, or distribute this prospectus supplement or accompanying basic
prospectus or any other offering material relating to the notes, in or from any
jurisdiction except under circumstances that will to the best of its knowledge
and belief after reasonable inquiry result in compliance with the applicable
laws and regulations thereof and which will not impose any obligations on the
Province except as set forth in the underwriting agreement.
Each of the underwriters has also agreed that it has complied and will
comply with all applicable provisions of the Financial Services and Markets Act
2000, as amended, with respect to anything done by it in relation to the notes
in, from or otherwise involving the United Kingdom.
Each of the underwriters has agreed that it has not offered or sold, and it
will not offer or sell, directly or indirectly, any of the notes in or to
residents of Japan or to any persons for reoffering or resale, directly or
indirectly, in Japan or to any resident of Japan except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law available
thereunder and in compliance with the other relevant laws of Japan.
In addition, each of the underwriters has agreed that (i) it has not
offered or sold and will not offer or sell, directly or indirectly, in Hong Kong
by means of any document, any notes other than to persons whose ordinary
business is to buy or sell shares or debentures, whether as principal or agent,
or in circumstances which do not constitute an offer to the public within the
meaning of the Companies Ordinance (Cap. 32) of Hong Kong and (ii) it has not
issued and will not issue, directly or indirectly, any invitation or
advertisement relating to the notes in Hong Kong (except if permitted to do so
under the securities laws of Hong Kong) other than with respect to notes
intended to be disposed of to persons outside Hong Kong or to be disposed of in
Hong Kong only to persons whose business involves the acquisition, disposal, or
holding of securities, whether as principal or agent.
Purchasers may be required to pay stamp taxes and other charges in
accordance with the laws and practices of the country of purchase in addition to
the issue price set forth above.
S-16
The Province has been advised by the representatives that the
representatives intend to make a market in the notes, but are not obligated to
do so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of, or the trading market for, the notes.
In connection with the sale of the notes, certain of the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the notes. Specifically, the underwriters may overallot the offering, creating a
short position. In addition, the underwriters may bid for, and purchase, the
notes in the open market to cover short positions 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 levels. The underwriters will not be required
to engage in these activities, and may end any of these activities at any time.
In the ordinary course of business, certain of the underwriters and their
affiliates have engaged in and may in the future engage in various investment
banking and commercial banking transactions with the Province.
The Province has agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the U.S. Securities Act of
1933, as amended.
The Province estimates that it will pay approximately U.S.$167,800 for
expenses associated with the offering of the notes, including reimbursement of
up to U.S.$90,000 for certain expenses of the underwriters.
LEGAL OPINIONS
The validity of the notes will be passed upon by the Deputy Attorney
General of the Province as Canadian counsel for the Province and by Stewart
McKelvey Stirling Scales, Canadian counsel for the underwriters. Certain U.S.
legal matters in connection with the offering of the notes will be passed upon
on behalf of the underwriters by Cravath, Swaine & Moore of New York, New York.
From time to time, Cravath, Swaine & Moore have rendered legal services to the
Province.
The statements under "Tax Matters -- Canadian Taxation" are set forth
herein in reliance upon the opinion of the Deputy Attorney General of the
Province and Stewart McKelvey Stirling Scales, Canadian counsel for the
underwriters, and the statements under "Tax Matters -- United States Federal
Income Taxation" are set forth herein in reliance upon the opinion of Cravath,
Swaine & Moore, United States counsel for the underwriters.
AUTHORIZED AGENTS IN THE UNITED STATES
The Authorized Agent of the Province in the United States is the Deputy
Consul General of the Canadian Consulate General, 1251 Avenue of the Americas,
New York, N.Y. 10020.
GENERAL INFORMATION
The notes have been accepted for clearance through Clearstream, Luxembourg
and Euroclear. The Common Code for the notes is 15680113, the ISIN number for
the notes is US642866 FD44 and the CUSIP number for the notes is 642866 FD4.
The issue and sale of the notes was authorized by Orders of the Lieutenant
Governor in Council of New Brunswick dated April 4, 2002, September 19, 2002 and
September 26, 2002 made pursuant to the Loan Act 2000, the Electric Power Act
and the Provincial Loans Act.
