PROSPECTUS SUPPLEMENT: GE CAPITAL CORPORATION
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-123085
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 17,
2005
U.S. $26,404,605,650
General Electric Capital Corporation
Global Medium-Term Notes, Series A
Due From 9 Months to 60 Years From Date of Issue
General Electric Capital Corporation may offer at various times
up to U.S. $26,404,605,650 of its global medium-term notes.
We may offer notes denominated in U.S., foreign and composite
currencies. If we offer original issue discount notes, we will
use their initial offering prices to determine when we have
offered U.S. $26,404,605,650 of notes.
The following terms may apply to the notes. We will provide the
final terms for each note in a pricing supplement.
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The notes will mature in 9 months to 60 years. |
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The notes may be subject to redemption at our option or
repayment at the option of the holder. |
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The notes will be either senior or subordinated debt obligations. |
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The notes will bear interest at either a fixed or floating rate.
The floating interest rate formula may be based on: |
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CD Rate
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Treasury Rate |
Commercial Paper Rate
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Prime Rate |
Federal Funds Rate
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CMT Rate |
LIBOR
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Eleventh District Cost of Funds Rate |
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The notes may be issued as indexed notes, dual currency notes,
renewable notes, extendible notes or amortizing notes. |
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The notes will be in certificated or book-entry form. |
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Interest will be paid on fixed rate notes on March 15 and
September 15 of each year or as otherwise specified in the
applicable pricing supplement. Interest will be paid on floating
rate notes on dates specified in the applicable pricing
supplement. |
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The notes will have minimum denominations of $1,000 for
book-entry notes and $100,000 for certificated notes, in each
case increased in multiples of $1,000, unless otherwise
specified in the applicable pricing supplement. We will specify
the minimum denominations for notes denominated in a foreign or
composite currency in the applicable pricing supplement. |
Notes issued hereunder may be listed on, or admitted to trading
on or by, one or more stock exchange(s), competent
authority(ies) and/or market(s), in each case as specified in
the applicable pricing supplement, including on the official
list maintained by the United Kingdoms Listing Authority
and on the London Stock Exchanges Gilt Edged and Fixed
Interest Market. Any such listing and/or admission to trading,
or any offer of notes to the public, in the European Economic
Area will be made in compliance with the provisions of the
European Unions Directive 2003/71/ EC and all applicable
rules and regulations promulgated thereunder. We may also issue
notes which are listed, quoted and/or traded on or by such other
or further stock exchanges, competent listing authorities and/or
quotation systems as we may decide. We may also issue unlisted
notes. A market for any particular tranche of notes may not
develop.
We expect to receive between $26,246,178,016 and $26,391,403,347
of proceeds from the sale of the notes after paying the
agents commissions of between $13,202,303 and
$158,427,634. The exact proceeds from the sale of each note will
be determined at the time of issuance.
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. Any representation to the contrary is a
criminal offense.
Citigroup
The date of this prospectus supplement is August 24, 2005.
ABOUT THIS PROSPECTUS SUPPLEMENT
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus, all of which should be read together.
We have not authorized anyone to provide you with information
different from that contained in this prospectus supplement and
the accompanying prospectus. If anyone provides you with
different or inconsistent information, you should not rely on
it. We will only offer to sell notes and seek offers to buy such
notes in jurisdictions where offers and sales are permitted.
Having made all reasonable enquiries, we confirm that this
prospectus supplement and the accompanying prospectus contain
all information with respect to us which is material in the
context of the notes to be issued by us, that the information
contained in this prospectus supplement and the accompanying
prospectus is true and accurate in all material respects and is
not misleading, that the opinions and intentions (if any)
expressed in this prospectus supplement and the accompanying
prospectus are honestly held and that there are no other facts
the omission of which would make any such information or the
expression of such opinions or intentions misleading.
This prospectus supplement updates, revises and supercedes our
prospectus supplement dated May 17, 2005. The delivery of
this prospectus supplement does not at any time imply that the
information contained in this prospectus supplement about us is
correct at any time subsequent to the date hereof or that any
other information supplied in connection with the offering of
any notes is correct at any time subsequent to the date of the
document containing such information.
In connection with the issue and distribution of any notes,
the person (if any) disclosed as the stabilizing manager in the
applicable pricing supplement (or any person acting on behalf of
such person) may over-allot or effect transactions with a view
to supporting the market price of the notes at a level higher
than that which might otherwise prevail for a limited period.
However, there may be no obligation on such person to do this.
Such stabilizing, if commenced, may be discontinued at any time,
and must be brought to an end after a limited period.
DOCUMENTS INCORPORATED BY REFERENCE
We are incorporating by reference into this prospectus
supplement and accompanying prospectus our Annual Report on
Form 10-K, as amended by amendment No. 1 on
Form 10-K/ A, for the fiscal year ended December 31,
2004, our Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2005 and June 30, 2005, and our
Current Reports on Form 8-K filed on May 6, 2005 and
June 23, 2005 which have been filed with the United States
Securities and Exchange Commission (the Commission)
pursuant to the United States Securities Exchange Act of 1934
(the 1934 Act). All reports filed by us with
the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this prospectus
supplement shall be deemed to be incorporated in the prospectus
supplement and accompanying prospectus by reference and to be a
part hereof from the date of filing of such documents; provided,
however, that we are not incorporating any information furnished
under either Item 2.02 or Item 7.01 of any Current
Report on Form 8-K unless, and except to the extent,
specified in any such Current Report on Form 8-K. You may
request a copy of these filings at no cost. Requests should be
directed to David P. Russell, Senior Counsel, Corporate Treasury
and Assistant Secretary, General Electric Capital Corporation,
260 Long Ridge Road, Stamford, Connecticut 06927, Telephone
No. (203) 357-4000. See also Where You Can Get More
Information On GECC in the accompanying prospectus.
Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded
for the purposes of this prospectus supplement to the extent
that a statement contained herein (or in any subsequently filed
document incorporated or deemed to be incorporated by reference
herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this prospectus
supplement.
S-2
THE COMPANY
General Electric Capital Corporation (GECC) was
incorporated in 1943 in the State of New York under the
provisions of the New York Banking Law relating to investment
companies, as successor to General Electric Contracts
Corporation, which was formed in 1932. Until November 1987, our
name was General Electric Credit Corporation. On July 2,
2001, we changed our state of incorporation to Delaware. All of
our outstanding common stock is owned by General Electric
Capital Services, Inc. (GE Capital Services),
formerly General Electric Financial Services, Inc., the common
stock of which is in turn wholly owned directly or indirectly by
General Electric Company (GE Company). Financing and
services offered by us are diversified, a significant change
from the original business of GECC, that is, financing
distribution and sale of consumer and other GE Company products.
GE Company manufactures few of the products financed by us.
Our services are offered primarily within the United States,
Canada, Europe and the Pacific Basin. These operations are
subject to a variety of regulations in their respective
jurisdictions. GECCs principal executive offices are at
260 Long Ridge Road, Stamford, Connecticut 06927-1600
(telephone number (203) 357-4000). At December 31,
2004, our employment totaled approximately 76,300.
Consolidated Ratio of Earnings to Fixed Charges
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Year Ended December 31, |
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Six Months |
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2001 |
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2002 |
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2003 |
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2004 |
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Ended |
2000 |
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(Restated) |
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(Restated) |
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June 30, 2005 |
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1.52 |
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1.73 |
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1.66 |
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1.86 |
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1.89 |
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1.72 |
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Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
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Year Ended December 31, |
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Six Months |
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2001 |
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2002 |
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2003 |
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2004 |
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Ended |
2000 |
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(Restated) |
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June 30, 2005 |
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1.50 |
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1.71 |
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1.65 |
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1.85 |
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1.88 |
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1.71 |
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For purposes of computing the consolidated ratios of earnings to
fixed charges and earnings to combined fixed charges and
preferred stock dividends, earnings consist of net earnings
adjusted for the provision for income taxes, minority interest,
interest capitalized (net of amortization) and fixed charges.
Fixed charges consist of interest on all indebtedness and
one-third of rentals, which we believe is a reasonable
approximation of the interest factor of such rentals.
S-3
RISKS OF FOREIGN CURRENCY NOTES AND INDEXED NOTES
This prospectus supplement does not describe all of the risks of
an investment in the notes. You should consult your own
financial and legal advisors about the risks entailed by an
investment in the notes and the suitability of your investment
in the notes in light of your particular circumstances. Notes
denominated in a foreign currency are not an appropriate
investment for investors who are unsophisticated with respect to
foreign currency transactions. Indexed notes are not an
appropriate investment for investors who are unsophisticated
with respect to the type of index or formula used to determine
the amount payable. You should also consider carefully, among
other factors, the matters described below.
Exchange Rates and Exchange Controls
An investment in a note denominated in a currency other than
U.S. dollars entails significant risks. These risks include
the possibility of significant changes in rates of exchange
between the U.S. dollar and such currency and the
possibility of the imposition or modification of foreign
exchange controls by either the United States or foreign
governments. These risks generally depend on factors over which
we have no control, such as economic and political events and
the supply of and demand for the relevant currencies. In recent
years, rates of exchange between the U.S. dollar and
certain currencies have been highly volatile, and you should be
aware that volatility may occur in the future. Fluctuations in
any particular exchange rate that have occurred in the past,
however, are not necessarily indicative of fluctuations in the
rate that may occur during the term of any note. Depreciation of
the specified currency for a note against the U.S. dollar
would result in a decrease in the effective yield of such note
(on a U.S. dollar basis) below its coupon rate and, in
certain circumstances, could result in a loss to you on a
U.S. dollar basis.
Except as set forth below, if payment in respect of a note is
required to be made in a currency other than U.S. dollars
and such currency is unavailable to us due to the imposition of
exchange controls or other circumstances beyond our control or
is no longer used by the relevant government or for the
settlement of transactions by public institutions of or within
the international banking community, then all payments in
respect of such note will be made in U.S. dollars until
such currency is again available to us or so used. The amounts
payable on any date in such currency will be converted into
U.S. dollars on the basis of the most recently available
market exchange rate for such currency or as otherwise indicated
in the applicable pricing supplement. Any payment in respect of
such note so made in U.S. dollars will not constitute an
event of default under the applicable Indenture. However, if we
cannot make payment in a specified currency solely because that
currency has been replaced by the euro, then, beginning with the
date the replacement becomes effective, we will be able to
satisfy our obligations under those notes by making payment in
euro.
The paying agent will make all determinations referred to above
at its sole discretion. All determinations will, in the absence
of clear error, be binding on holders of the notes.
The information set forth in this prospectus supplement with
respect to foreign currency risks is general in nature. We
disclaim any responsibility to advise prospective purchasers of
foreign currency notes with respect to any matters that may
affect the purchase, holding or receipt of payments of principal
of, premium, if any, and interest on such notes. Such persons
should consult their own counsel with regard to such matters.
Foreign Currency Judgments
The notes will be governed by and construed in accordance with
the internal laws of the State of New York. New York courts will
normally enter judgments or decrees for money damages in the
foreign currency in which notes are denominated. These amounts
are then converted into U.S. dollars at the rate of
exchange in effect on the date the judgment or decree is
entered. Courts in the United States outside New York
customarily have not rendered judgments for money damages
denominated in any currency other than the U.S. dollar.
S-4
Risks Associated with Indexed Notes
An investment in indexed notes entails significant risks that
are not associated with an investment in a conventional fixed
rate debt security. Indexation of the interest rate of a note
may result in an interest rate that is less than that payable on
a conventional fixed rate debt security issued at the same time,
including the possibility that no interest will be paid.
Indexation of the principal of and/or premium on a note may
result in an amount of principal and/or premium payable that is
less than the original purchase price of the note, including the
possibility that no amount will be paid. The secondary market
for indexed notes will be affected by a number of factors,
independent of our creditworthiness. Such factors include the
volatility of the index selected, the time remaining to the
maturity of the notes, the amount outstanding of the notes and
market interest rates. The value of an index can depend on a
number of interrelated factors, including economic, financial
and political events, over which we have no control. In
addition, if the formula used to determine the amount of
principal, premium and/or interest payable with respect to
indexed notes contains a multiple or leverage factor, the effect
of any change in the index will be increased. The historical
experience of an index should not be taken as an indication of
its future performance. Accordingly, you should consult your own
financial and legal advisors as to the risks entailed by an
investment in indexed notes.
Credit Ratings
The credit ratings assigned to our medium-term note program
reflect the rating agencies opinion of our ability to make
payments on the notes when due. The ratings do not take into
account fluctuations in the market value of the notes or the
possibility that payments on indexed notes may be less than
anticipated because of changes in the specified index.
S-5
DESCRIPTION OF NOTES
General
The following description of terms of the notes supplements and,
where noted, supercedes the general description of the debt
securities provided in the accompanying prospectus. However, 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 this prospectus supplement. It is important for you to
consider the information contained in the accompanying
prospectus, the prospectus supplement and the pricing supplement
in making your investment decision.
This section describes some technical concepts, and thus we
occasionally use defined terms. You will find an alphabetized
glossary at the end of this prospectus supplement that defines
all of the capitalized terms used in this section that are not
defined in this section.
The Indentures. We will issue the notes under one
of two indentures between us and JPMorgan Chase Bank, N.A.
(JPMorgan Chase). The Senior Notes (as defined
below) will be issued pursuant to an Amended and Restated
Indenture dated as of February 27, 1997, as supplemented by
a Supplemental Indenture dated as of May 3, 1999, a Second
Supplemental Indenture dated as of July 2, 2001 and a Third
Supplemental Indenture dated as of November 22, 2002 (the
Senior Indenture). The Subordinated Notes (as
defined below) will be issued pursuant to a Subordinated Debt
Indenture dated as of July 1, 2005, as amended and restated
by an Amended and Restated Subordinated Debt Indenture, dated as
of July 15, 2005 (the Subordinated Indenture
and, together with Senior Indenture, the
Indentures). Since we have only summarized the most
significant portions of the Indentures below, you may want to
refer to the Indentures for more detailed information.
Ranking. We will issue notes which will be
unsecured and will rank equally with all our other unsecured and
unsubordinated debt obligations (the Senior Notes).
We may also issue notes which will be unsecured and rank junior
to senior indebtedness (as defined in the Glossary)(the
Subordinated Notes). Please note that the
description of the terms of subordination and of the events of
default applicable to a series of Subordinated Notes in the
accompanying prospectus have been changed as described in
Description of Notes Subordinated Notes and
Subordinated Notes Events of Default
below, and such terms and events of default may be further
changed for a particular series of Subordinated Notes as
described in a pricing supplement. The Senior Notes and the
Subordinated Notes are collectively referred to herein as the
notes. The notes and the Indentures will not limit
us from incurring additional debt and will not place any other
financial restrictions on us.
Amount. The amount of notes we may offer with this
prospectus supplement will be reduced to the extent we issue
other debt securities, preferred stock, warrants or support
obligations under the prospectus. As of June 30, 2005, we
have issued and have outstanding approximately $110 billion
of our global medium-term notes, Series A. The amount of
additional notes of this series that we may offer with this
prospectus supplement is $26,404,605,650. In addition, we may
further increase the amount of notes of this series that we may
issue from time to time. The Indentures do not limit the amount
of notes that we may offer. If a note is an Original Issue
Discount Note, we will use its initial offering price to
calculate the amount issued.
Reopening of Issue. We may, from time to time,
without the consent of the holders of any notes, reopen an issue
of notes and issue additional notes with the same terms
(including Maturity and interest payment terms) as notes issued
on an earlier date. After such additional notes are issued they
will be fungible with the previously issued notes to the extent
specified in the applicable pricing supplement.
Maturity. Each note will mature on any day from
9 months to 60 years from its date of issue. However,
each note may also be subject to redemption at our option and
repayment at your option (see Optional Redemption
below).
Pricing Supplement. The pricing supplement
relating to a note will describe the following terms:
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the specified currency; |
S-6
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the nominal amount of the note; |
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whether the note is a fixed rate note, a floating rate note, an
indexed note, a dual currency note, a renewable note, an
extendable note or an amortizing note; |
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the issue price; |
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the expected net proceeds from the issue of the note; |
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the original issue date; |
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the stated maturity date; |
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whether the note will be a Senior Note or a Subordinated Note; |
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if the note will be a Subordinated Note, whether the
subordination provisions summarized herein or different
subordination provisions will apply; |
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any deletions or modifications of or additions to the Events of
Default and related remedies, or the covenants set forth in the
applicable Indenture; |
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for a fixed rate note, the rate per annum at which it will bear
interest, if any, and the date or dates on which interest will
be payable if other than March 15 and September 15; |
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for a floating rate note, the base rate, the initial interest
rate, the interest reset period, the interest payment dates, the
Index Maturity, the Designated LIBOR Currency, if any, the
maximum interest rate, if any, the minimum interest rate, if
any, the Spread and/or Spread Multiplier, if any, and any other
terms relating to the particular method of calculating the
interest rate for the note; |
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whether the note is an Original Issue Discount Note; |
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for an indexed note, the manner in which interest payments and
the principal amount payable at Maturity will be determined; |
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if such note is an amortizing note, an amortization schedule; |
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whether the note may be redeemed at our option, or repaid at the
holders option prior to the stated maturity date as
described further under Optional Redemption or
Repayment below, and if so, the terms of the redemption or
repayment; |
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for notes issued in currencies that may be replaced by the euro,
redenomination provisions, if any (see Euro
Redenomination below); |
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whether the notes will be listed on, or admitted to trading on
or by, one or more stock exchange(s), competent authority(ies)
and/or market(s) or whether the notes will be unlisted; |
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in the case of foreign currency notes, whether the notes will be
issued in the form of both a DTC global note and international
global note as described below; |
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whether the notes are a reopening of notes previously
issued; and |
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any other terms that do not conflict with the provisions of the
Indentures. |
Forms of pricing supplements relating to fixed rate notes and
floating rate notes are attached to this prospectus supplement
as Annex A and Annex B, respectively. However, the
pricing supplement for any offering of notes may vary from these
forms.
Form of the Notes. We will issue the notes either
in registered certificated form or pursuant to a book-entry
system.
Book-entry notes. When we issue notes in
book-entry form, we will issue one or more global certificates
representing the entire issue of notes. All of the notes that
have been issued previously have been issued in book-entry form.