Save as disclosed in this prospectus supplement or in the basic prospectus
(including the documents incorporated by reference therein), there has been no
material adverse change in the financial condition of the Province which is
material in the context of the issue of the notes since March 31, 2002.
Save as disclosed in this prospectus supplement or in the basic prospectus
(including the documents incorporated by reference therein), the Province is not
involved in any litigation, arbitration or administrative proceedings which are
material in the context of the issue of the notes nor, so far as the Province is
aware, are any such litigation, arbitration or administrative proceedings
involving it pending or threatened.
Copies of the following documents will, so long as any notes are
outstanding, be available for inspection during usual business hours at the
specified office of Dexia Banque Internationale a Luxembourg societe anonyme in
Luxembourg: (a) the documents incorporated by reference herein (copies of which
may be obtained free of charge from Dexia Banque Internationale a Luxembourg
societe anonyme in Luxembourg); (b) the fiscal agency agreement (which
S-17
will contain the form of global note); and (c) the Orders of the Lieutenant
Governor in Council of New Brunswick authorizing the issue and sale of the
notes.
Dexia Banque Internationale a Luxembourg societe anonyme in Luxembourg has
been appointed as the Luxembourg listing, transfer and paying agent.
S-18
ISSUER
PROVINCE OF NEW BRUNSWICK
Department of Finance
Treasury Division
670 King Street, Room 376
Fredericton, New Brunswick
Canada E3B 5H1
REGISTRAR, FISCAL, TRANSFER AND PRINCIPAL PAYING AGENT
ROYAL BANK OF CANADA
71 Queen Victoria Street
London EC4V 4DE
England
LUXEMBOURG LISTING, TRANSFER AND PAYING AGENT
DEXIA BANQUE INTERNATIONALE A LUXEMBOURG SOCIETE ANONYME
69, route d'Esch
L-1470 Luxembourg, Luxembourg
LEGAL ADVISORS
<Table>
to the Issuer to the underwriters
as to Canadian law as to Canadian law
DEPUTY ATTORNEY GENERAL STEWART MCKELVEY STIRLING SCALES
Legal Services Division 44 Chipman Hill
P.O. Box 6000 Saint John, New Brunswick
670 King Street, Room 444 Canada E2L 4S6
Fredericton, New Brunswick
Canada E3B 5H1
as to U.S. law
CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 Eighth Avenue
New York, New York
U.S.A. 10019
</Table>
S-19
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
(NEW BRUNSWICK COATE OF ARMS
U.S. $500,000,000
Province of New Brunswick
(Canada)
P.O. Box 6000
Fredericton, New Brunswick
Canada E3B 5H1
(506) 453-2515
Debt Securities
The Province of New Brunswick intends to issue from time to time debt
securities in an aggregate principal amount of up to U.S. $500,000,000. The
specific terms of each series of debt securities will be set forth in supplement
to this prospectus. You should read this prospectus and the related 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 determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
The date of this prospectus is July 25, 2002
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
About This Prospectus....................................... 2
Province of New Brunswick................................... 2
Application of Proceeds..................................... 2
Description of Debt Securities.............................. 2
Plan of Distribution........................................ 4
Authorized Representatives.................................. 4
Sources of Information...................................... 5
Legal Opinions.............................................. 5
Where You Can Get More Information.......................... 5
</Table>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission under a "shelf" registration process.
Using this process, we may offer the debt securities this prospectus describes
in one or more offerings with a total initial offering price of up to
$500,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we use this prospectus to offer securities,
we will provide a prospectus supplement and, if applicable, a pricing
supplement. The prospectus supplement and any pricing supplement will describe
the specific terms of that offering. The prospectus supplement and any pricing
supplement may also add to, update or change the information this prospectus
contains. Please carefully read this prospectus, the prospectus supplement and
any pricing supplement, in addition to the information contained in the
documents we refer to under the heading "Where You Can Find More Information".