Unless we otherwise specify in the applicable pricing
supplement, these certificates will name a nominee of The
Depository Trust Company, New York, New York (DTC)
as the owner of the
S-7
notes. DTC maintains a computerized system that will reflect
your ownership of the notes through an account you will maintain
with your broker/ dealer, bank, trust company or other
representative. If specified in the applicable pricing
supplements, notes denominated in currencies other than
U.S. dollars may also be issued in book-entry form and
registered in the name of a nominee for Euroclear and
Clearstream, Luxembourg. For additional information regarding
such notes, you should review Special Provisions
Relating to Certain Foreign Currency Notes below.
DTCs nominee will be considered the owner of your note in
our records and will be the entity entitled to cast a vote
regarding your note. However, DTC and the broker/ dealers,
banks, trust companies and other representatives that are part
of DTCs computerized system are required to contact you
for voting instructions.
Certificated notes. When we issue notes in
certificated form, you will receive a certificate evidencing
your note. JPMorgan Chase will issue certificated notes on our
behalf and will only prepare such certificated notes at our
request. The certificate will name you as the owner of the note,
unless you choose to have your broker/ dealer, bank, trust
company or other representative hold these certificates for you.
If your name appears on the certificate evidencing your note,
then you will be considered the owner of your note for all
purposes under the applicable Indenture. For example, if we need
to ask the holders of the notes to vote on a proposed amendment
to the notes, you will be asked to cast the vote regarding your
note. If you have chosen to have some other entity hold the
certificates for you, that entity will be considered the owner
of your note in our records and will be entitled to cast the
vote regarding your note. However, this entity is required to
contact you for voting instructions.
Exchanges. Certificated notes cannot be exchanged
for book-entry notes. Book-entry notes can be exchanged for
certificated notes only if (i) DTC notifies us that it is
unwilling or unable to hold global certificates and another
depositary is not appointed or (ii) we determine at any
time that the notes shall no longer be represented by global
notes, in which case we will inform DTC of such determination,
who will, in turn, notify participants of their right to
withdraw their notes from DTC. In these limited circumstances,
we will issue to you certificated notes in exchange for the
book-entry notes. There will be no service charge for this
exchange, but if a tax or other governmental charge is imposed,
we may require you to pay it.
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Special Provisions Relating to Certain Foreign Currency
Notes. |
If specified in the applicable pricing supplement, notes
denominated in currencies other than U.S. dollars may also
be issued in the form of a DTC global note and an international
global note registered in the name of a nominee for Euroclear
and Clearstream, Luxembourg. In such cases, the following
provisions shall apply:
Form of Notes. Notes offered and sold outside the
United States (international notes) will be
represented by beneficial interests in a fully registered
permanent global note (the international global
note), without interest coupons attached, which will be
registered in the name of a nominee for, and shall be deposited
with, a common depositary for, and in respect of interests held
through Euroclear and Clearstream, Luxembourg. Notes which are
offered and sold in the United States (DTC notes)
will be represented by beneficial interests in a fully
registered permanent global note (the DTC global
note and, together with the international global note, the
global notes), without interest coupons attached,
which will be deposited on or about the closing date with a
custodian for, and registered in the name of Cede & Co,
as nominee for, DTC. Beneficial interests in the global notes
will be shown on, and transfers thereof will be effected only
through, records maintained by DTC, Euroclear and Clearstream
Luxembourg and their participants.
Payments. If the pricing supplement provides for
both a DTC global note and an international global note, then a
holder of an interest in a DTC global note will receive all
payments under the DTC notes in United States dollars, unless
such holder makes an election, as described herein, for payment
in the specified currency. Distributions of principal and
interest with respect to the international global note will be
credited, in the specified currency, to the extent received by
Euroclear or Clearstream, Luxembourg, to the cash accounts of
Euroclear or Clearstream, Luxembourg customers in accordance
with the relevant systems rules and procedures.
S-8
Euroclear, Clearstream, Luxembourg and DTC
arrangements. So long as DTC or its nominee or
Euroclear, Clearstream, Luxembourg, or their nominee or their
common depositary is the registered holder of the global notes,
DTC, Euroclear, Clearstream, Luxembourg or such nominee, as the
case may be, will be considered the sole owner or holder of the
notes represented by such global notes for all purposes under
the Notes. Payments of principal, interest and additional
amounts, if any, in respect of the global notes will be made to
DTC, Euroclear, Clearstream, Luxembourg or such nominee, as the
registered holder thereof. Neither we nor any agent, underwriter
or affiliate or any person by whom any of the above is
controlled (as such term is defined in the Securities Act) will
have any responsibility or liability for any records relating to
or payments made on account of beneficial ownership interests in
the global notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The holding of book-entry interests in the global notes through
Euroclear, Clearstream, Luxembourg and DTC will be reflected in
the book-entry accounts of each such institution. As necessary,
the registrar will adjust the amounts of the global notes on the
register for the accounts of the nominees for the respective
clearing systems.
Secondary Market Trading. The following provisions
will apply to trading in the secondary market:
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Trading between Euroclear and/or Clearstream, Luxembourg
Participants. Secondary market sales of book-entry
interests in the international global note to purchasers of
book-entry interests in the international global note will be
conducted in accordance with the normal rules and operating
procedures of Euroclear and Clearstream, Luxembourg and will be
settled using the conventional procedures applicable to
Eurobonds. |
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Trading between DTC participants. Secondary market
sales of book-entry interests in the DTC notes between DTC
participants will occur in the ordinary way in accordance with
DTC rules and will be settled using the procedures applicable to
United States corporate debt obligations if payment is effected
in United States dollars, or free of payment if payment is not
effected in United States dollars. Where payment is not effected
in Untied States dollars, separate payment arrangements outside
DTC are required to be made between DTC participants. |
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Trading between DTC seller and Euroclear/ Clearstream,
Luxembourg purchaser. When book-entry interests in notes
are to be transferred from the account of a DTC participant
holding a beneficial interest in a DTC global note to the
account of a Euroclear or Clearstream, Luxembourg accountholder
wishing to purchase a beneficial interest in an international
global note, the DTC participant will deliver instructions for
delivery to the relevant Euroclear or Clearstream, Luxembourg
accountholder to DTC by 12:00 noon, New York City time, on the
settlement date. Separate payment arrangements are required to
be made between the DTC participant and the relevant Euroclear
or Clearstream, Luxembourg accountholder. On the settlement
date, the custodian will instruct the registrar to
(1) decrease the amount of notes registered in the name of
Cede & Co. and evidenced by the DTC global note and
(2) increase the amount of notes registered in the name of
the nominee of the common depositary for Euroclear and
Clearstream, Luxembourg and evidenced by the international
global note. Book- entry interests will be delivered free of
payment to Euroclear or Clearstream, Luxembourg for credit to
the relevant accountholder on the first business day following
the settlement date. |
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Trading between Euroclear/ Clearstream, Luxembourg seller
and DTC purchaser. When book-entry interest in the notes
are to be transferred from the account of a Euroclear or
Clearstream, Luxembourg accountholder to the account of a DTC
participant wishing to purchase a beneficial interest in the DTC
global note, the Euroclear or Clearstream, Luxembourg
participant must send to Euroclear or Clearstream, Luxembourg,
delivery free of payment instructions within its established
deadline one business day prior to the settlement date.
Euroclear or Clearstream, Luxembourg will in turn transmit
appropriate instructions to the common depositary for Euroclear
and Clearstream, Luxembourg and the registrar to arrange
delivery to the DTC participant on the settlement date. Separate
payment arrangements are required to be made between the DTC
participant and the relevant Euroclear and Clearstream,
Luxembourg accountholder, as the case may be. On the |
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settlement date, the common depositary for Euroclear and
Clearstream, Luxembourg will (1) transmit appropriate
instructions to the custodian who will in turn deliver such
book-entry interests in the notes free of payment to the
relevant account of the DTC participant and (2) instruct
the registrar to decrease the amount of notes registered in the
name of the nominee of the common depositary for Euroclear and
Clearstream, Luxembourg evidenced by the international global
note, and to increase the amount of Notes registered in the name
of Cede & Co evidenced by the DTC global note. |
Denominations. Notes initially issued in
book-entry form will have minimum denominations of $1,000 and
notes issued in certificated form will have minimum
denominations of $100,000, in each case increased in multiples
of $1,000, unless otherwise specified in the applicable pricing
supplement. In the limited circumstances that certificated notes
are issued in replacement for book-entry-notes, such
certificated notes will also have denominations of $1,000. Notes
that are to be listed on, or admitted to trading on or by, one
or more stock exchange(s), competent authority(ies) and/or
market(s) for the purposes of the European Unions
Directive 2003/71/EC will be issued in minimum denominations
of 1,000 or
its equivalent in other currencies. The authorized denominations
of notes denominated in a foreign or composite currency will be
described in the pricing supplement. DTC currently limits the
maximum size of any single global note to $500,000,000. Any
notes (including notes denominated in Sterling) issued having a
maturity of less than one year will, if the proceeds of issue of
such notes are to be accepted by us in the United Kingdom,
constitute deposits for the purposes of the prohibition on
accepting deposits contained in Section 19 of the United
Kingdoms Financial Services and Markets Act 2000 (the
FSMA) unless they are issued (a) to a limited
class of professional investors and have a minimum denomination
of £100,000 (or its equivalent in another currency) or
(b) are issued in other circumstances which do not
constitute a contravention of Section 19 of the FSMA by us.
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Registration and Transfer of Notes |
Book-entry notes. If you transfer your note while
it is in book-entry form, the transfer will be reflected on the
computerized system at DTC or, in the case of
non-U.S. dollar denominated notes, Euroclear and
Clearstream, Luxembourg. Your broker/ dealer, bank, trust
company or other representative will arrange for the transfer to
be reflected on the applicable clearing systems records.
Certificated notes. In addition to acting as
trustee under the Indenture, JPMorgan Chase also acts as our
registrar for notes issued in certificated form. You may go to
JPMorgan Chases office at 4 New York Plaza,
1st Floor, GIS Unit Trust Window-ITS Operations, New
York, New York 10004 or, in the case of notes to be listed on,
or admitted to trading on or by, one or more stock exchange(s),
competent authority(ies) and/or market(s) for the purposes of
the European Unions Directive 2003/71/EC, to such other
place as we may from time to time specify for such purposes in
relation to any notes, if you want to:
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register the transfer of any certificated note; |
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exchange certificated notes for notes of different denominations; |
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deliver payment instructions; |
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obtain a new note to replace a note that has been lost or
destroyed (you may be required to provide a document to JPMorgan
Chase and us agreeing to return the new certificate if the
missing one is found); or |
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present notes that have matured or been redeemed in exchange for
payment. |
Unless specified in the applicable pricing supplement, each note
will be deposited with, or on behalf of, DTC, as depository, and
registered in the name of Cede & Co. (DTCs
partnership nominee). Investors may elect to hold interests in
the notes through DTC (in the United States) or, if the notes
are eligible, through Clearstream Banking, société
anonyme (Clearstream, Luxembourg), or Euroclear Bank
S.A./N.V., as operator (the Euroclear Operator) of
the Euroclear System (Euroclear), if they are
participants in such
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systems or indirectly through organizations which are
participants in such systems. Clearstream, Luxembourg and the
Euroclear Operator will hold interests on behalf of their
participants through customers securities accounts in
Clearstream, Luxembourgs and the Euroclear Operators
names on the books of their respective depositaries, which in
turn will hold such interests in customers securities
accounts in the depositaries names on the books of the
DTC. Citibank, N.A. will act as depositary for Clearstream,
Luxembourg and JPMorgan Chase will act as depositary for the
Euroclear Operator (in such capacities, the
U.S. Depositaries).
If specified in the applicable pricing supplement, notes
denominated in currencies other than U.S. dollars may also
be issued in registered global form and registered in the name
of a nominee for, and deposited with, a common depositary for
Euroclear and Clearstream, Luxembourg.
Clearstream, Luxembourg advises that it is incorporated under
the laws of Luxembourg as a professional depositary.
Clearstream, Luxembourg holds securities for its participating
organizations (Clearstream Participants) and
facilitates the clearance and settlement of securities
transactions between Clearstream Participants through electronic
book-entry changes in accounts of Clearstream Participants,
thereby eliminating the need for physical movement of
certificates. Clearstream, Luxembourg provides to Clearstream
Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally
traded securities and securities lending and borrowing.
Clearstream, Luxembourg interfaces with domestic markets in
several countries. As a professional depositary, Clearstream,
Luxembourg is subject to regulation by the Luxembourg Monetary
Institute. Clearstream Participants are recognized financial
institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the
underwriters named in this prospectus supplement. Indirect
access to Clearstream, Luxembourg is also available to others,
such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Clearstream
Participant either directly or indirectly.
Distributions with respect to the notes held beneficially
through Clearstream, Luxembourg will be credited to cash
accounts of Clearstream Participants in accordance with its
rules and procedures, to the extent received by the
U.S. Depositary for Clearstream, Luxembourg.
The Euroclear Operator advises that Euroclear was created in
1968 to hold securities for participants of Euroclear
(Euroclear 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 includes various other services, including
securities lending and borrowing and interfaces with domestic
markets in several countries. Euroclear is operated by the
Euroclear Operator under contract with Euro-clear 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
underwriters named in this prospectus supplement. Indirect
access to Euroclear is also available to other firms 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
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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 with respect to notes held beneficially through
Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Terms and Conditions, to the
extent received by the U.S. Depositary for Euroclear.
Paying Agents. JPMorgan Chase and J.P. Morgan
Bank Luxembourg S.A., act as our paying agents and will make all
payments on the notes on our behalf.
For so long as the notes of any tranche are listed on, or
admitted to trading on or by, one or more stock exchange(s),
competent authority(ies) and/or market(s) for the purposes of
the European Unions Directive 2003/71/EC, we will at all
times maintain a paying agent and a transfer agent in Luxembourg
and if European Council Directive 2003/48/EC or any Directive
implementing the conclusions of the ECOFIN Council meeting of
26-27 November 2000 is brought in force, we will ensure
that we maintain a paying agent in a Member State of the
European Union that will not be obliged to withhold or deduct
tax from payment in respect of the notes pursuant to any such
Directive or law.
Book-entry notes. JPMorgan Chase will make
payments of principal and interest on book-entry notes to the
account of DTCs nominee by wire transfer of immediately
available funds. Neither we nor JPMorgan Chase will make any
payments to owners of beneficial interests in book-entry notes.
Instead, DTC will credit the funds to which you are entitled to
the account of the broker/ dealer, bank, trust company or other
participant of DTC through which you hold your note. That
participant, in turn, will credit these funds to your account
(or the account of any other intermediary through which you hold
your note).
We understand that DTCs current practice is to credit
interest payments (including interest payable at Maturity) and
principal payments in immediately available funds. These
payments and credits will be made pursuant to the rules of DTC,
in accordance with any standing instructions you have with your
broker/ dealer, bank, trust company or other participant in DTC
through which you hold your notes and with customary practice in
the broker/ dealer industry. Neither we nor JPMorgan Chase will
be involved with, or responsible for, the movement of funds once
JPMorgan Chase has paid DTC.
Certificated notes. If you hold certificated
notes, payments of principal and interest due at Maturity or
earlier redemption will be paid by wire transfer of immediately
available funds after you present the matured or redeemed note
at JPMorgan Chases office (the address is given above) or
in the case of notes to be listed on, or admitted to trading on
or by, one or more stock exchange(s), competent authority(ies)
and/or market(s) for the purposes of the European Unions
Directive 2003/71/EC, at such other place as we may from time to
time specify for such purposes in relation to any notes.
Interest payable at any other time will be paid by check mailed
to your address as it appears in JPMorgan Chases records.
If you own $5,000,000 or more of notes having the same terms and
conditions, we will pay you interest prior to Maturity by wire
transfer of immediately available funds if you give the
appropriate instructions to JPMorgan Chase at least 10 calendar
days before the applicable interest payment date.
Special payment provisions for notes denominated in a
foreign currency. Purchasers of notes denominated in a
foreign currency must pay for their notes in that currency. If
you prefer to pay in U.S. dollars, the agents will convert
U.S. dollars into the foreign currency on your behalf to
enable you to make payment in that currency. You must notify the
agents that you would like them to provide this service for you
at least three Business Days before the date of delivery of the
note. These services are available only in connection with the
initial distribution of notes denominated in a foreign currency.
Except as described below, regardless of whether the notes are
in book-entry or certificated form, all payments of principal
and interest on foreign currency notes (other than dual currency
notes) will be made in U.S. dollars based on the Noon
Buying Rate. JPMorgan Chase will convert these U.S. dollar
payments into the currency of the notes on your behalf if you
request the conversion at least ten calendar days before the
applicable payment date.
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Any currency conversion will be based upon a firm bid quotation
in New York City received by JPMorgan Chase at approximately
11:00 a.m., Eastern Time, on the second Business Day
preceding the applicable payment date from a recognized foreign
exchange dealer (which may be JPMorgan Chase). If JPMorgan Chase
cannot obtain a bid quotation for the conversion of
U.S. dollars into the relevant foreign currency, then
payments on the note will be made in U.S. dollars.
If you request an interest payment in a foreign currency, or, in
the case of a dual currency note, interest payments are to be
made in a foreign currency the payment will be paid by check
mailed to your address as it appears in JPMorgan Chases
records. If you request that the principal payment on your note,
including any interest payable at Maturity, be in a foreign
currency, or, in the case of a dual currency note, the principal
payment, including any interest payable at Maturity, is to be
made in a foreign currency, such payment will be paid by check
after you present the matured or redeemed note at JPMorgan
Chases office (the address is given above) or in the case
of notes to be listed on, or admitted to trading on or by, one
or more stock exchange(s), competent authority(ies) and/or
market(s) for the purposes of the European Unions
Directive 2003/71/EC, at such other place as we may from time to
time specify for such purposes in relation to any notes. Checks
in foreign currencies will be drawn from banks located outside
the U.S. If you hold $1,000,000 or more of notes
denominated in a foreign currency having the same terms and
conditions, you can request that JPMorgan Chase make payments in
the foreign currency by wire transfer. You must request wire
transfers no later than the record date for interest payments
and, in the case of payments of principal, no later than fifteen
calendar days prior to Maturity. Foreign currency wire transfers
must be made to banks located outside the U.S.
DTC will not accept foreign currency payments. You may elect to
receive foreign currency payments in respect of book-entry notes
by notifying your broker/ dealer, bank, trust company or other
participant in DTC through which you hold notes at least 15
calendar days prior to the payment date that you have elected to
receive all or a portion of the foreign currency payment in that
foreign currency and by providing your broker/ dealer, bank,
trust company or other participant in DTC (a DTC
Participant) with wire transfer instructions to an account
maintained in that foreign currency. The DTC participant in turn
will notify DTC of your election and wire transfer instructions
and DTC will pass those on to JPMorgan Chase. If JPMorgan Chase
receives those instructions from DTC in time, you will receive
payment in the foreign currency, after deduction of JPMorgan
Chases currency conversion and other costs. Otherwise, you
will receive payment in U.S. dollars through DTC.
You will be responsible for the costs of any currency conversion
effected by JPMorgan Chase on your behalf.
In certain circumstances we may offer notes denominated in a
foreign currency that are registered in the name of a nominee
for, and deposited with, a common depositary for Euroclear and
Clearstream, Luxembourg. In these circumstances and without
having to make a request therefor, you will be entitled to
receive payments of interest or principal in the relevant
foreign currency. Payments of principal and interest will be
made to the common depositary or its nominee for credit to the
accounts of participants in Euroclear and Clearstream,
Luxembourg in accordance with the normal procedures applicable
to Euroclear and Clearstream, Luxembourg, as described above.
Payments of interest on notes are generally payable to the
person in whose name the note is registered at the close of
business on the record date before each interest payment date.
However, interest will be payable at Maturity, redemption or
repayment to the person to whom principal is payable. The first
interest payment on any note originally issued between a record
date and an interest payment date or on an interest payment date
will be made on the interest payment date after the next record
date. The record date for any interest payment date for a
floating rate note will be the date (whether or not a Business
Day) 15 calendar days immediately before the interest payment
date, and for a fixed rate note will be the last day of February
or August (whether or not a Business Day) immediately before the
interest payment date or Maturity, unless otherwise specified in
the applicable pricing supplement.
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Optional Redemption or Repayment. We may issue
notes that permit us to redeem them prior to their Maturity
(calls) or that permit you to require us to repay
them prior to their Maturity (puts). Any such
redemption or repayment provisions, including the date(s) on
which the call or put may occur and whether redemptions or
repayments may be made in whole or in part, will be described in
the pricing supplement relating to the specific notes.
If we are permitted to call any notes, we will give notice of
redemption to you (or the entity that is the registered holder
of your notes) by mail at least 30 calendar days and not more
than 60 calendar days prior to the date set for redemption. In
the case of notes listed on the Luxembourg Stock Exchange, we
will also notify you and the Luxembourg Stock Exchange in the
manner specified under Notices herein.
If you are permitted to put any notes, you must notify JPMorgan
Chase at least 30 calendar days and not more than 60 calendar
days prior to the date set for repayment. For any note to be
repaid, JPMorgan Chase must receive (i) in the case of a
certificated note, the note with the attached Option to
Elect Repayment form completed, or a letter from a broker/
dealer, bank or trust company notifying JPMorgan Chase of your
intent to elect repayment of your notes and guaranteeing that
you will deliver the note and the attached Option to Elect
Repayment form not later than five Business Days after the
date set for repayment or (ii) in the case of a book-entry
note, instructions to such effect from the beneficial owner of
the note to JPMorgan Chase through DTC or the common depositary,
as the case may be.
Any notice of redemption delivered by you or by us will be
irrevocable.
Open-market Purchases. We may, at any time,
purchase notes at any price from holders of notes or in the open
market. If we purchase any of our notes, we may hold them,
resell them, subject to applicable law, or surrender them to
JPMorgan Chase for cancellation.
Subordinated Notes
The description of the subordinated debt securities under
Description of Debt SecuritiesSubordinated Debt
Securities in the accompanying prospectus is revised to
reflect the terms of the Subordinated Indenture to read in its
entirety as set forth below. As noted above, the subordination
provisions applicable to a particular series may differ from the
following and, if so, such difference will be set forth in the
applicable pricing supplement.
The Subordinated Notes will be unsecured. The
Subordinated Notes will be subordinate in right of payment to
all our senior indebtedness. (Section 14.01 of Subordinated
Indenture).
The Subordinated Indenture defines senior
indebtedness to mean:
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the principal of, premium, if any, and interest on all
indebtedness for money borrowed other than the Subordinated
Notes; |
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obligations arising from any guaranty, letter of credit or
similar credit enhancement (including, without limitation,
obligations arising from off balance sheet guarantees and direct
credit substitutes); |
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obligations associated with derivative products such as interest
rate and foreign exchange rate swaps, forward sales of interests
in commodities, and similar arrangements; and |
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obligations for purchased money; |
in each case, regardless of whether such indebtedness or
obligations are outstanding on the date of execution of the
Subordinated Indenture or thereafter created, assumed or
incurred, and any deferral, renewals or extensions thereof.
However, the term senior indebtedness will not
include:
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any accounts payable or other liability to trade creditors
(other than those obligations referenced in the second and third
bullet points under the definition of senior
indebtedness above) arising in the ordinary course of
business, including instruments evidencing those liabilities; |
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any indebtedness, guarantee or obligation of ours which is
expressly subordinate or junior in right of payment in any
respect to any other indebtedness, guarantee or obligation of
ours; or |
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any obligations with respect to any capital stock. |
We use the term indebtedness for money borrowed to
include, without limitation, any obligation of ours for the
repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes, or other written instruments, and any
deferred obligation for the payment of the purchase price of
property or assets.
There is no limitation on our ability to issue additional senior
indebtedness. The Senior Notes constitute senior indebtedness
under the Subordinated Indenture.
Under the Subordinated Indenture, no payment may be made by us
on the Subordinated Notes and no purchase, redemption or
retirement by us of any Subordinated Notes may be made in the
event:
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any senior indebtedness is not paid when due, or |
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the maturity of any senior indebtedness is accelerated as a
result of a default, in either case, unless the default has been
cured or waived and the acceleration has been rescinded or that
senior indebtedness has been paid in full. |
In addition, the right to accelerate the Subordinated Notes upon
an Event of Default is limited. Subordinated Notes can be
accelerated, unless the principal of such series of Subordinated
Notes shall have already become due and payable, only in the
event of an Event of Default arising from certain events
involving bankruptcy, insolvency or reorganization, and the
right to receive payment through an acceleration will not be
available for any other Events of Default including, without
limitation, failure to pay principal, interest or premium on the
Subordinated Notes. (Section 6.01 of the Subordinated
Indenture).
In the event we pay or distribute our assets to creditors upon a
total or partial liquidation, dissolution or bankruptcy,
reorganization, insolvency or receivership of us or our
property, the holders of senior indebtedness will be entitled to
receive payment in full of the senior indebtedness before the
holders of Subordinated Notes are entitled to receive any
payment and until the senior indebtedness is paid in full, any
payment or distribution to which holders of Subordinated Notes
would be entitled but for the subordination provisions of the
Subordinated Indenture will be made to holders of the senior
indebtedness (except that the holders of Subordinated Notes may
receive shares of stock and any debt securities that are
subordinated to Senior Indebtedness to at least the same extent
as the Subordinated Notes and do not provide for the payment of
principal prior to the maturity of all Senior Indebtedness).
(Section 14.02 of Subordinated Indenture).
If a distribution is made to holders of Subordinated Notes that,
due to the subordination provisions, should not have been made
to them, those holders of Subordinated Notes are required to
hold it in trust for the holders of senior indebtedness and pay
it over to them as their interests may appear.
(Section 14.04 of Subordinated Indenture).
As a result of the subordination provisions contained in the
subordinated indenture, in the event of default or insolvency,
our creditors who are holders of senior indebtedness are likely
to recover more, ratably, than the holders of Subordinated
Notes. It is important to keep this in mind if you decide to
hold our Subordinated Notes.
Subordinated Notes Events of Default
The description of the events of default with respect to
Subordinated Notes under Description of Debt
SecuritiesEvents of Default in the accompanying
prospectus is revised to reflect the terms of the Subordinated
Indenture to read in its entirety as set forth below. As noted
above, the events of default and related remedies may be
deleted, modified or added to for a particular series and, if
so, such changes will be set forth in the applicable pricing
supplement.
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The Subordinated Indenture defines an Event of
Default with respect to any series of Subordinated Notes
as any of the following:
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default in any payment of principal or premium, if any, on any
Subordinated Note of such series; |
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default for 30 days in payment of any interest, if any, on
any Subordinated Note of such series; |
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default in the making or satisfaction of any sinking fund
payment or analogous obligation on the Subordinated Notes of
such series; |
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certain events involving bankruptcy, insolvency or
reorganization; |
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any other event of default provided in the instrument
establishing such series of Subordinated Notes.
(Section 6.01). |
The Subordinated Indenture requires us to deliver to the Trustee
annually a written statement as to the presence or absence of
certain defaults under the terms thereof. (Section 4.05).
An Event of Default under one series of Subordinated Notes does
not necessarily constitute an Event of Default under any other
series of Subordinated Notes. The Subordinated Indenture
provides that the Trustee may withhold notice to the holders of
any series of Subordinated Notes issued thereunder of any
default if the Trustee considers it in the interest of such
noteholders to do so provided the Trustee may not withhold
notice of default in the payment of principal, premium, if any,
or interest, if any, on any of the Subordinated Notes of such
series or in the making of any sinking fund installment or
analogous obligation with respect to such series.
(Section 6.08).
The Subordinated Indenture provides that if an Event of Default
arising from certain events involving bankruptcy, insolvency or
reorganization occurs and is continuing with respect to a series
of Subordinated Notes, then the Trustee or the holders of not
less than 25% in aggregate principal amount of the outstanding
Subordinated Notes of such series may declare the principal, or
in the case of discounted Subordinated Notes, a portion of the
principal amount, of all such Subordinated Notes to be due and
payable immediately. Under certain conditions such declaration
may be annulled by the holders of a majority in principal amount
of such Subordinated Notes then outstanding. The holders of a
majority in aggregate principal amount of such Subordinated
Notes then outstanding may also waive on behalf of all holders
past defaults with respect to a particular series of
Subordinated Notes except, unless previously cured, a default in
payment of principal, premium, if any, or interest, if any, on
any of the Subordinated Notes of such series, or the payment of
any sinking fund installment or analogous obligation on the
Subordinated Notes of such series. (Sections 6.01 and 6.07).
In the Subordinated Indenture, we agree that in case of an Event
of Default pursuant to the first, second or third bullet points
above, then, upon demand of the Trustee, we will pay to the
Trustee, for the benefit of the holder of any Subordinated Note
in respect of which the Event of Default has occurred (or
holders of any series of Subordinated Notes in the case of the
third bullet point above) the whole amount that then shall have
become due and payable on any such Subordinated Note (or
Subordinated Notes of any such series in the case of the third
bullet point above) for principal, premium, if any, and
interest, if any, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such
interest is enforceable under applicable law) upon the overdue
installments of interest, if any, at the Overdue Rate (as
defined in the Subordinated Indenture) applicable to any such
Subordinated Note (or Subordinated Notes of any such series in
the case of the third bullet point above). In addition, we will
pay to the Trustee any further amount as shall be sufficient to
cover costs and expenses of collection and any further amounts
payable to the Trustee. (Section 6.02). The Trustee or a
holder may bring suit for the collection of amounts set forth in
this paragraph. The foregoing rights in respect of payment
defaults do not, however, permit the acceleration of amounts
scheduled to become due and payable, which remedy is limited as
noted above to certain events involving bankruptcy, insolvency
or reorganization.
Other than the duties of a trustee during a default, the Trustee
is not obligated to exercise any of its rights or powers under
the Subordinated Indenture at the request, order or direction of
any holders of Subordinated Notes of any series issued
thereunder unless such holders shall have offered to the Trustee
reasonable indemnity. (Sections 7.01 and 7.02). Subject to
such indemnification provision, the Subordinated Indenture
S-16
provides that the holders of a majority in aggregate principal
amount of the Subordinated Notes of any series issued thereunder
at the time outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee thereunder, or exercising any trust or
power conferred on such Trustee with respect to the Subordinated
Notes of such series. However, the Trustee may decline to act if
it determines that the proceedings so directed would be illegal
or involve it in any personal liability. (Section 6.07).
Interest and Interest Rates
The interest rates we will offer with respect to the notes may
differ depending on, among other things, the aggregate principal
amount of notes purchased in a single transaction.
Each fixed rate note will bear interest at the annual rate
specified in the note and in the applicable pricing supplement.
Interest on the fixed rate notes will be paid on March 15 and
September 15 of each year or as specified in the applicable
pricing supplement. Interest on fixed rate notes will be
computed and paid on the basis of a 360-day year of twelve
30-day months or as specified in the applicable pricing
supplement. In the event that any Interest Payment Date (as
defined below) or Maturity for any fixed rate note is not a
Business Day, principal and/or interest on such fixed rate note
will be paid on the next succeeding Business Day; however, we
will not pay any additional interest due to the delay in payment.
Each floating rate note will have an interest rate formula. The
formula may be based on:
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the CD Rate; |
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CMT Rate; |
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the Commercial Paper Rate; |
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the Eleventh District Cost of Funds Rate; |
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the Federal Funds Rate; |
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LIBOR; |
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the Prime Rate; |
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the Treasury Rate; or |
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another rate specified in the applicable pricing supplement. |
The applicable pricing supplement will also indicate the Spread
and/or Spread Multiplier, if any. In addition, any floating rate
note may have a maximum or minimum interest rate limitation.
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Date of Interest Rate Change |
The interest rate on each floating rate note may be reset daily,
weekly, monthly, quarterly, semiannually or annually (the day on
which such interest rate is reset is the Interest Reset
Date and the period from one Interest Reset Date to the
next Interest Reset Date is an Interest Reset
Period). Unless we state otherwise in the applicable
pricing supplement, the Interest Reset Dates will be:
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for floating rate notes that reset daily, each Business Day; |
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for floating rate notes (other than Treasury Rate notes) that
reset weekly, Wednesday of each week; |
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for Treasury Rate notes that reset weekly, Tuesday of each week; |
S-17
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for floating rate notes (other than Eleventh District Cost of
Funds Rate Notes) that reset monthly, the third Wednesday of
each month; |
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for Eleventh District Cost of Funds Rate Notes, all of which
reset monthly, the first calendar day of each month; |
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for floating rate notes that reset quarterly, the third
Wednesday of March, June, September and December of each year; |
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for floating rate notes that reset semiannually, the third
Wednesday of each of the two months specified in the pricing
supplement; and |
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for floating rate notes that reset annually, the third Wednesday
of the month specified in the pricing supplement. |
If an Interest Reset Date for any floating rate note falls on a
day that is not a Business Day, it will be postponed to the
following Business Day, except that, in the case of a LIBOR
note, if that Business Day is in the next calendar month, the
Interest Reset Date will be the immediately preceding Business
Day.
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How Interest Is Calculated |
We will appoint a calculation agent to calculate interest rates
on the floating rate notes. Unless we choose a different party
in the pricing supplement, the lead agent for an issue of notes
will be the calculation agent for those notes. Floating rate
notes will accrue interest from and including the original issue
date or the last date to which interest has been paid or
provided for, as the case may be, to but excluding the
applicable Interest Payment Date, as described below, or
Maturity, as the case may be.
Accrued interest on floating rate notes will be calculated by
multiplying the principal amount of such note (or, in the case
of an indexed note, unless otherwise specified in the pricing
supplement, the face amount of such indexed note) by an accrued
interest factor. The accrued interest factor will be computed by
adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. The
interest factor (expressed as a decimal calculated to seven
decimal places without rounding) for each day will be computed
by dividing the interest rate in effect on that day by 360, in
the case of CD Rate notes, Commercial Paper Rate notes, the
Eleventh District Cost of Funds Rate notes, Federal Funds rate
notes, LIBOR notes and Prime Rate notes, or by the actual number
of days in the year, in the case of Treasury Rate notes or CMT
Rate notes. For these calculations, the interest rate in effect
on any Interest Reset Date will be the new reset rate.
The calculation agent will round all percentages resulting from
any calculation of the rate of interest on a floating rate note,
if necessary, to the nearest 1/100,000 of 1% (.0000001), with
five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) would be rounded to
9.87655% (or .0987655)) and all currency amounts used in or
resulting from any calculation on floating rate notes will be
rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
The calculation agent will promptly notify JPMorgan Chase (and,
in the case of floating rate notes listed on, or admitted to
trading on or by, one or more stock exchange(s), competent
authority(ies) and/or market(s) for the purposes of the European
Unions Directive 2003/71/ EC, such other persons as we may
from time to time specify for such purposes in relation to any
notes) of each determination of the interest rate. The
calculation agent will also notify such persons of the interest
rate, the interest amount, the interest period and the interest
payment date related to each Interest Reset Date as soon as such
information is available. The paying agents will make such
information available to the holders of such notes and, in the
case of notes listed on, or admitted to trading on or by, one or
more stock exchange(s), competent authority(ies) and/or
market(s) for the purposes of the European Unions
Directive 2003/71/ EC, such stock exchange(s), competent
authority(ies) and/or market(s). JPMorgan Chase will, upon the
request of the holder of any floating rate note, provide the
interest rate then in effect and, if determined, the interest
rate which will become effective as a result of a determination
made with respect to the most recent Interest Determination Date
relating to such floating rate note.
S-18
So long as any floating rate notes are listed on an exchange and
the rules of such exchange so require, we will maintain a
calculation agent for such floating rate notes, and we will
notify the holders of such floating rate notes in the manner
specified under Notices herein in the event
that we appoint a calculation agent with respect to such
floating rate notes other than the calculation agent designated
as such in the applicable Pricing Supplement.
Unless we state otherwise in the applicable pricing supplement,
we will pay interest on floating rate notes as follows:
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(a) for 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 specified in
the pricing supplement; |
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(b) for notes that reset quarterly, on the third Wednesday
of March, June, September, and December of each year specified
in the pricing supplement; |
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(c) for notes that reset semiannually, on the third
Wednesday of each of two months of each year specified in the
pricing supplement; and |
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(d) for notes that reset annually, on the third Wednesday
of one month of each year specified in the pricing supplement. |
Each of the above dates is an Interest Payment Date.
We will also pay interest on all notes at Maturity.
If an Interest Payment Date (other than at Maturity) for any
floating rate note falls on a day that is not a Business Day, it
will be postponed to the following Business Day and interest
thereon will continue to accrue, except that, in the case of a
LIBOR note, if that Business Day would fall in the next calendar
month, the Interest Payment Date will be the immediately
preceding Business Day.
If the Maturity for a floating rate note falls on a day that is
not a Business Day, we will make the payment of principal and
interest on the next Business Day, without additional interest.