PROVINCE OF NEW BRUNSWICK
The Province of New Brunswick is located on the eastern seaboard of Canada
and has a total land area of 28,355 square miles of which about 12,877 square
miles are Crown Lands owned by the Province. The Province's population is
concentrated principally in the valleys of the St. John River and other rivers.
A large part of the Province is covered by forests, which constitute a major
natural resource. Other natural resources include fish and shellfish, farmland
and base metals, coal, potash, limestone and other minerals. The location of the
Province provides the advantage of cost effective water transportation for its
products to export markets in the eastern United States, Great Britain and
Western Europe. According to Statistics Canada, the population of the Province
on July 1, 2001 was estimated at 757,077. The three largest urban areas of the
Province and their respective populations based on 1996 census figures are Saint
John (125,705), Moncton (113,491) and Fredericton (78,950), the capital of the
Province.
APPLICATION OF PROCEEDS
The net proceeds to the Province from the sale of the debt securities will
be added to the Consolidated Fund of the Province to be used for general
Provincial purposes and may be advanced to, or applied to the purchase of
securities issued by, New Brunswick Power Corporation.
DESCRIPTION OF DEBT SECURITIES
The following is a brief summary of the terms and conditions of the debt
securities. You should review the form of debt security for more details
regarding the provisions described below and for other provisions that may be
important to you. A form of the debt securities is filed as an exhibit to the
registration statement. See "Where You Can Find More Information".
GENERAL
The debt securities may be issued in one or more series as we authorize
from time to time. The prospectus supplement relating to particular debt
securities will describe the following terms:
- the designation, aggregate principal amount and authorized
denominations;
- the offering price;
2
- the maturity date;
- the interest rate;
- the interest payment dates;
- any optional or mandatory redemption terms or repurchase or sinking fund
provisions; and
- other specific provisions.
The debt securities will be issued under the authority of the Provincial
Loans Act and Orders of the Lieutenant-Governor in Council of the Province and,
where required, under a loan act or the Electric Power Act. The debt securities
will be direct and unconditional obligations of the Province, for the payment
and performance of which the full faith and credit of the Province will be
pledged. The debt securities will not be secured but will rank pari passu with
all other general obligations of the Province outstanding at the date of issue
of the debt securities or issued thereafter, without any preference granted by
the Province one above the other by reason of priority of date of issue,
currency of payment or otherwise.
Interest will be payable in lawful money of the United States of America by
check drawn on a bank in the City of New York mailed to the registered holders
of the debt securities at their registered addresses, unless other arrangements
are made.
SINKING FUND
Sinking fund payments of not less than 1% of the then outstanding principal
amount of any series of debt securities (calculated as provided in the
Provincial Loans Act) are required to be made on or before the anniversary date
of each issue. Sinking fund payments are to be retained and invested for use by
the Province to pay at maturity the related series of debt securities or other
sinking fund debt of the Province or to redeem in advance of maturity sinking
fund debt of the Province. The debt securities shall not be otherwise redeemable
from the sinking fund. The sinking fund investments are limited to:
(a) direct obligations of the Government of Canada, any province of
Canada or any municipality in the Province of New Brunswick;
(b) obligations guaranteed by the Government of Canada, any province of
Canada or any agency of the Province of New Brunswick;
(c) obligations of a religious or educational corporation when secured by
a first mortgage on property and designated as being a trustee
investment by an Act of the Legislature of the Province of New
Brunswick; and
(d) deposit receipts, deposit notes, certificates of deposit, acceptances
and other similar instruments issued or endorsed by any Canadian
chartered bank.
GLOBAL SECURITIES
We may issue debt securities in the form of one or more global securities
which will be deposited with, or on behalf of a depository or its nominee. The
specific terms of the depository arrangement with respect to any debt securities
of a series and the name of the deposition, will be described in the prospectus
supplement relating to that series.
ENFORCEABILITY
The Province has not agreed to waive any immunity from jurisdiction nor has
it appointed an agent in New York upon which process may be served for any
purpose. In the absence of a waiver of immunity by the Province in any
proceeding leading to an order by a court of another jurisdiction, it may not be
possible to obtain in New Brunswick a judgment based solely on the order of the
court of such other jurisdiction. However, the United States Foreign Sovereign
Immunities Act of 1976 may provide an effective means of service and preclude
granting sovereign immunity in actions under the United States Federal
securities laws. Such Act may also provide a means for limited execution upon
property of the Province in the United States as is related to the service or
administration of the debt securities.