References below to information services include any successor
information services.
Each CMT Rate note will bear interest at a specified rate that
will be reset periodically based on the CMT Rate and any Spread
or Spread Multiplier.
CMT Rate means, with respect to any 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., under the column for
the specified Index Maturity for:
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(1) if the Designated CMT Telerate Page is 7051, the rate
for the Interest Determination Date; or |
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(2) if the Designated CMT Telerate Page is 7052, the weekly
or monthly average, as applicable, ended immediately preceding
the week or month, as applicable, in which the Interest
Determination Date occurs. |
The following procedures will apply if the rate cannot be set as
described above:
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(a) if we do not specify any page, the Designated CMT
Telerate Page will be 7052 for the most recent week. If that
rate is no longer displayed on the relevant page, or if it 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 specified Index Maturity as
published in the relevant H.15(519). |
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(b) If the 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 for that determination date
will be the Treasury constant maturity rate for the specified
Index Maturity (or other U.S. Treasury rate for such Index |
S-19
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Maturity for that Interest Determination Date) as may then be
published by either the Federal Reserve Board or the
U.S. 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). |
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(c) If that information is not provided by 3:00 p.m.,
New York City time, on the Calculation Date, then the CMT Rate
will be calculated as a yield to maturity, based on the average
of the secondary market closing bid side prices as of
approximately 3:30 p.m., New York City time, on that
Interest Determination Date reported, according to their written
records, by three leading primary U.S. government
securities dealers (each, a Reference Dealer) in The
City of New York selected by the calculation agent. These
dealers will be selected from five Reference Dealers using the
following procedures: |
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The calculation agent 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 specified Index
Maturity and a remaining term to maturity of not less than the
specified Index Maturity minus one year. |
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If two Treasury notes with an original maturity as described in
the preceding sentence have remaining terms to maturity equally
close to the specified Index Maturity, the quotes for the
Treasury Note with the shorter remaining term to maturity will
be used. |
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(d) If the calculation agent cannot obtain three Treasury
note quotations, the CMT Rate will be calculated as a yield to
maturity based on the average of the secondary market bid side
prices as of approximately 3:30 p.m., New York City time,
on that Interest Determination Date of three Reference Dealers
in The City of New York selected by the calculation agent 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 specified Index Maturity with a remaining term to
maturity closest to such Index Maturity and in an amount of at
least $100,000,000. If three or four (and not five) of the
Reference Dealers are providing quotes, then the CMT Rate will
be based on the average of the offer prices obtained, and
neither the highest nor the lowest of such quotes will be
eliminated. |
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(e) If fewer than three Reference Dealers are providing
quotes, the rate of interest on CMT Rate notes will be the same
as the rate of interest thereon in the prior interest period. |
Each CD Rate note will bear interest at a specified rate that
will be reset periodically based on the CD Rate and any Spread
and/or Spread Multiplier.
CD Rate means, with respect to any Interest
Determination Date, the rate on that Interest Determination Date
for negotiable certificates of deposit having the specified
Index Maturity 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:
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(a) If the rate is not published in H.15(519) prior to
3:00 p.m., New York City time, on the Calculation Date,
then the CD Rate will be the rate for negotiable certificates of
deposit having the specified Index Maturity as published in H.15
Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption
CDs (secondary market). |
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(b) If the rate is not yet published in H.15(519), H.15
Daily Update or another recognized electronic source by
3:00 p.m., New York City time, on the Calculation Date, the
CD Rate will be the average of the secondary market offered
rates, as of 10:00 a.m., New York City time, of three
leading nonbank dealers of negotiable U.S. dollar
certificates of deposit in The City of New York selected by |
S-20
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the calculation agent for negotiable certificates of deposit of
major money market banks with a remaining maturity closest to
the specified Index Maturity in a denomination of $5,000,000. |
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(c) If fewer than three dealers are providing quotes, the
rate of interest on the CD Rate note will be the same as the
rate of interest thereon in the prior interest period. |
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Commercial Paper Rate Notes |
Each Commercial Paper Rate note will bear interest at a
specified rate that will be reset periodically based on the
Commercial Paper Rate and any Spread and/or Spread Multiplier.
Commercial Paper Rate means, with respect to any
Interest Determination Date, the Money Market Yield of the rate
on that Interest Determination Date for commercial paper having
the specified Index Maturity as published in H.15(519) under the
heading Commercial Paper Nonfinancial.
The following procedures will apply if the rate cannot be set as
described above:
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(a) If the rate is not published in H.15(519) prior to
3:00 p.m., New York City time, on the Calculation Date,
then the Commercial Paper Rate will be the Money Market Yield of
the rate for commercial paper having the specified Index
Maturity as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying
such rate, under the caption Commercial Paper
Nonfinancial. |
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(b) If the rate is not published in H.15(519), H.15 Daily
Update or another recognized electronic source by
3:00 p.m., New York City time, on the Calculation Date, the
Commercial Paper Rate will be the Money Market Yield of the
average for the offered rates, as of 11:00 a.m., New York
City time, on that Interest Determination Date, of three leading
dealers of commercial paper in The City of New York selected by
the calculation agent for commercial paper having the specified
Index Maturity placed for an industrial issuer whose bond rating
is AA, or the equivalent, by a nationally recognized
rating agency. |
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(c) If fewer than three dealers are providing quotes, the
rate of interest on the Commercial Paper Rate note will be the
same as the rate of interest thereon in the prior interest
period. |
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Eleventh District Cost of Funds Rate Notes |
Each Eleventh District Cost of Funds Rate note will bear
interest at a specified rate that will be reset periodically
based on the Eleventh District Cost of Funds Rate and any Spread
and/or Spread Multiplier).
Eleventh District Cost of Funds Rate means, with
respect to any Interest Determination Date, the rate equal to
the monthly weighted average cost of funds for the calendar
month preceding such Interest Determination Date as set forth
under the caption 11th District on Telerate on
page 7058 (or such other page as is specified in the
applicable pricing supplement) as of 11:00 a.m.,
San Francisco time, on such Interest Determination Date. If
such rate does not so appear, the Eleventh District Cost of
Funds Rate shall be the FHLB Index for the calendar month
preceding the date of such announcement. If the Federal Home
Loan Bank of San Francisco fails to announce such rate
for the calendar month next preceding such Interest
Determination Date, then the rate of interest on the Eleventh
District Cost of Funds Rate notes will be the same as the rate
of interest thereon in the prior interest period.
Each Federal Funds Rate note will bear interest at a specified
rate that will be reset periodically based on the Federal Funds
Rate and any Spread and/or Spread Multiplier.
Federal Funds Rate means, with respect to any
Interest Determination Date, the rate with respect to specified
dates for Federal Funds published in H.15(519) prior to
11:00 a.m., New York City time, under the heading
Federal Funds Effective, as such rate is displayed
on Telerate Page 120.
S-21
The following procedures will apply if the rate cannot be set as
described above:
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(a) If the rate does not appear on Telerate Page 120
or is not published in H.15(519) prior to 11:00 a.m., New
York City time, on the Calculation Date, then the Federal Funds
Rate will be the rate with respect to such Interest
Determination Date as published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of
displaying such rate, under the caption Federal Funds
(Effective). |
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(b) If the rate does not appear on Telerate Page 120
or is not published in H.15(519), H.15 Daily Update or another
recognized electronic source by 3:00 p.m., New York City
time, on the Calculation Date, the Federal Funds Rate will be
the average of the rates, as of 11:00 a.m., New York City
time, on the Business Day following such Interest Determination
Date, for the last transaction in overnight federal funds
arranged by three leading brokers of federal funds transactions
in The City of New York selected by the calculation agent. |
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(c) If fewer than three brokers are providing quotes, the
rate of interest on the Federal Funds Rate notes will be the
same as the rate of interest thereon in the prior interest
period. |
Each LIBOR note will bear interest at a specified rate that will
be reset periodically based on LIBOR and any Spread and/or
Spread Multiplier.
The calculation agent will determine LIBOR on each Interest
Determination Date as follows:
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(a) |
With respect to any Interest Determination Date, LIBOR will be
generally determined as either: |
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(1) If LIBOR Reuters is specified in the
pricing supplement, the average of the offered rates for
deposits in the Designated LIBOR Currency having the specified
Index Maturity beginning on the second London Business Day
immediately after the Interest Determination Date, that appear
on the Designated LIBOR page as of 11:00 a.m., London time,
on that Interest Determination Date, if at least two offered
rates appear on the Designated LIBOR Page; or |
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(2) If LIBOR Telerate is specified in the pricing
supplement, or if neither LIBOR Reuters nor
LIBOR Telerate is specified in the applicable
pricing supplement, the rate for deposits in the Designated
LIBOR Currency having the specified Index Maturity beginning on
the second London Business Day immediately after such date (or,
if pounds sterling is the Designated LIBOR Currency, beginning
on such date or, if euro is the Designated LIBOR Currency,
beginning on the second TARGET Settlement Day immediately after
such date), that appears on the Designated LIBOR Page as of
11:00 a.m., London time, on that Interest Determination
Date. |
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Where (1) above applies, if fewer than two offered rates
appear on the Designated LIBOR Page, or, where (2) above
applies, if no rate appears on the Designated LIBOR Page, LIBOR
for that Interest Determination Date will be determined based on
the rates on that Interest Determination Date at approximately
11:00 a.m., London time, at which deposits on that date in
the Designated LIBOR Currency for the period of the specified
Index Maturity are offered to prime banks in the London
interbank market by four major banks in that market selected by
the calculation agent and in a principal amount of not less than
$1,000,000 (or its foreign currency equivalent) that in the
calculation agents judgment is representative for a single
transaction in the Designated LIBOR Currency in such market at
such time (a Representative Amount). The offered
rates must begin on the second London Business Day immediately
after the Interest Determination Date (or if pounds sterling is
the Designated LIBOR Currency, commencing on such Interest
Determination Date or, if euro is the Designated LIBOR Currency,
beginning on the second TARGET Settlement Day immediately after
such date). |
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The calculation agent will request the principal London office
of each of these banks to quote its rate. If the calculation
agent receives at least two quotations, LIBOR will be the
average of those quotations. |
S-22
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(b) If the calculation agent receives fewer than two
quotations, LIBOR will be the average of the rates quoted at
approximately 11:00 a.m., New York City time, on the
Interest Determination Date by three major banks in the
Principal Financial Center selected by the calculation agent.
The rates will be for loans in the Designated LIBOR Currency to
leading European banks having the specified Index Maturity
beginning on the second London Business Day after that date (or,
if pounds sterling is the Designated LIBOR Currency, commencing
on such date or, if euro is the Designated LIBOR Currency,
beginning on the second TARGET Settlement Day immediately after
such date) and in a Representative Amount. |
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(c) If fewer than three banks provide quotes, the rate of
interest on the LIBOR notes will be the same as the rate of
interest thereon in the prior interest period. |
Each Prime Rate note will bear interest at a specified rate that
will be reset periodically based on the Prime Rate and any
Spread and/or Spread Multiplier.
Prime Rate means, with respect to any Interest
Determination Date, the rate set forth on that Interest
Determination Date in H.15(519) under the heading Bank
Prime Loan.
The following procedures will apply if the rate cannot be set as
described above:
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(a) If the rate is not published in H.15(519) by
3:00 p.m., New York City time, on the Calculation Date,
then the Prime Rate will be the rate as published on such
Interest Determination Date in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying
such rate under the caption Bank Prime Loan. |
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(b) If the rate is not published in H.15(519), H.15 Daily
Update or another recognized electronic source by
3:00 p.m., New York City time, on the Calculation Date,
then the Prime Rate will be the average (rounded upwards, if
necessary, to the next higher one-hundred thousandth of a
percentage point) of the rates publicly announced by each bank
on the Reuters Screen USPRIME1 Page as its prime rate or base
lending rate for that Interest Determination Date. |
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(c) If fewer than four, but more than one, rates appear on
the Reuters Screen USPRIME1 Page, the Prime Rate will be the
average of the prime rates (quoted on the basis of the actual
number of days in the year divided by a 360-day year) as of the
close of business on the Interest Determination Date by four
major money center banks in The City of New York selected by the
calculation agent. |
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(d) If fewer than two rates appear, the Prime Rate will be
determined based on the rates furnished in The City of New York
by the appropriate number of 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 million and being subject to supervision or
examination by a Federal or State authority, as selected by the
calculation agent. |
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(e) If no banks are providing quotes, the rate of interest
on the Prime Rate notes will be the same as the rate of interest
thereon for the prior interest period. |
Each Treasury Rate note will bear interest at a specified rate
that will be reset periodically based on the Treasury Rate and
any Spread and/or Spread Multiplier.
Treasury Rate means, with respect to any Interest
Determination Date, the rate from the most recent auction of
direct obligations of the United States (Treasury
bills) having the specified Index Maturity as it appears
under the caption Investment Rate on Telerate
Page 56 or Telerate Page 57 (or any other pages as may
replace such pages on such service).
S-23
The following procedures will apply if the rate cannot be set as
described above:
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(a) If, by 3:00 p.m., New York City time, on the
Calculation Date for an Interest Reset Period, Treasury bills of
the specified Index Maturity have been auctioned on an Interest
Determination Date during that Interest Reset Period, but the
rate for such Interest Determination Date does not appear on
either Telerate Page 56 or Telerate Page 57, the rate
will be the Bond Equivalent Yield on such Interest Determination
Date of the rate for Treasury bills of the specified Index
Maturity as set forth in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying
such rate, for that day under the caption
U.S. Government securities/ Treasury bills/ Auction
high. |
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(b) If the rate cannot be set as described in
(a) above by 3:00 p.m., New York City time, on the
Calculation Date, then the rate will be the Bond Equivalent
Yield on such Interest Determination Date of the auction rate
for Treasury bills of the specified Index Maturity as announced
by the U.S. Department of the Treasury. |
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(c) If the rate cannot be set as described in
(b) above by 3:00 p.m., New York City time, on the
Calculation Date, then the rate will be the Bond Equivalent
Yield, on such Interest Determination Date, of the rate for
Treasury bills of the specified Index Maturity as set forth in
H.15(519), under the caption U.S. Government
securities/ Treasury bills/ Secondary Market. |
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(d) If the rate cannot be set as described in
(c) above by 3 p.m., New York City time, on the
Calculation Date, then the rate will be the Bond Equivalent
Yield, on such Interest Determination Date, of the rate for
Treasury bills of the specified Index Maturity as set forth in
H.15 Daily Update, or such other recognized electronic source
used for the purpose of displaying such rate, under the caption
U.S. Government securities/ Treasury bills/ Secondary
Market. |
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(e) If the rate cannot be set as described in
(d) above by 3 p.m., New York City time, on the
Calculation Date, then the rate will be the average of the
secondary market bid rates as of approximately 3:30 p.m.,
New York City time, on the Interest Determination Date, of three
leading primary U.S. government securities dealers in The
City of New York selected by the calculation agent for the issue
of Treasury bills with the remaining maturity closest to the
specified Index Maturity. |
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(f) If the rate cannot be set as described in
(e) above, then the rate of interest on the Treasury Rate
notes will be the same as the rate of interest thereon in the
prior interest period. |
Indexed Notes
We may offer indexed notes under which principal or interest is
determined by reference to an index related to:
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(a) |
the rate of exchange between the specified currency for such
note and the Designated LIBOR Currency; |
|
|
(b) |
the difference in the price of a specified commodity on
specified dates; |
|
|
(c) |
the difference in the level of a specified stock index, which
may be based on U.S. or foreign stocks, on specified
dates; or |
|
|
(d) |
any other objective price or economic measures described in the
pricing supplement. |
We will describe the manner of determining principal and
interest amounts in the pricing supplement. We will also include
historical and other information regarding the index or indexes
and information concerning tax consequences to holders of
indexed notes.
Interest payable on an indexed note will be based on the face
amount of the note. The pricing supplement will describe whether
the principal payable upon redemption or repayment prior to
Maturity will be the face amount, the index principal amount at
the time of redemption or repayment or some other amount.
S-24
Dual Currency Notes
We may offer dual currency notes under which we have the option
to make all payments in a currency that is different than the
currency in which the notes were issued. We can only exercise
this option with respect to all dual currency notes issued on
the same day with the same terms.
The pricing supplement will include related tax information and
will specify the date on which we may exercise our option.
If we elect to exercise our option to make scheduled payments in
the alternate currency, we will notify you by mail within two
Business Days. We will not be able to withdraw such notice once
it has been mailed to you.
Because of fluctuating exchange rates, you may receive less in
interest and/or principal in the alternate currency than you
would if we made payments in the notes original currency.
For further information regarding certain risks inherent in
notes denominated in currencies other than U.S. dollars,
see Risks of Foreign Currency Notes and Indexed
Notes above.
Renewable Notes
We may issue renewable notes which will bear interest at a
specified rate that will be reset based on a base rate and any
Spread and/or Spread Multiplier.
The Maturity of a renewable note will be automatically extended
for a twelve month period on each maturity date unless you elect
to terminate the automatic extension. To terminate the automatic
extension of your renewable note, you must notify JPMorgan Chase
within the time frame specified in the pricing supplement. You
may choose to maintain the automatic extension provision for a
portion of your note so long as that portion equals at least
$100,000 (or its foreign currency equivalent). The Maturity of
the renewable notes cannot be extended beyond the final maturity
date specified in the pricing supplement. If you elect to
terminate the automatic extension of any portion of your
renewable note, you will receive payment of principal on that
portion on an interest payment date falling approximately six
months after the date on which the note was scheduled to be
extended.
You may revoke your election to terminate the automatic
extension of any portion of your renewable note if such portion
equals at least $100,000 (or its foreign currency equivalent).
To revoke your election you must notify JPMorgan Chase prior to
the fifteenth calendar day before the portion is scheduled to
mature. An election to terminate the automatic extension of a
renewable note will be binding on any subsequent holder of the
note unless it is properly revoked.
We may elect to redeem the total amount or a portion of a
renewable note at a redemption price of 100% of its principal
amount plus accrued interest. If we decide to redeem a renewable
note we will notify you by first class mail at least 30 calendar
days but, not more than 60 calendar days prior to the redemption
date. In the case of notes listed on, or admitted to trading on
or by, one or more stock exchange(s), competent authority(ies)
and/or market(s) for the purposes of the European Unions
Directive 2003/71/ EC, we will also notify you in the
manner specified under Notices herein.
We may also issue renewable notes under which the Spread and/or
Spread Multiplier is reset by a remarketing agent using
remarketing procedures included in the pricing supplement.
Extendible Notes
We may issue extendible fixed rate notes under which we have the
option to extend the notes stated maturity date for one or
more whole years up to a date specified in the pricing
supplement. If we elect to extend the notes, we must notify
JPMorgan Chase at least 45 calendar days and not more than 60
calendar days prior to the notes original stated maturity
date. JPMorgan Chase will notify you of our decision to extend
the Maturity of the notes by first class mail. In the case of
notes listed on, or admitted to trading on or by, one or more
stock exchange(s), competent authority(ies) and/or market(s) for
the purposes of the European Unions Directive 2003/71/ EC,
we will also notify you in the manner specified under
Notices
S-25
herein. The notice will specify the notes new Maturity
date, the interest rate applicable to the extension period and
any applicable redemption provisions.
We can increase the interest rate for the extension period by
notifying JPMorgan Chase at any time prior to 10:00 a.m.,
New York City time, on the twentieth calendar day before the
extended notes are scheduled to mature. JPMorgan Chase will send
you notice of the increase in interest rate in a manner agreed
upon by us and JPMorgan Chase. We cannot revoke our election to
increase the interest rate.
If we elect to extend the Maturity of an extendible note, you
have the option to require us to repay such note on the Maturity
date then in effect at a price equal to the principal amount of
the note plus any accrued interest to such date. To exercise
this option you must notify JPMorgan Chase at least 25 calendar
days but not more than 60 calendar days prior to the date the
notes are scheduled to mature. You may notify JPMorgan Chase
either by delivering to JPMorgan Chase the note with the
attached Option to Elect Repayment form completed,
or by delivering to JPMorgan Chase a letter from a broker/
dealer, bank or trust company notifying JPMorgan Chase of your
intent to redeem your notes and guaranteeing that you will
deliver the note and the attached Option to Elect
Repayment form not later than five Business Days after the
date set for redemption. You may revoke your election to be
repaid at any time before 3:00 p.m., New York City time, on
the twentieth calendar day prior to the date the notes are
scheduled to mature.
Amortizing Notes
We may offer amortizing notes. Unless otherwise specified in the
applicable Pricing Supplement, interest on an 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 thereon and then to the reduction of
the unpaid principal amount. Further information about
amortizing notes including an amortization schedule will be
included in the pricing supplement.
Original Issue Discount Notes
We may issue Original Issue Discount Notes. Original Issue
Discount Notes are notes issued at a discount from the principal
amount payable at Maturity. Certain additional considerations
relating to Original Issue Discount Notes may be described in
the pricing supplement.
Other Provisions, Addenda
We may modify any provision of a note by using the section
marked Other Provisions or by providing an addendum
to the note.
Euro Redenomination
If notes are denominated in a foreign currency which may be
replaced by euro, we may include provisions in the pricing
supplement allowing for the redenomination of the notes from the
original currency to euro.
Notices
For so long as any tranche of notes is listed on, or admitted to
trading on or by, one or more stock exchange(s), competent
authority(ies) and/or market(s) for the purposes of the European
Unions Directive 2003/71/ EC, all notices regarding such
notes shall be published in accordance with the rules and
regulations of any such stock exchange(s), competent
authority(ies) and/or market(s).
Until such time as any certificated notes are issued in relation
to a tranche of notes that is represented by global registered
notes deposited with, or on behalf of, DTC, as depositary, and
registered in the name of Cede & Co. or registered in
the name of a nominee for, and deposited with, a common
depositary for Euroclear and Clearstream, Luxembourg, (and
provided that, if such notes are also listed on, or admitted to
trading on or by, one or more stock exchange(s), competent
authority(ies) and/or market(s) for the purposes of the European
Unions Directive 2003/71/ EC, the rules of any such stock
exchange(s), competent authority(ies) and/or market(s) so
permit) we may instead deliver the relevant notice to Euroclear
and Clearstream, Luxembourg for communication by them to
investors. Any such notice shall be
S-26
deemed to have been given to the relevant investors on the
seventh day after the day on which such notice was given to
Euroclear and Clearstream, Luxembourg.
So long as any tranche of notes that is deposited with, or on
behalf of, DTC, as depositary, and registered in the name of
Cede & Co. or represented by global registered notes
registered in the name of a nominee for, and deposited with, a
common depositary for Euroclear and Clearstream, Luxembourg,
notices to be given by investors to us (for example, in relation
to the exercise of any option to put notes back to us) may be
given by the relevant investor to JPMorgan Chase via DTC,
Euroclear and/or Clearstream, Luxembourg, as the case may be, in
such manner as JPMorgan Chase and DTC, Euroclear and/or
Clearstream, Luxembourg, as the case may be, may approve for
this purpose.
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
DTCs rules and will be settled in immediately available
funds using DTCs Same-Day Funds Settlement System.
Secondary market trading between Clearstream 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.
Cross-market transfers between persons holding directly or
indirectly through DTC on the one hand, and directly or
indirectly through Clearstream Participants or Euroclear
Participants, on the other, will be effected in DTC in
accordance with DTCs 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
Participants and Euroclear Participants may not deliver
instructions directly to DTC.
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 credited
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 Euroclear Participants or
Clearstream Participants on such business day. Cash received in
Clearstream, Luxembourg or Euroclear as a result of sales of
notes by or through a Clearstream Participant or a Euroclear
Participant to a DTC Participant will be received with value on
the DTC settlement date but will be available in the relevant
Clearstream, Luxembourg or Euroclear cash account only as of the
business day following settlement in the DTC.
Although the DTC, Clearstream, Luxembourg and the Euroclear
Operator have agreed to the foregoing procedures in order to
facilitate transfers of notes among participants in DTC,
Clearstream, Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform such procedures and
such procedures may be discontinued at any time.
If the applicable pricing supplement relating to an issue of
non-U.S. dollar denominated notes specifies that such notes
are to be issued in the form of both a DTC global note and an
international global note, certain alternative clearance and
settlement procedures will apply. Such alternative procedures
are described above under Description of Notes
General Special Provisions Relating to Certain Foreign
Currency Notes.
Because the purchaser determines the place of delivery, it is
important to establish at the time of trading of any notes where
both the purchasers and sellers accounts are located
to ensure that settlement can be made on the desired value date.
S-27
|
|
|
Trading between DTC Participants |
Secondary market sales of notes held in DTC between DTC
participants will occur in the ordinary way in accordance with
DTC rules and will be settled using the procedures applicable to
United States corporate debt obligations.
|
|
|
Trading between Euroclear and/or Clearstream Participants |
Secondary market sales of beneficial interests in the notes held
through Euroclear or Clearstream, Luxembourg to purchasers that
will hold beneficial interests through Euroclear or Clearstream,
Luxembourg will be conducted in accordance with the normal rules
and operating procedures of Euroclear and Clearstream,
Luxembourg and will be settled using the procedures applicable
to conventional eurobonds.
|
|
|
Trading between DTC Seller and Euroclear/ Clearstream,
Luxembourg Purchaser |
When book-entry interests in notes are to be transferred from
the account of a DTC participant to the account of a Euroclear
or Clearstream, Luxembourg accountholder, the purchaser must
first send instructions to Euroclear or Clearstream, Luxembourg
through a participant at least one business day prior to the
settlement date. Euroclear or Clearstream, Luxembourg will then
instruct its depositary to receive the notes and make payment
for them. On the settlement date, the depositary will make
payment to the DTC participants account and the notes will
be credited to the depositarys account. After settlement
has been completed, DTC will credit the notes to the
U.S. Depositary for Euroclear or Clearstream, Luxembourg,
as the case may be. Euroclear or Clearstream, Luxembourg will
credit the notes, in accordance with its usual procedures, to
the participants account, and the participant will then
credit the purchasers account. These securities credits
will appear the next day (European time) after the settlement
date. The cash debit from the account of Euroclear or
Clearstream, Luxembourg will be back-valued to the value date
(which will be the preceding day if settlement occurs in New
York). If settlement is not completed on the intended value date
(i.e., the trade fails), the cash debit will instead be valued
at the actual settlement date. Since the settlement will occur
during New York business hours, a DTC participant selling an
interest in the notes can use its usual procedures for
transferring notes to the U.S. Depositary for Euroclear or
Clearstream, Luxembourg, as the case may be, for the benefit of
Euroclear Participants or Clearstream Participants. The DTC
seller will receive the sale proceeds on the settlement date.
Thus, to the DTC seller, a cross-market sale will settle no
differently than a trade between two DTC Participants.
|
|
|
Trading between a Euroclear or Clearstream, Luxembourg Seller
and a DTC Purchaser |
Due to time zone differences in their favor, Euroclear
Participants and Clearstream, Luxembourg participants can use
their usual procedures to transfer notes through the applicable
U.S. Depositary to a DTC participant. The seller must first
send instructions to Euroclear or Clearstream, Luxembourg
through a participant at least one business day prior to the
settlement date. Euroclear or Clearstream, Luxembourg will then
instruct its U.S. Depositary to credit the notes to the DTC
participants account and receive payment. The payment will
be credited in the account of the Euroclear or Clearstream,
Luxembourg participant on the following day, but the receipt of
the cash proceeds will be back-valued to the value date (which
will be the preceding day if settlement occurs in New York). If
settlement is not completed on the intended value date (i.e.,
the trade fails), the receipt of the cash proceeds will instead
be valued at the actual settlement date.
Although the foregoing sets out the procedures of Euroclear,
Clearstream, Luxembourg and DTC in order to facilitate the
transfers of interests in the notes among participants of DTC,
Clearstream, Luxembourg and Euroclear, none of Euroclear,
Clearstream, Luxembourg or DTC is under any obligation to
perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither we nor any
agent or any paying agent, any underwriter or any affiliate of
any of the above, or any person by whom any of the above is
controlled for the purposes of the United States Securities Act
of 1933, as amended, will have any responsibility for the
performance by DTC, Euroclear and Clearstream, Luxembourg or
their respective direct or indirect participants or
accountholders of their respective obligations under the rules
and procedures governing their operations or for the sufficiency
for any purpose of the arrangements described above.
S-28
CAPITALIZATION OF GENERAL ELECTRIC CAPITAL CORPORATION
The following table set forth our capitalization and
indebtedness and our consolidated affiliates, consisting of
borrowings and equity, at December 31, 2004 and
June 30, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at | |
|
(unaudited) | |
|
|
December 31, | |
|
Outstanding at | |
|
|
2004 | |
|
June 30, | |
|
|
(Restated) | |
|
2005 | |
|
|
| |
|
| |
|
|
(Dollar amounts in millions) | |
Liabilities and Shareowners Equity
|
|
|
|
|
|
|
|
|
Borrowings:
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$ |
147,792 |
|
|
$ |
135,326 |
|
|
Senior long-term borrowings
|
|
|
203,714 |
|
|
|
210,346 |
|
|
Subordinated long-term borrowings
|
|
|
820 |
|
|
|
773 |
|
|
|
|
|
|
|
|
|
|
Total borrowings
|
|
|
352,326 |
|
|
|
346,445 |
|
Accounts Payable
|
|
|
17,083 |
|
|
|
16,337 |
|
Insurance liabilities, reserves and annuity benefits
|
|
|
103,890 |
|
|
|
103,975 |
|
Other liabilities
|
|
|
23,253 |
|
|
|
21,901 |
|
Deferred income taxes
|
|
|
10,270 |
|
|
|
11,494 |
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
506,822 |
|
|
|
500,152 |
|
|
|
|
|
|
|
|
Minority interest in equity of consolidated affiliates
|
|
|
6,105 |
|
|
|
8,766 |
|
Equity:
|
|
|
|
|
|
|
|
|
|
Variable cumulative preferred stock-par value $100, liquidation
preference $100,000 per share (33,000 shares
authorized and 26,000 shares outstanding)
|
|
|
3 |
|
|
|
3 |
|
|
Common stock, $14.00 par value (4,166,000 shares
authorized and 3,985,403 shares outstanding)
|
|
|
56 |
|
|
|
56 |
|
|
Additional paid-in capital
|
|
|
14,539 |
|
|
|
14,563 |
|
|
Retained earnings
|
|
|
34,947 |
|
|
|
37,277 |
|
|
Accumulated gains/(losses)net:
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
974 |
|
|
|
1,026 |
|
|
|
Currency translation adjustments
|
|
|
4,844 |
|
|
|
2,822 |
|
|
|
Cash flow hedges
|
|
|
(1,281 |
) |
|
|
(960 |
) |
|
|
Minimum pension liabilities
|
|
|
(124 |
) |
|
|
(135 |
) |
|
|
|
|
|
|
|
|
Total equity
|
|
|
53,958 |
|
|
|
54,652 |
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$ |
566,885 |
|
|
$ |
563,570 |
|
|
|
|
|
|
|
|
There has been no material change in our capitalization and/or
indebtedness or that of our consolidated affiliates considered
as a whole since June 30, 2005.
S-29
SELECTED CONSOLIDATED EARNINGS AND FINANCIAL POSITION DATA
OF
GENERAL ELECTRIC CAPITAL CORPORATION
The following consolidated earnings data for each of the years
in the three-year period ended December 31, 2004, and the
consolidated financial position data as of December 31,
2004 and 2003, have been taken or computed from the audited
financial statements of GECC and our consolidated affiliates
included in our Annual Report on Form 10-K, as amended by
amendment No. 1 on Form 10-K/ A, for the fiscal year
ended December 31, 2004. The consolidated earnings data for
the six month period ended June 30, 2005 have been taken or
computed from our unaudited condensed financial statements
included in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005. The Annual Report and
Quarterly Report are incorporated by reference in this
prospectus. The following selected consolidated earnings and
financial position data should be read in conjunction with the
financial statements of GECC and our consolidated affiliates
contained in such document.
Consolidated Earnings Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) | |
|
|
|
|
Six Months Ended | |
|
|
Year Ended December 31, | |
|
| |
|
|
| |
|
|
|
June 30, | |
|
|
2004 | |
|
2003 | |
|
2002 | |
|
June 30, | |
|
2004 | |
|
|
(Restated) | |
|
(Restated) | |
|
(Restated) | |
|
2005 | |
|
(Restated) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Earned income
|
|
$ |
59,850 |
|
|
$ |
53,370 |
|
|
$ |
48,835 |
|
|
$ |
32,337 |
|
|
$ |
28,329 |
|
Interest expense
|
|
|
11,158 |
|
|
|
9,999 |
|
|
|
9,479 |
|
|
|
7,023 |
|
|
|
5,394 |
|
Operating and administrative expense
|
|
|
18,810 |
|
|
|
15,243 |
|
|
|
13,175 |
|
|
|
9,646 |
|
|
|
9,389 |
|
Insurance losses and policyholder and annuity benefits
|
|
|
7,139 |
|
|
|
8,510 |
|
|
|
8,275 |
|
|
|
4,189 |
|
|
|
3,539 |
|
Cost of goods sold
|
|
|
2,741 |
|
|
|
2,119 |
|
|
|
3,039 |
|
|
|
1,263 |
|
|
|
1,252 |
|
Provision for losses on financing receivables
|
|
|
3,868 |
|
|
|
3,612 |
|
|
|
2,978 |
|
|
|
1,888 |
|
|
|
1,956 |
|
Depreciations and amortization of equipment on operating leases
(including buildings and equipment)
|
|
|
5,774 |
|
|
|
4,594 |
|
|
|
4,248 |
|
|
|
3,023 |
|
|
|
2,841 |
|
Minority interest in net earnings of consolidated affiliates
|
|
|
359 |
|
|
|
84 |
|
|
|
95 |
|
|
|
294 |
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes and accounting changes
|
|
|
10,001 |
|
|
|
9,209 |
|
|
|
7,546 |
|
|
|
5,011 |
|
|
|
3,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(1,741 |
) |
|
|
(1,743 |
) |
|
|
(992 |
) |
|
|
(808 |
) |
|
|
(672 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before accounting changes
|
|
$ |
8,260 |
|
|
$ |
7,466 |
|
|
$ |
6,554 |
|
|
$ |
4,203 |
|
|
$ |
3,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The consolidated ratios of earnings to fixed charges for the
years ended December 31, 2004 and December 31, 2003,
as restated, were 1.89 and 1.86, respectively. The consolidated
ratios of earnings to fixed charges for the six month periods
ended June 30, 2005 and June 30, 2004 (June 30,
2004, as restated) were 1.72 and 1.71, respectively. For
purposes of computing the consolidated ratios of earnings to
fixed charges, earnings consist of net earnings adjusted for the
provision for income taxes, minority interest, interest
capitalized (net of amortization) and fixed charges. Fixed
charges consist of interest on all indebtedness and one-third of
annual rentals, which we believe is a reasonable approximation
of the interest factor of such rentals.
S-30
Consolidated Financial Position Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, | |
|
|
|
|
| |
|
(unaudited) | |
|
|
2004 | |
|
2003 | |
|
At June 30, | |
|
|
(Restated) | |
|
(Restated) | |
|
2005 | |
|
|
| |
|
| |
|
| |
Financing receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time sales and loans net of deferred income
|
|
$ |
218,837 |
|
|
$ |
187,941 |
|
|
$ |
214,359 |
|
|
Investment in financing leases net of deferred income
|
|
|
66,340 |
|
|
|
63,760 |
|
|
|
63,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financing receivables
|
|
|
285,177 |
|
|
|
251,701 |
|
|
|
277,717 |
|
Allowance for losses on financing receivables
|
|
|
(5,589 |
) |
|
|
(6,198 |
) |
|
|
(5,010 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Financing receivables net
|
|
$ |
279,588 |
|
|
$ |
245,503 |
|
|
$ |
272,707 |
|
|
|
|
|
|
|
|
|
|
|
Percent of allowance for losses on financing receivable to total
financing receivables
|
|
|
1.96 |
% |
|
|
2.46 |
% |
|
|
1.80 |
% |
|
|
|
|
|
|
|
|
|
|
Equipment on operating leases (including buildings and equipment)
|
|
|
46,351 |
|
|
|
38,621 |
|
|
|
48,342 |
|
Intangible assets net
|
|
|
25,426 |
|
|
|
22,610 |
|
|
|
25,274 |
|
Other assets
|
|
|
69,408 |
|
|
|
60,348 |
|
|
|
70,595 |
|
Total assets
|
|
$ |
566,885 |
|
|
$ |
506,773 |
|
|
$ |
563,570 |
|
Capitalization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable within one year
|
|
$ |
147,792 |
|
|
$ |
148,556 |
|
|
$ |
135,326 |
|
|
Senior notes payable after one year
|
|
|
203,714 |
|
|
|
161,578 |
|
|
|
210,346 |
|
|
Subordinated notes payable after one year
|
|
|
820 |
|
|
|
963 |
|
|
|
773 |
|
|
Equity
|
|
$ |
53,958 |
|
|
$ |
46,692 |
|
|
$ |
54,652 |
|
|
|
|
|
|
|
|
|
|
|
The ratios of debt to equity at December 31, 2004 and
December 31, 2003, as restated, were 6.53 and 6.66,
respectively. The ratio of debt to equity at June 30, 2005
was 6.34.