The debt securities will be governed by the laws of the Province. The
Province may be sued in the courts of New Brunswick, and no applicable law
requires the consent of any public official or authority for proceedings to be
brought
3
or judgment to be obtained against the Province arising out of or relating to
obligations under the debt securities, nor, subject to the Proceedings Against
the Crown Act, is any immunity from suit available to the Province in any action
in such courts, irrespective of whether a party to the action or the holder of
debt securities is or is not resident within New Brunswick or is or is not a
citizen of Canada.
The Proceedings Against the Crown Act requires that written notice be
served on the Attorney General of the Province at least two months before the
commencement of an action. Although no order obtained in an action brought in
the courts of New Brunswick against the Province may be enforced by execution,
the Proceedings Against the Crown Act stipulates that if the order provides for
the payment of money by way of damages or otherwise, or of costs, the Minister
of Finance shall, after the expiry of the applicable appeal period or final
determination of any appeal to the Court of Appeal of New Brunswick, pay out of
the Consolidated Fund to the person entitled, or to his order, the amount due
together with interest, if any, lawfully due thereon, provided that payment of
the whole of the amount so payable, or any part thereof, may be suspended by
court order pending determination of an appeal from the judgment of the said
Court of Appeal. In addition, under that Act certain remedies, including the
remedies of specific performance and injunction, are not available but in the
place of such remedies the court may make a declaratory order.
PLAN OF DISTRIBUTION
The Province may sell debt securities in any of three ways:
- through underwriters or dealers,
- directly to a limited number of institutional purchasers or to a single
purchaser or
- through agents.
The prospectus supplement with respect to each series of debt securities sets
forth the terms of the offering of that series of debt securities, including the
name or names of any underwriters, dealers or agents, the purchase price and the
proceeds to the Province from the sale, any underwriting discounts and other
items constituting underwriters' or agents' compensation, any initial public
offering price and any discounts, concessions or commissions allowed or
reallowed or paid to dealers.
If underwriters are used in the sale, the debt securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase debt securities may be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of the debt securities if any are purchased. Any initial public offering
price and any discounts, concessions or commissions allowed or reallowed or paid
to dealers may be changed from time to time.
Debt securities may be sold directly by the Province or through agents
designated by the Province from time to time. Any agent involved in the offer or
sale of debt securities in respect of which this prospectus is delivered will be
named, and any commissions payable by the Province to that agent will be set
forth, in the prospectus supplement. Unless otherwise indicated in the
prospectus supplement, agents will be acting on a best efforts basis for the
period of their appointment.
The Province may authorize agents, underwriters or dealers to solicit
offers by certain specified institutions to purchase debt securities from the
Province at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Delayed delivery contracts will be subject to
those conditions set forth in the prospectus supplement. The prospectus
supplement will set forth the commissions payable for solicitation of any
delayed delivery contracts.
Agents and underwriters may be entitled under agreements entered into with
the Province to indemnification by the Province against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments which the agents or underwriters may be
required to make. Agents and underwriters may engage in transactions with, or
perform services for, the Province in the ordinary course of business.
AUTHORIZED REPRESENTATIVES
The authorized representatives of the Province in the United States are the
Hon. Michael Phillips and Brian Schumacher, at the Canadian Consulate General,
1251 Avenue of the Americas, New York, N.Y. 10020.
4
SOURCES OF INFORMATION
Information included or incorporated by reference in this prospectus which
is designated as being taken from a publication of the Province or Canada, or
any agency or instrumentality of either, is included herein upon the authority
of that publication as a public official document.