UNITED STATES TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal
income tax considerations that may be relevant to you if you
invest in notes. Except as discussed under
Non-U.S. Holders and Information
Reporting and Backup Withholding, the discussion generally
applies only to holders of notes that are U.S. holders. You
will be a U.S. holder if you are an individual who is a
citizen or resident of the United States, a U.S. domestic
corporation, or any other person that is subject to
U.S. federal income tax on a net income basis in respect of
an investment in the notes. This summary deals only with
U.S. holders that hold notes as capital assets. It does not
address considerations that may be relevant to you if you are an
investor that is subject to special tax rules, such as a bank,
thrift, real estate investment trust, regulated investment
company, insurance company, dealer in securities or currencies,
trader in securities or commodities that elects mark-to-market
treatment, person that will hold notes as a hedge against
currency risk or as a position in a straddle,
conversion or other integrated transaction, tax-exempt
organization, certain former citizens and residents or a person
whose functional currency is not the
U.S. dollar. Any special U.S. federal income tax
considerations relevant to a particular issue of notes will be
discussed in the applicable pricing supplement.
This summary is based on laws, regulations, rulings and
decisions now in effect, all of which may change. Any change
could apply retroactively and could affect the continued
validity of this summary.
You should consult your tax adviser about the tax consequences
of purchasing, holding or disposing of notes, including the
relevance to your particular situation of the considerations
discussed below, as well as the relevance to your particular
situation of state, local or other tax laws.
S-31
Payments or Accruals of Interest
Payments or accruals of qualified stated interest
(as defined below) on a note will be taxable to you as ordinary
interest income at the time that you receive or accrue such
amounts (in accordance with your regular method of tax
accounting). If you use the cash method of tax accounting and
you receive payments of interest in a currency other than
U.S. dollars (a foreign currency) pursuant to
the terms of the note, the amount of interest income you will
realize will be the U.S. dollar value of the foreign
currency payment based on the exchange rate in effect on the
date you receive the payment, regardless of whether you convert
the payment into U.S. dollars. If you are an accrual-basis
U.S. holder, the amount of interest income you will realize
will be based on the average exchange rate in effect during the
interest accrual period (or with respect to an interest accrual
period that spans two taxable years, at the average exchange
rate for the partial period within the taxable year).
Alternatively, as an accrual-basis U.S. holder, you may
elect to translate all interest income on foreign
currency-denominated notes at the spot rate on the last day of
the accrual period (or the last day of the taxable year, in the
case of an accrual period that spans more than one taxable year)
or on the date that you receive the interest payment if that
date is within five business days of the end of the accrual
period. If you make this election, you must apply it
consistently to all debt instruments from year to year and you
cannot change the election without the consent of the Internal
Revenue Service. If you use the accrual method of accounting for
tax purposes, you will recognize foreign currency gain or loss
on the receipt of a foreign currency interest payment if the
exchange rate in effect on the date the payment is received
differs from the rate applicable to the previous accrual of that
interest income. This foreign currency gain or loss will be
treated as ordinary income or loss, but generally will not be
treated as an adjustment to interest income received on the note.
Purchase, Sale and Retirement of Notes
Initially, your tax basis in a note generally will equal the
cost of the note to you. Your basis will increase by any amounts
that you are required to include in income under the rules
governing original issue discount and market discount, and will
decrease by the amount of any amortized premium and any payments
other than qualified stated interest made on the note. (The
rules for determining these amounts are discussed below.) If you
purchase a note that is denominated in a foreign currency, the
cost to you (and therefore generally your initial tax basis)
will be the U.S. dollar value of the foreign currency
amount paid on the date of purchase calculated at the exchange
rate in effect on that date. If the foreign currency note is
traded on an established securities market and you are a
cash-basis taxpayer (or if you are an accrual-basis taxpayer
that makes a special election), you will determine the
U.S. dollar value of the cost of the note by translating
the amount of the foreign currency that you paid for the note at
the spot rate of exchange on the settlement date of your
purchase. The amount of any subsequent adjustments to your tax
basis in a note in respect of foreign currency-denominated
original issue discount, market discount and premium will be
determined in the manner described below. If you convert
U.S. dollars into a foreign currency and then immediately
use that foreign currency to purchase a note, you generally will
not have any taxable gain or loss as a result of the conversion
or purchase.
When you sell or exchange a note, or if a note that you hold is
retired, you generally will recognize gain or loss equal to the
difference between the amount you realize on the transaction
(less any accrued qualified stated interest, which will be
subject to tax in the manner described above under
Payments or Accruals of Interest) and your tax basis
in the note. If you sell or exchange a note for foreign
currency, or receive foreign currency on the retirement of a
note, the amount you will realize for U.S. tax purposes
generally will be the dollar value of the foreign currency that
you receive calculated at the exchange rate in effect on the
date the foreign currency note is disposed of or retired. If you
dispose of a foreign currency note that is traded on an
established securities market and you are a cash-basis
U.S. holder (or if you are an accrual-basis holder that
makes a special election), you will determine the
U.S. dollar value of the amount realized by translating the
amount at the spot rate of exchange on the settlement date of
the sale, exchange or retirement.
The special election available to you if you are an
accrual-basis taxpayer in respect of the purchase and sale of
foreign currency notes traded on an established securities
market, which is discussed in the two
S-32
preceding paragraphs, must be applied consistently to all debt
instruments from year to year and cannot be changed without the
consent of the Internal Revenue Service.
Except as discussed below with respect to short-term notes,
market discount and foreign currency gain or loss, the gain or
loss that you recognize on the sale, exchange or retirement of a
note generally will be capital gain or loss. The gain or loss on
the sale, exchange or retirement of a note will be long-term
capital gain or loss if you have held the note for more than one
year on the date of disposition. Net long-term capital gain
recognized by an individual U.S. holder generally will be
subject to tax at a lower rate than net short-term capital gain
or ordinary income. The ability of U.S. holders to offset
capital losses against ordinary income is limited.
Despite the foregoing, the gain or loss that you recognize on
the sale, exchange or retirement of a foreign currency note
generally will be treated as ordinary income or loss to the
extent that the gain or loss is attributable to changes in
exchange rates during the period in which you held the note.
This foreign currency gain or loss will not be treated as an
adjustment to interest income that you receive on the note.
Original Issue Discount
If we issue notes at a discount from their stated redemption
price at maturity, and the discount is equal to or more than the
product of one-fourth of one percent (0.25%) of the stated
redemption price at maturity of the notes multiplied by the
number of full years to their maturity, the notes will be
OID Notes. The difference between the issue price
and the stated redemption price at maturity of the notes will be
the original issue discount. The issue
price of the notes will be the first price at which a
substantial amount of the notes are sold to the public for money
(i.e., excluding sales of notes to underwriters,
placement agents, wholesalers, or similar persons). The
stated redemption price at maturity will include all
payments under the notes other than payments of qualified stated
interest. The term qualified stated interest
generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments issued by us)
at least annually during the entire term of a note at a single
fixed interest rate or, subject to certain conditions, based on
one or more interest indices.
If you invest in an OID Note, you generally will be subject to
the special tax accounting rules for original issue discount
obligations provided by the Internal Revenue Code and certain
U.S. Treasury regulations. You should be aware that, as
described in greater detail below, if you invest in an OID Note,
you generally will be required to include original issue
discount in ordinary gross income for U.S. federal income
tax purposes as it accrues, although you may not yet have
received the cash attributable to that income.
In general, and regardless of whether you use the cash or the
accrual method of tax accounting, if you are the holder of an
OID Note with a maturity greater than one year, you will be
required to include in ordinary gross income the sum of the
daily portions of original issue discount on that
note for all days during the taxable year that you own the note.
The daily portions of original issue discount on an OID Note are
determined by allocating to each day in any accrual period a
ratable portion of the original issue discount allocable to that
period. Accrual periods may be any length and may vary in length
over the term of an OID Note, so long as no accrual period is
longer than one year and each scheduled payment of principal or
interest occurs on the first or last day of an accrual period.
The amount of original issue discount on an OID Note allocable
to each accrual period is determined by:
|
|
|
(i) multiplying the adjusted issue price (as
defined below) of the note at the beginning of the accrual
period by a fraction, the numerator of which is the annual yield
to maturity (defined below) of the note and the denominator of
which is the number of accrual periods in a year; and |
|
|
(ii) subtracting from that product the amount (if any)
payable as qualified stated interest allocable to that accrual
period. |
In the case of an OID Note that is a floating rate note, both
the annual yield to maturity and the qualified
stated interest will be determined for these purposes as though
the note will bear interest in all periods at a fixed rate
generally equal to the rate that would be applicable to interest
payments on the note on its date of issue or, in the case of
some floating rate notes, the rate that reflects the yield that
is reasonably
S-33
expected for the note. (Additional rules may apply if interest
on a floating rate note is based on more than one interest
index.) The adjusted issue price of an OID Note at
the beginning of any accrual period will generally be the sum of
its issue price (including any accrued interest) and the amount
of original issue discount allocable to all prior accrual
periods, reduced by the amount of all payments other than any
qualified stated interest payments on the note in all prior
accrual periods. All payments on an OID Note (other than
qualified stated interest) will generally be viewed first as
payments of previously accrued original issue discount (to the
extent of the previously accrued discount), with payments
considered made from the earliest accrual periods first, and
then as a payment of principal. The annual yield to
maturity of a note is the discount rate (appropriately
adjusted to reflect the length of accrual periods) that causes
the present value on the issue date of all payments on the note
to equal the issue price. As a result of this
constant-yield method of including original issue
discount income, the amounts you will be required to include in
your gross income if you invest in an OID Note denominated in
U.S. dollars generally will be lesser in the early years
and greater in the later years than amounts that would be
includible on a straight-line basis.
You generally may make an irrevocable election to include in
income your entire return on a note (i.e., the excess of
all remaining payments to be received on the note, including
payments of qualified stated interest, over the amount you paid
for the note) under the constant-yield method described above.
If you purchase notes at a premium or market discount and if you
make this election, you will also be deemed to have made the
election (discussed below under Premium and
Market Discount) to amortize premium or to accrue
market discount currently on a constant-yield basis in respect
of all other premium or market discount bonds that you hold.
In the case of an OID Note that is also a foreign currency note,
you should determine the U.S. dollar amount includible as
original issue discount for each accrual period by
(i) calculating the amount of original issue discount
allocable to each accrual period in the foreign currency using
the constant-yield method described above and
(ii) translating that foreign currency amount at the
average exchange rate in effect during that accrual period (or,
with respect to an interest accrual period that spans two
taxable years, at the average exchange rate for each partial
period). Alternatively, you may translate the foreign currency
amount at the spot rate of exchange on the last day of the
accrual period (or the last day of the taxable year, for an
accrual period that spans two taxable years) or at the spot rate
of exchange on the date of receipt, if that date is within five
business days of the last day of the accrual period, provided
that you have made the election described above under
Payments or Accruals of Interest. Because exchange
rates may fluctuate, if you are the holder of an OID Note that
is also a foreign currency note, you may recognize a different
amount of original issue discount income in each accrual period
than would be the case if you were the holder of an otherwise
similar OID Note denominated in U.S. dollars. Upon the
receipt of an amount attributable to original issue discount
(whether in connection with a payment of an amount that is not
qualified stated interest or the sale or retirement of the OID
Note), you will recognize ordinary income or loss measured by
the difference between the amount received (translated into
U.S. dollars at the exchange rate in effect on the date of
receipt or on the date of disposition of the OID Note, as the
case may be) and the amount accrued (using the exchange rate
applicable to such previous accrual).
If you purchase an OID Note outside of the initial offering at a
cost less than its remaining redemption amount (i.e., the
total of all future payments to be made on the note other than
payments of qualified stated interest), or if you purchase an
OID Note in the initial offering at a price other than the
notes issue price, you generally will also be required to
include in gross income the daily portions of original issue
discount, calculated as described above. However, if you acquire
an OID Note at a price greater than its adjusted issue price
(but less than or equal to its remaining redemption amount), you
will be entitled to reduce your periodic inclusions of original
issue discount to reflect the premium paid over the adjusted
issue price.
Floating rate notes generally will be treated as variable
rate debt instruments under the OID Regulations.
Accordingly, the stated interest on a floating rate note
generally will be treated as qualified stated
interest and such a note will not have original issue
discount solely as a result of the fact that it provides for
interest at a variable rate. If a floating rate note does not
qualify as a variable rate debt instrument, the note
will be subject to special rules that govern the tax treatment
of debt obligations that
S-34
provide for contingent payments. We will provide a description
of the tax considerations relevant to U.S. holders of any
such notes in the relevant pricing supplement.
Certain OID Notes may be redeemed prior to Maturity, either at
the option of the Company or at the option of the holder, or may
have special repayment or interest rate reset features as
indicated in the pricing supplement. OID Notes containing these
features may be subject to rules that differ from the general
rules discussed above. If you are considering the purchase of
OID Notes with these features, you should carefully examine the
pricing supplement and consult your tax adviser about their
treatment since the tax consequences of original issue discount
will depend, in part, on the particular terms and features of
the notes.
Short-Term Notes
The rules described above will also generally apply to OID Notes
with maturities of one year or less (short-term
notes), but with some modifications.
First, the original issue discount rules treat none of the
interest on a short-term note as qualified stated interest, but
treat a short-term note as having original issue discount. Thus,
all short-term notes will be OID Notes. Except as noted below,
if you are a cash-basis holder of a short-term note and you do
not identify the short-term note as part of a hedging
transaction, you will generally not be required to accrue
original issue discount currently, but you will be required to
treat any gain realized on a sale, exchange or retirement of the
note as ordinary income to the extent such gain does not exceed
the original issue discount accrued with respect to the note
during the period you held the note. You may not be allowed to
deduct all of the interest paid or accrued on any indebtedness
incurred or maintained to purchase or carry a short-term note
until the Maturity of the note or its earlier disposition in a
taxable transaction. Notwithstanding the foregoing, if you are a
cash-basis U.S. holder of a short-term note, you may elect
to accrue original issue discount on a current basis (in which
case the limitation on the deductibility of interest described
above will not apply). A U.S. holder using the accrual
method of tax accounting and some cash method holders (including
banks, securities dealers, regulated investment companies and
certain trust funds) generally will be required to include
original issue discount on a short-term note in gross income on
a current basis. Original issue discount will be treated as
accruing for these purposes on a ratable basis or, at the
election of the holder, on a constant-yield basis based on daily
compounding.
Second, regardless of whether you are a cash-basis or
accrual-basis holder, if you are the holder of a short-term note
you may elect to accrue any acquisition discount
with respect to the note on a current basis. Acquisition
discount is the excess of the remaining redemption amount of the
note at the time of acquisition over the purchase price.
Acquisition discount will be treated as accruing ratably or, at
the election of the holder, under a constant-yield method based
on daily compounding. If you elect to accrue acquisition
discount, the original issue discount rules will not apply.
Finally, the market discount rules described below will not
apply to short-term notes.
Premium
If you purchase a note at a cost greater than the notes
remaining redemption amount, you will be considered to have
purchased the note at a premium, and you may elect to amortize
the premium as an offset to interest income, using a
constant-yield method, over the remaining term of the note. If
the note is redeemable prior to maturity, the amount of
amortizable premium is determined with reference either to the
amount payable on maturity or, if it results in a smaller
premium attributable to the earlier redemption period, with
reference to the amount payable on the earlier redemption date.
If you make the election to amortize the premium, it generally
will apply to all debt instruments that you hold at the time of
the election, as well as any debt instruments that you
subsequently acquire. In addition, you may not revoke the
election without the consent of the Internal Revenue Service. If
you elect to amortize the premium, you will be required to
reduce your tax basis in the note by the amount of the premium
amortized during your holding period. OID Notes purchased at a
premium will not be subject to the original issue discount rules
described above. In the case of premium on a foreign currency
note, you should calculate the amortization of the premium in
the foreign currency. Premium amortization deductions
attributable to a period reduce interest
S-35
income in respect of that period, and therefore are translated
into U.S. dollars at the rate that you use for interest
payments in respect of that period. Exchange gain or loss will
be realized with respect to amortized premium on a foreign
currency note based on the difference between the exchange rate
computed on the date or dates the premium is amortized against
interest payments on the note and the exchange rate on the date
the holder acquired the note. If you do not elect to amortize
premium, the amount of premium will be included in your tax
basis in the note. Therefore, if you do not elect to amortize
premium and you hold the note to Maturity, you generally will be
required to treat the premium as capital loss when the note
matures.
Market Discount
If you purchase a note at a price that is lower than the
notes remaining redemption amount (or in the case of an
OID Note, the notes adjusted issue price), by 0.25% or
more of the remaining redemption amount (or adjusted issue
price), multiplied by the number of remaining whole years to
maturity, the note will be considered to bear market
discount in an amount equal to such difference in your
hands. In this case, any gain that you realize on the
disposition of the note generally will be treated as ordinary
interest income to the extent of the market discount that
accrued on the note during your holding period. In addition, you
may be required to defer the deduction of all or a portion of
the interest paid on any indebtedness that you incurred or
continued to purchase or carry the note. In general, market
discount will be treated as accruing ratably over the term of
the note, or, at your election, under a constant-yield method.
You must accrue market discount on a foreign currency note in
the specified currency. The amount that you will be required to
include in income in respect of accrued market discount will be
the U.S. dollar value of the accrued amount, generally
calculated at the exchange rate in effect on the date that you
dispose of the note.
You may elect to include market discount in gross income
currently as it accrues (on either a ratable or constant-yield
basis), in lieu of treating a portion of any gain realized on a
sale of the note as ordinary income. If you elect to include
market discount on a current basis, the interest deduction
deferral rule described above will not apply. If you do make
such an election, it will apply to all market discount debt
instruments that you acquire on or after the first day of the
first taxable year to which the election applies. The election
may not be revoked without the consent of the Internal Revenue
Service. Any accrued market discount on a foreign currency note
that is currently includible in income will be translated into
U.S. dollars at the average exchange rate for the accrual
period (or portion thereof within the holders taxable
year).
Indexed Notes and Other Notes Providing for Contingent
Payments
Special rules govern the tax treatment of debt obligations that
provide for contingent payments (contingent debt
obligations). These rules generally require accrual of
interest income on a constant-yield basis in respect of
contingent debt obligations at a yield determined at the time of
issuance of the obligation, and may require adjustments to these
accruals when any contingent payments are made. We will provide
a description of the tax considerations relevant to
U.S. holders of any contingent debt obligations in the
relevant pricing supplement.
Non-U.S. Holders
If you are a non-resident alien individual or a foreign
corporation (a non-U.S. holder), the interest
income that you derive in respect of the notes generally will be
exempt from United States federal withholding tax. This
exemption will apply to you provided that
|
|
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|
|
you do not actually or constructively own 10 percent or
more of the combined voting power of all classes of our stock
and you are not a controlled foreign corporation that is
related, directly or indirectly to us through stock
ownership, and |
|
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|
the beneficial owner provides a statement (generally, an
Internal Revenue Service Form W-8BEN) signed under
penalties of perjury that includes its name and address and
certifies that it is a non-U.S. holder in compliance with
applicable requirements (or satisfies certain documentary
evidence requirements for establishing that it is a
non-U.S. holder). |
S-36
If you are a non-U.S. holder, any gain you realize on a
sale, exchange or other disposition of notes generally will be
exempt from United States federal income tax, including
withholding tax. This exemption will not apply to you if your
gain is effectively connected with your conduct of a trade or
business in the United States or you are an individual holder
and are present in the United States for 183 days or more
in the taxable year of the disposition and either your gain is
attributable to an office or other fixed place of business that
you maintain in the United States or you have a tax home in the
United States.
United States federal estate tax will not apply to a note held
by you if at the time of death you were not a citizen or
resident of the United States, you did not actually or
constructively own 10 percent or more of the combined
voting power of all classes of our stock and payments of
interest on the note would not have been effectively connected
with the conduct by you of a trade or business in the United
States.
For purposes of applying the rules set forth under this heading
Non-U.S. Holders to a note held by an entity
that is treated as fiscally transparent (for example, a
partnership) for U.S. federal income tax purposes, the
beneficial owner means each of the ultimate beneficial owners of
the entity.
Information Reporting and Backup Withholding
The paying agent must file information returns with the Internal
Revenue Service in connection with payments made on the notes to
certain U.S. holders. If you are a U.S. holder, you
generally will not be subject to United States backup
withholding tax on such payments if you provide your taxpayer
identification number to the paying agent. You may also be
subject to information reporting and backup withholding tax
requirements with respect to the proceeds from a sale of the
notes. If you are a non-U.S. holder, you may have to comply
with certification procedures to establish your
non-U.S. status in order to avoid information reporting on
IRS Form 1099 (although such amounts may be subject to
reporting on IRS Form 1042-S) and backup withholding tax.
The certification procedures required to claim the exemption
from withholding tax on interest income described above will
satisfy these requirements. The amount of any backup withholding
from a payment to a holder may be allowed as a credit against
the holders U.S. federal income tax liability and may
entitle the holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.
S-37
PLAN OF DISTRIBUTION
General
We are offering the notes on a continuous basis through agents
that have agreed to use their reasonable best efforts to solicit
orders. We have the right to accept orders or reject proposed
purchases in whole or in part. The agents also have the right,
using their reasonable discretion, to reject any proposed
purchase of the notes in whole or in part. We expect to pay an
agent a commission ranging from 0.05% to 0.60% of the principal
amount of notes they sell. The exact commission paid will be
determined by the stated maturity of the notes sold. The
following table describes the potential proceeds we will receive
but does not include expenses payable by us which we estimate to
be approximately $4,532,000, including SEC filing fees, in the
aggregate for the securities remaining and those previously sold
from the most recent registration statement for the program:
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Price to Public | |
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Agents Commissions | |
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Proceeds to Us | |
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Per Note
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100% |
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0.05% - 0.60% |
|
|
|
99.40% - 99.95% |
|
Total
|
|
|
$26,404,605,650 |
|
|
|
$13,202,303 - 158,427,634 |
|
|
|
$26,246,178,016 - 26,391,403,347 |
|
We may arrange for notes to be sold through any agent or may
sell notes directly to investors. If we sell notes directly to
investors, no commission or discount will be paid. We also may
sell notes to any agent as principal for the agents
account at a price agreed upon at the time of sale. The agent
may resell these notes 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
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.
Agents may sell notes purchased from us 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 us to such dealers. After the initial public
offering of the notes, the public offering price, the concession
and the discount may be changed.
The notes will not have an established trading market when
issued. The agents may make a market in the notes, but are not
obligated to do so and may discontinue any market-making at any
time without notice. We cannot assure you that a secondary
market for any notes will develop or that any notes will be sold.
In connection with the offering of notes, a specified agent or
persons on its behalf may over-allot or effect transactions that
stabilize, maintain or otherwise affect the market price of the
notes with a view to supporting the market price of the notes at
a level higher than that which might otherwise prevail for a
limited period. However, there may be no obligation on the
relevant agent or such other person to do this. Such
stabilization, if commenced, may be discontinued at any time and
must be brought to an end after a limited period. Such
stabilizing, if any, shall be in compliance with all relevant
laws and regulations. Such transactions may consist of bids or
purchases for the purpose of pegging, fixing or maintaining the
price of notes. If the agents create a short position in notes,
i.e., if they sell notes in an aggregate principal amount
exceeding that set forth in the applicable pricing supplement,
the agents may reduce that short position by purchasing notes in
the open market. In general, purchases of notes for the purpose
of stabilization or to reduce a short position could cause the
price of notes to be higher than it might be in the absence of
such purchases.
Neither we nor any of the agents makes any representation or
prediction as to the direction or magnitude of any effect that
the transactions described in the immediately preceding
paragraph may have on the price of notes. In addition, neither
we nor any of the agents makes any representation that the
agents will engage in any such transactions or that such
transactions, once commenced, will not be discontinued without
notice.
The agents may be deemed to be underwriters within
the meaning of the Securities Act. We have agreed to indemnify
the agents against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that they
may be required to make in connection with such indemnification.
S-38
We are offering the notes through the following agents:
Citigroup Global Markets Inc., Deutsche Bank Securities Inc., GE
Capital Markets, Inc., Goldman, Sachs & Co.,
J.P. Morgan Securities Inc., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and UBS
Securities LLC. We may also sell notes from time to time through
one or more additional agents on substantially the same terms as
those applicable to the agents named above.
The agents and dealers and their affiliates may engage in
transactions with, or perform services for, us or our affiliates
in the ordinary course of their businesses. GECC owns all of the
common stock of GE Capital Markets, Inc., one of the agents.
Each offering of the notes in which GE Capital Markets, Inc.
participates will be conducted in compliance with the
requirements of Rule 2720 of the NASD regarding an NASD
member firm distributing the securities of an affiliate. The
maximum commission or discount to be received by any NASD member
or independent agent will not be greater than 8% of the
principal amount of notes they sell.
Selling Restrictions
No action has been taken by us that would permit a public
offering of our securities or possession or distribution of this
prospectus supplement, the accompanying prospectus or any other
offering material in any jurisdiction where action for that
purpose is required. Each agent will be required to agree that
it will comply with all applicable laws and regulations in force
in any jurisdiction in which it purchases, offers or sells our
securities or possesses or distributes this prospectus
supplement, the accompanying prospectus or any other offering
material and will obtain any consent, approval or permission
required by it for the purchase, offer or sale by it of our
securities under the laws and regulations in force in any
jurisdiction to which it is subject or in which it makes such
purchases, offers or sales and we shall have no responsibility
for such purchases, offers or sales.
The applicable pricing supplement may set out further
restrictions on the offering or sale of our securities,
depending on the currency of such securities and the
jurisdictions into which such securities are being offered.
LEGAL OPINIONS
Alan M. Green, our General Counsel, Treasury Operations, will
issue an opinion about the legality of the notes for us. Davis
Polk & Wardwell, New York, New York will issue an
opinion for the agents. Cleary Gottlieb Steen &
Hamilton LLP, New York, New York will issue an opinion regarding
the United States Tax Considerations section of this
prospectus supplement. Mr. Green beneficially owns or has
rights to acquire an aggregate of less than 0.01% of General
Electric Companys common stock.
S-39
GENERAL INFORMATION
Independent Registered Public Accounting Firm
Our independent registered public accounting firm is KPMG LLP,
3001 Summer Street, Stamford, Connecticut 06905, U.S.A.
Authorizations
The issuance of the notes was authorized most recently by
resolutions adopted by our Board of Directors on March 24,
2005.
Stamp Taxes
Purchasers of notes 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.
Litigation and Material Change
Except as otherwise disclosed herein, we are not party to any
material litigation proceeding and there has been no material
adverse change in our financial position and that of our
consolidated affiliates considered as a whole since
December 31, 2004.
Clearance
If specified in the applicable pricing supplement, notes of
particular tranches may, when issued, be accepted for clearance
through Euroclear and through Clearstream, Luxembourg or such
other clearing systems as are specified in the applicable
pricing supplement. See Global Clearance and
Settlement for additional information.
S-40
GLOSSARY
The following is a glossary of terms used in this prospectus
supplement.
Bond Equivalent Yield means the rate for which is
quoted on a bank discount basis, a yield (expressed as a
percentage) calculated in accordance with the following formula:
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D x N |
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Bond Equivalent Yield
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= |
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X 100 |
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360 - D x M |
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where D refers to the per annum rate for the
security, quoted on a bank discount basis and expressed as a
decimal; N refers to 365 or 366, as the case may be
and M refers to the actual number of days in the
period for which interest is being calculated.
Business Day means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation
or executive order to close in The City of New York; provided,
however, that, with respect to notes denominated in a foreign
currency, such day is also not a day on which commercial banks
are authorized or required by law, regulation or executive order
to close in the Principal Financial Center of the country
issuing the specified currency (or, if the specified currency is
euro, such day is also a day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer
(TARGET) System is open); provided, further, that, with
respect to LIBOR notes (other than those denominated in euro),
such day is also a London Business Day.
Calculation Date means the date by which the
calculation agent calculates an interest rate for a floating
rate note, which will be in respect of any Interest
Determination Date, the earlier of (i) the tenth day after
the Interest Determination Date or, if such day is not a
Business Day, the next Business Day, or (ii) the Business
Day immediately before the applicable interest payment date or
Maturity, as the case may be (except in the case of a LIBOR note
where the Calculation Date is the Interest Determination Date).
Clearstream, Luxembourg means Clearstream Banking,
société anonyme.
Designated CMT Telerate Page means the display on
Telerate (or any successor service) on the page designated in
the applicable pricing supplement (or any other page as may
replace such page on such service. 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 LIBOR Currency means the currency
(including composite currencies and euro) specified in the
pricing supplement as to which LIBOR shall be calculated. If no
such currency is specified in the pricing supplement, the
Designated LIBOR Currency will be U.S. dollars.
Designated LIBOR Page means either (a) if
LIBOR Reuters is specified in the applicable pricing
supplement, the display on the Reuters Money 3000 Extra for the
purpose of displaying the London interbank rates of major banks
for the applicable Designated LIBOR Currency, or (b) if
LIBOR Telerate is specified in the applicable
pricing supplement or neither LIBOR Reuters nor
LIBOR Telerate is specified as the method for
calculating LIBOR, the display on Telerate (or any successor
service) for the purpose of displaying the London interbank
rates of major banks for the applicable Designated LIBOR
Currency.
DTC means The Depository Trust Company.
euro means the lawful currency of the member states
of the European Union that adopt the single currency in
accordance with the Treaty establishing the European
Communities, as amended.
Euroclear means the Euroclear System operated by the
Euroclear Operator.
Euroclear Operator means Euroclear Bank S.A./ N.V.
FHLB Index means the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal
Home Loan Bank District most recently announced by the
Federal Home Loan Bank.
S-41
H.15(519) means the publication entitled
Statistical Release H.15(519), Selected Interest
Rates, or any successor publication published by the Board
of Governors of the Federal Reserve System.
H.15 Daily Update means the daily update of
H.15(519), available through the world-wide-web site of the
Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any
successor site or publication.
Indentures means the Third Amended and Restated
Indenture dated as of February 27, 1997 between us and
JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as successor trustee, as supplemented by the First
Supplemental Indenture dated as of May 3, 1999, the Second
Supplemental Indenture dated as of July 2, 2001 and the
Third Supplemental Indenture dated as of November 22, 2002
and an Amended and Restated Subordinated Debt Indenture dated as
of July 15, 2005 between us and JPMorgan Chase.
Index Maturity for any note is the period of
maturity of the instrument, obligation or index from which the
interest rate is calculated.
Interest Determination Date with respect to the CD
Rate and the CMT Rate will be the second Business Day
immediately preceding the applicable Interest Reset Date; the
Interest Determination Date with respect to the
Commercial Paper Rate, the Federal Funds Rate and the Prime Rate
will be the Business Day immediately preceding the applicable
Interest Reset Date; the Interest Determination Date
with respect to the Eleventh District Cost of Funds Rate will be
the last working day of the month immediately preceding the
applicable Interest Reset Date on which the Federal Home
Loan Bank of San Francisco publishes the FHLB Index;
and the Interest Determination Date with respect to
LIBOR will be the second London Business Day immediately
preceding the applicable Interest Reset Date, unless the Index
Currency is (i) pounds sterling, in which case the
Interest Determination Date will be the applicable
Interest Reset Date or (ii) euro, in which case the
Interest Determination Date will be the second TARGET Settlement
Date preceding such Interest Reset Date. With respect to the
Treasury Rate, the Interest Determination Date will
be the day in the week in which the applicable Interest Reset
Date falls on which day Treasury bills are normally auctioned
(Treasury bills are normally sold at an auction held on Monday
of each week, unless such Monday is a legal holiday, in which
case the auction is normally held on the immediately succeeding
Tuesday although such auction may be held on the preceding
Friday); provided, however, that if an auction is held on Friday
of the week preceding the applicable Interest Reset Date, the
Interest Determination Date will be such preceding
Friday. The Interest Determination Date pertaining
to a floating rate note the interest rate of which is determined
by reference to two or more Interest rate bases will be the most
recent Business Day which is at least two Business Days prior to
the applicable Interest Reset Date for such floating rate note
on which each Interest rate basis is determinable. Each Interest
rate basis will be determined as of such date, and the
applicable interest rate will take effect on the applicable
Interest Reset Date.
JPMorgan Chase means JPMorgan Chase Bank, N.A.
(formerly known as The Chase Manhattan Bank), which is our
indenture trustee and paying agent and registrar for the notes.
London Business Day means a day on which commercial
banks are open for business (including dealings in the
Designated LIBOR Currency) in London, England.
Maturity means the date on which the principal of a
note or an installment of principal becomes due and payable as
provided in the note or in the applicable Indenture, whether at
stated maturity or by declaration of acceleration, call for
redemption or otherwise.
Money Market Yield shall be a yield calculated in
accordance with the following formula:
where D refers to the applicable per annum 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 period for which accrued interest is being
calculated.
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D x 360 x 100 |
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Money Market Yield
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360 - (D x M) |
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S-42
Noon Buying Rate means the noon U.S. dollar
buying rate in The City of New York for cable transfers of the
specified foreign currency as certified by the Federal Reserve
Bank of New York.
OID Regulations means regulations issued by the IRS
concerning the treatment of debt instruments issued with
original issue discount.
Original Issue Discount Note means any note that
provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to the applicable Indenture.
Principal Financial Center means (i) the
capital city of the country issuing the currency in which the
notes are denominated or (ii) the capital city of the
country to which the Designated LIBOR Currency relates, as
applicable, except, in the case of (i) or (ii) above,
that with respect to the following currencies, the
Principal Financial Center will be as indicated
below:
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Currency |
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Principal Financial Center | |
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United States dollars
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The City of New York |
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Australian dollars
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Sydney |
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Canadian dollars
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Toronto |
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South African rand
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Johannesburg |
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Swiss francs
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Zurich |
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Reuters Screen PRIME 1 Page means the display on the
Reuters Money 3000 Extra (or any successor service) on the
US PRIME 1 page (or such other page as may replace
the US PRIME 1 page on such service) for the purpose of
displaying prime rates or base lending rates of major United
States banks.
senior indebtedness is defined herein under the
heading Description Notes Subordinated Notes.
Spread means the number of basis points (one basis
point equals one-hundredth of a percentage point) to be added to
or subtracted from the interest rate of a floating rate note.
Spread Multiplier means the percentage of the
interest rate that may be specified in the applicable pricing
supplement by which the interest rate or a floating rate note
will be multiplied.
TARGET Settlement Date means any day on which the
Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open.
Telerate means Moneyline Telerate (or any successor
service).
Telerate Page 120 means page 120 of
Telerate, or any other page as may replace such page on such
service (or successor service).
S-43
ANNEX A
[FORM OF FIXED RATE NOTE PRICING SUPPLEMENT]
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PROSPECTUS
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Pricing Supplement
No. |
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Dated |
PROSPECTUS SUPPLEMENT
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Rule 424(b)(3)-Registration Statement |
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No. |
GENERAL ELECTRIC CAPITAL CORPORATION
GLOBAL MEDIUM-TERM NOTES, SERIES A
(Fixed Rate Notes)
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CUSIP No.:
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ISIN:
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Common Code:
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Trade Date:
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Settlement Date (Original Issue Date):
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Maturity Date:
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Principal Amount (in Specified Currency):
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Price to Public (Issue Price):
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% |
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Agents Discount or Commission:
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% |
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Net Proceeds to Issuer:
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Interest Rate Per Annum:
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% |
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Seniority:
Senior o Subordinated o
Subordination provisions (if different than those summarized in
the accompanying prospectus supplement):
Interest Payment Date(s):
March 15 and September 15 of each year commencing [first payment
date] (with respect to the period from and including [date of
closing] to but excluding [first interest payment date] and on
the Maturity Date.