All financial information incorporated by reference in this prospectus was
obtained from the annual Budget and Main Estimates of the Province of New
Brunswick, the financial reviews pertaining thereto and the Public Accounts
(subject to certain adjustments for purposes of comparability) of the Province
of New Brunswick, or was prepared by representatives of the Department of
Finance of the Province of New Brunswick in their official capacities. The
information set forth under "Province of New Brunswick" and in the documents
incorporated by reference, other than as described in the preceding paragraph,
was prepared by representatives of the Department of Finance in their official
capacities.
LEGAL OPINIONS
The legality of each series of debt securities offered by this prospectus
will be passed upon on behalf of the Province by the Attorney General or by the
Deputy Attorney General of the Province and, if sold to or through underwriters,
will be passed upon on behalf of the several underwriters as to matters of
United States law by Cravath, Swaine & Moore of New York, New York.
WHERE YOU CAN FIND MORE INFORMATION
The Province is not subject to the informational requirements of the
Securities Exchange Act. The Province has commenced filing annual reports on
Form 18-K with the Securities and Exchange Commission on a voluntary basis.
These reports and their exhibits include certain financial, statistical and
other information concerning the Province. The Province may also file from time
to time amendments on Form 18-K/A to its reports on Form 18-K, including
amendments for the purpose of filing with the Securities and Exchange Commission
exhibits which have not been included in the registration statement or
registration statements to which this prospectus and any prospectus supplement
relates. These exhibits would then be incorporated by reference into each of the
Province's outstanding registration statements. These reports may be inspected
at the Securities and Exchange Commission's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20449. You can obtain information about the
operation of the Securities and Exchange Commission's public reference room by
calling the Securities and Exchange Commission at 1-800-SEC-0330.
This prospectus is part of a registration statement the Province has filed
with the Securities and Exchange Commission relating to the debt securities.
This prospectus does not contain all the information the registration statement
sets forth or includes in its exhibits and schedules, in accordance with the
rules and regulations of the Securities and Exchange Commission, and we refer
you to that omitted information. The statements this prospectus makes pertaining
to the content of any contract, agreement or other document that is an exhibit
to the registration statement necessarily are summaries of their material
provisions, and we qualify them in their entirety by reference to those exhibits
available at the Securities and Exchange Commission's public reference room.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information the Province files with it, which means we can
disclose important information to you by referring you to those documents. The
information we incorporate by reference is an important part of this prospectus,
and later information that the Province files with the Securities and Exchange
Commission will automatically update and supersede that information. We
incorporate by reference the documents listed below, and any future filings the
Province makes with the Securities and Exchange Commission on Form 18-K or Form
18-K/A until all the debt securities are sold:
- our annual report on Form 18-K for the year ended March 31, 2001; and
- amendment to our annual report on Form 18-K/A dated April 22, 2002.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon written or
oral request, a copy of any or all the documents we incorporate by reference in
this prospectus, other than any exhibit to any of those documents, unless we
have specifically incorporated that exhibit by
5
reference into the information this prospectus incorporates. You may request
copies by writing or telephoning the Province at the following address:
The Province of New Brunswick
Department of Finance
Treasury Division
670 King Street, Room 376
Fredericton, New Brunswick, Canada E3B 5H1
Attention: Assistant Deputy Minister, Treasury Division
Telephone: (506) 453-2515
You should rely only on the information we have provided or incorporated by
reference in this prospectus or any prospectus supplement or pricing supplement.
We have not authorized any person (including any salesman or broker) to provide
information other than that which this prospectus or any prospectus supplement
or pricing supplement provides. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in
any jurisdiction where the offer is not permitted. You should not assume that
the information in this prospectus or any prospectus supplement is accurate as
of any date other than the date on its cover page or that any information in any
document we have incorporated by reference is accurate as of any date other than
the date of the document incorporated by reference. Accordingly, we urge you to
review each document we subsequently file with the Securities and Exchange
Commission and incorporate by reference as described above for updated
information.
6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(New Brunswick Logo)
U.S.$500,000,000
PROVINCE OF NEW BRUNSWICK
(CANADA)
3.50% NOTES DUE OCTOBER 23, 2007
-----------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------
CIBC WORLD MARKETS
SALOMON SMITH BARNEY
REPRESENTATIVES OF THE UNDERWRITERS
October 16, 2002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------