Other:
Settlement:
DTC
non-DTC
DTC and Euroclear/ Clearstream
Euroclear/ Clearstream only
Denominations:
Notes will be available in denominations of [Insert
denominations] *
Repayment, Redemption and Acceleration
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Optional Repayment Date(s): |
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Initial Redemption Date: |
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Initial Redemption Percentage: |
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Annual Redemption Percentage Reduction: |
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Modified Payment Upon Acceleration: |
CAPITALIZED TERMS USED IN THIS PRICING SUPPLEMENT WHICH ARE
DEFINED IN THE PROSPECTUS SUPPLEMENT SHALL HAVE THE MEANINGS
ASSIGNED TO THEM IN THE PROSPECTUS SUPPLEMENT.
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* |
Notes listed, or admitted to trading on or by, one or more stock
exchange(s), competent authority(ies) and/or market(s) for the
purposes of the European Unions Directive 2003/71/ EC will
be issued in minimum denominations
of 1,000 or
its equivalent in other currencies. |
A-1
Original Issue Discount:
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Amount of OID: |
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Yield to Maturity: |
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Interest Accrual Date: |
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Initial Accrual Period OID: |
Amortizing Notes:
Dual Currency Notes:
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Face Amount Currency: |
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Optional Payment Currency: |
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Designated Exchange Rate: |
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Option Value Calculation Agent: |
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Option Election Date(s): |
Indexed Notes:
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Currency Base Rate: |
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Determination Agent: |
Listing:
Additional Information:
Plan of Distribution:
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[Fixed Price Offering] |
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The Notes are being purchased
by (the
Underwriter), as principal, at 100% of the aggregate
principal amount less an underwriting discount equal
to % of the principal amount of
the Notes. |
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[Variable Price Offering] |
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The Notes are being purchased
by (the
Underwriter), as principal, at a purchase price
of % of the aggregate principal
amount of the Notes. The Underwriter has advised the Company
that the Underwriter proposed to offer the Notes from time to
time for sale in negotiated transactions or otherwise, at prices
determined at the time of sale. |
The Company has agreed to indemnify the Underwriter against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
[Agented]
is
acting as agent in connection with the distribution of the
Notes. The Agent will receive a selling commission equal
to % of the principal amount of
the Notes.
A-2
ANNEX B
[FORM OF FLOATING RATE NOTE PRICING SUPPLEMENT]
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PROSPECTUS
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Pricing Supplement
No. |
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Dated |
PROSPECTUS SUPPLEMENT
|
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Rule 424(b)(3)-Registration Statement |
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No. |
GENERAL ELECTRIC CAPITAL CORPORATION
GLOBAL MEDIUM-TERM NOTES, SERIES A
(Floating Rate Notes)
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Trade Date:
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Settlement Date (Original Issue Date):
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Maturity Date:
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Principal Amount (in Specified Currency):
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Price to Public (Issue Price):
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Agents Discount or Commission:
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Net Proceeds to Issuer (in Specified Currency):
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Interest Rate:
o Regular Floating Rate
o Inverse Floating Rate
o Other Floating Rate
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Interest Rate Basis: o CD
Rate o
Commercial Paper Rate |
o Federal Funds Rate
(See Additional Terms Interest below)
o LIBOR
o Prime Rate
o Treasury Rate
o Other (See
Additional Terms Interest below)
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Spread (Plus or Minus):
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Spread Multiplier: |
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Index Maturity:
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Index Currency: |
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Maximum Interest Rate:
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Minimum Interest Rate: |
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Interest Payment Period:
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Interest Payment Dates:
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Initial Interest Rate Per Annum:
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CAPITALIZED TERMS USED IN THIS PRICING SUPPLEMENT WHICH ARE
DEFINED IN THE PROSPECTUS SUPPLEMENT SHALL HAVE THE MEANINGS
ASSIGNED TO THEM IN THE PROSPECTUS SUPPLEMENT.
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Interest Reset Periods and Dates:
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Interest Determination Dates:
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Seniority:
Senior o Subordinated o
Subordination provisions (if different than those summarized in
the accompanying prospectus supplement):
Settlement:
o DTC o non-DTC o DTC
and Euroclear/Clearstream
o Euroclear/Clearstream
only
B-1
Denominations:
Notes will be available in denominations of [Insert
denominations]*
Repayment, Redemption and Acceleration:
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Optional Repayment Date: |
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Annual redemption Percentage Reduction: |
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Initial Redemption Date: |
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Initial Redemption Percentage: |
Original Issue Discount
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Amount of OID: |
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Interest Accrual Date: |
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Yield to Maturity: |
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Initial Accrual Period OID: |
Amortizing Notes:
Dual Currency Notes:
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Face Amount Currency: |
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Optional Payment Currency: |
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Designated Exchange Rate: |
Indexed Notes:
Listing:
Additional Information:
Plan of Distribution:
[Underwritten]
[Fixed Price Offering]
The Notes are being purchased
by (the
Underwriter), as principal, at the Public Offering
Price set forth on the cover page hereof less an underwriting
discount equal to % of the
principal amount of the Notes.
[Variable Price Offering]
The Notes are being purchased
by (the
Underwriter), as principal, at a purchase price
of % of the aggregate principal
amount of the Notes. The Underwriter has advised the Company
that the Underwriter proposed to offer the Notes from time to
time for sale in negotiated transactions or otherwise, at prices
determined at the time of sale.
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The Company has agreed to indemnify the Underwriter against and
contribute toward certain liabilities, including liability under
the Securities Act of 1933, as amended. |
[Agented]
is
acting as agent in connection with the distribution of the
Notes. The Agent will receive a selling commission equal
to % of the principal amount of
the Notes.
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* |
Notes listed, or admitted to trading on or by, one or more stock
exchange(s), competent authority(ies) and/or market(s) for the
purposes of the European Unions Directive 2003/71/ EC will
be issued in minimum denominations
of 1,000 or
its equivalent in other currencies. |
B-2
PROSPECTUS
General Electric Capital Corporation
Debt Securities
Warrants to Purchase Debt Securities
Preferred Stock
Guarantees, Letters of Credit and
Promissory Notes or Loan
Obligations,
Including Interests Therein
General Electric Capital Corporation may offer from time to time:
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unsecured debt securities; |
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warrants to purchase any of the debt securities; |
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variable cumulative preferred stock, par value $100 per
share, which may be issued in the form of depositary shares
evidenced by depositary receipts; |
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preferred stock, par value $.01 per share, which may be
issued in the form of depositary shares evidenced by depositary
receipts; and |
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unsecured guarantees, direct-pay letters of credit and
indebtedness evidenced by promissory notes or loan obligations,
including in each case interests therein. |
We 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.
These securities have not been approved by the SEC or any
State securities commission, nor have these organizations
determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 17, 2005
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration
statement that we have filed with the Securities and Exchange
Commission (the SEC). By using a shelf registration
statement, we may sell, from time to time, in one or more
offerings, any combination of the securities described in this
prospectus in a U.S. dollar amount that does not exceed the
amount registered. For further information about our business
and the securities, you should refer to the registration
statement and its exhibits. The exhibits to our registration
statement contain the full text of certain contracts and other
important documents we have summarized in this prospectus. Since
these summaries may not contain all the information that you may
find important in deciding whether to purchase the securities we
offer, you should review the full text of these documents. The
registration statement can be obtained from the SEC as indicated
under the heading Where You Can Get More Information on
GECC.
This prospectus only provides you with a general description of
the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that contains specific
information about the terms of those securities. The prospectus
supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any
prospectus supplement together with the additional information
described below under the heading Where You Can Get More
Information on GECC.
You should rely only on the information incorporated by
reference or provided in this prospectus and the prospectus
supplement. We have authorized no one to provide you with
different information. We are not making an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or the
prospectus supplement is accurate as of any date other than the
date on the front of the document.
References in this prospectus to GECC,
we, us and our are to
General Electric Capital Corporation.
WHERE YOU CAN GET MORE
INFORMATION ON GECC
GECC files annual, quarterly and current reports with the SEC.
You may obtain any document we file with the SEC at the
SECs Public Reference Room in Washington, D.C. You
may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are
also accessible through the Internet at the SECs Web site
at http://www.sec.gov.
The SEC allows us to incorporate by reference into
this prospectus the information in documents we file with it,
which means that we can disclose important information to you by
referring you to those documents. The information incorporated
by reference is considered to be a part of this prospectus, and
information that we file later with the SEC will automatically
update and supersede information contained in documents filed
earlier with the SEC or contained in this prospectus. We
incorporate by reference in this prospectus the documents listed
below and any future filings that we make with the SEC under
Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended, until we sell all the
securities that may be offered by this prospectus (including,
without limitation, filings made after the date of this
Amendment No. 1 and before the effectiveness of the
registration statement); provided, however, that we are not
incorporating any information furnished under either
Item 2.02 or Item 7.01 of any Current Report on
Form 8-K unless, and except to the extent, specified in any
such Current Report on Form 8-K:
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(i) |
GECCs Annual Report on Form 10-K, as amended by
amendment no. 1 on Form 10-K/ A, for the year ended
December 31, 2004; |
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(ii) |
GECCs Quarterly Report on Form 10-Q for the quarter
ended March 31, 2005; and |
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(iii) |
GECCs Current Report on Form 8-K filed on May 6,
2005. |
You may request a copy of these filings at no cost. Requests
should be directed to David P. Russell, Senior Counsel,
Corporate Treasury and Assistant Secretary, General Electric
Capital Corporation, 260 Long Ridge Road, Stamford, Connecticut
06927, Telephone No. (203) 357-4000.
2
THE COMPANY
General Electric Capital Corporation was incorporated in 1943 in
the State of New York under the provisions of the New York
Banking Law relating to investment companies, as successor to
General Electric Contracts Corporation, which was formed in
1932. Until November 1987, our name was General Electric Credit
Corporation. On July 2, 2001, we changed our state of
incorporation to Delaware. All of our outstanding common stock
is owned by General Electric Capital Services, Inc. (GE
Capital Services), formerly General Electric Financial
Services, Inc., the common stock of which is in turn wholly
owned directly or indirectly by General Electric Company
(GE Company). Financing and services offered by us
are diversified, a significant change from the original business
of GECC, that is, financing distribution and sale of consumer
and other GE Company products. GE Company manufactures few of
the products financed by us.
We operate in four key operating segments: GE Commercial
Finance, GE Consumer Finance, GE Insurance and GE Equipment and
Other Services. These operations are subject to a variety of
regulations in their respective jurisdictions.
Our services are offered primarily within the United States,
Canada, Europe and the Pacific Basin. GECCs principal
executive offices are at 260 Long Ridge Road, Stamford,
Connecticut 06927-1600 (telephone number (203) 357-4000).
At December 31, 2004, our employment totaled approximately
76,300.
Consolidated Ratio of Earnings to Fixed Charges
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Year Ended December 31, |
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Three Months |
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2001 |
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2002 |
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2003 |
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2004 |
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Ended |
2000 |
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(Restated) |
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(Restated) |
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(Restated) |
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(Restated) |
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March 31, 2005 |
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1.52 |
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1.73 |
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1.66 |
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1.86 |
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1.89 |
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1.74 |
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Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
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Year Ended December 31, |
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Three Months |
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2001 |
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2002 |
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2003 |
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2004 |
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Ended |
2000 |
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(Restated) |
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(Restated) |
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(Restated) |
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(Restated) |
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March 31, 2005 |
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1.50 |
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1.71 |
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1.65 |
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1.85 |
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1.88 |
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1.73 |
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For purposes of computing the consolidated ratios of earnings to
fixed charges and earnings to combined fixed charges and
preferred stock dividends, earnings consist of net earnings
adjusted for the provision for income taxes, minority interest,
interest capitalized (net of amortization) and fixed charges.
Fixed charges consist of interest on all indebtedness and
one-third of rentals, which we believe is a reasonable
approximation of the interest factor of such rentals.
USE OF PROCEEDS
Unless otherwise specified in the prospectus supplement
accompanying this prospectus, we will add the net proceeds from
the sale of the securities to which this prospectus and the
prospectus supplement relate to our general funds, which we will
use for financing our operations. We can conduct additional
financings at any time.
3
PLAN OF DISTRIBUTION
We may sell our securities through agents, underwriters, dealers
or directly to purchasers.
We may designate agents to solicit offers to purchase our
securities.
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We will name any agent involved in offering or selling our
securities, and any commissions that we will pay to the agent,
in our prospectus supplement. |
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Unless we indicate otherwise in our prospectus supplement, our
agents will act on a best efforts basis for the period of their
appointment. |
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Our agents may be deemed to be underwriters under the Securities
Act of 1933 of any of our securities that they offer or sell. |
We may use an underwriter or underwriters in the offer or sale
of our securities.
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If we use an underwriter or underwriters, we will execute an
underwriting agreement with the underwriter or underwriters at
the time that we reach an agreement for the sale of our
securities. |
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We will include the names of the specific managing underwriter
or underwriters, as well as any other underwriters, and the
terms of the transactions, including the compensation the
underwriters and dealers will receive, in our prospectus
supplement. |
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The underwriters will use our prospectus supplement to sell our
securities. |
We may use a dealer to sell our securities.
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If we use a dealer, we, as principal, will sell our securities
to the dealer. |
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The dealer will then sell our securities to the public at
varying prices that the dealer will determine at the time it
sells our securities. |
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We will include the name of the dealer and the terms of our
transactions with the dealer in our prospectus supplement. |
We may solicit directly offers to purchase our securities, and
we may directly sell our securities to institutional or other
investors. We will describe the terms of our direct sales in our
prospectus supplement.
We may indemnify agents, underwriters, and dealers against
certain liabilities, including liabilities under the Securities
Act of 1933. Our agents, underwriters, and dealers, or their
affiliates, may be customers of, engage in transactions with or
perform services for us, in the ordinary course of business.
We may authorize our agents and underwriters to solicit offers
by certain institutions to purchase our securities at the public
offering price under delayed delivery contracts.
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If we used delayed delivery contracts, we will disclose that we
are using them in the prospectus supplement and will tell you
when we will demand payment and delivery of the securities under
the delayed delivery contracts. |
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These delayed delivery contracts will be subject only to the
conditions that we set forth in the prospectus supplement. |
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We will indicate in our prospectus supplement the commission
that underwriters and agents soliciting purchases of our
securities under delayed contracts will be entitled to receive. |
Unless otherwise provided in the prospectus supplement
accompanying this prospectus, neither the support obligations
nor the interests therein will be offered or sold separately
from the underlying securities to which they relate. The
underlying securities will be offered and sold under a separate
offering document.
4
NASD
Regulations
GECC Markets Group, Inc. is an affiliate of GECC and may
participate as an underwriter in the distribution of securities
issued pursuant to this prospectus. Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers,
Inc. imposes certain requirements when an NASD member such as
GECC Capital Markets Group, Inc. distributes an affiliated
companys securities. As a result, we will conduct any
offering in which GECC Capital Markets Group, Inc. acts as an
underwriter in compliance with the applicable requirements of
Rule 2720.
The maximum compensation we will pay to underwriters in
connection with any offering of the securities will not exceed
8% of the maximum proceeds of such offering. All post-effective
amendments or prospectus supplements disclosing the actual price
and selling terms of each offering of the securities will be
submitted to the NASD Corporate Financing Department at the same
time they are filed with the SEC. The NASD Corporate Financing
Department will be advised if, subsequent to the filing of any
offering of the securities, any of our 5% or greater
shareholders is or becomes an affiliate or associated person of
an NASD member participating in the distribution of such
securities. All NASD members participating in offerings of the
securities understand the requirements that have to be met in
connection with SEC Rule 415 and Notice to Members 88-101.
SECURITIES OFFERED
Using this prospectus, we may offer senior or subordinated debt
securities (collectively, the debt securities),
warrants to purchase debt securities, variable cumulative
preferred stock and preferred stock. In addition, we may issue
guarantees, direct-pay letters of credit and indebtedness
evidenced by promissory notes or loan obligations, including
interests therein. We registered these securities with the SEC
using a shelf registration statement. This
shelf registration statement allows us to offer any
combination of these securities. Each time we offer securities,
we must provide a prospectus supplement that describes the
specific terms of the securities. The prospectus supplement may
also provide new information or update the information in the
prospectus.
DESCRIPTION OF DEBT SECURITIES
General
The description below of the general terms of the debt
securities issued under this prospectus will be supplemented by
the more specific terms in the applicable prospectus supplement.
The senior debt securities will be issued pursuant to an Amended
and Restated Indenture, between us and JPMorgan Chase Bank, N.A.
(formerly known as The Chase Manhattan Bank), dated as of
February 27, 1997, as supplemented by a Supplemental
Indenture dated as of May 3, 1999, a Second Supplemental
Indenture dated as of July 2, 2001 and a Third Supplemental
Indenture dated November 22, 2002 and pursuant to an
Amended and Restated Indenture, between us and JPMorgan Chase
Bank, N.A., dated as of February 28, 1997, as supplemented
by a First Supplemental Indenture dated as of July 2, 2001
(collectively, the senior indentures). The
subordinated debt securities will be issued pursuant to a
Subordinated Debt Indenture to be entered into between us and
JPMorgan Chase Bank, N.A. (the subordinated
indenture and, together with the senior indentures, the
indentures). None of the indentures limits the
amount of debt securities or other unsecured debt which we may
issue.
In addition to the following description of the debt securities,
you should refer to the detailed provisions of each indenture,
copies of which are filed as exhibits to the registration
statement.
The prospectus supplement will specify the following terms of
such issue of debt securities:
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the designation, the aggregate principal amount and the
authorized denominations if other than the denominations set
forth in the applicable indenture; |
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the percentage of their principal amount at which the debt
securities will be issued; |
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the date or dates on which the debt securities will mature; |
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whether the debt securities will be senior or subordinated
obligations; |
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if the debt securities are subordinated debt securities, whether
the subordination provisions summarized below or different
subordination provisions will apply; |
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any deletions or modifications of or additions to the Events of
Default described below or the covenants of GECC set forth in
the applicable indenture; |
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the currency, currencies or currency units in which we will make
payments on the debt securities; |
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the rate or rates at which the debt securities will bear
interest, if any, or the method of determination of such rate or
rates; |
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the date or dates from which such interest, if any, shall
accrue, the dates on which such interest, if any, will be
payable and the method of determining holders to whom interest
shall be payable; |
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the prices, if any, at which, and the dates at or after which,
we may or must repay, repurchase or redeem the debt securities; |
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the exchanges, if any, on which the debt securities may be
listed; |
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the trustee under the indenture pursuant to which the debt
securities are to be issued. (Sections 2.02 and 2.02A.
Section references refer to the sections in the applicable
indenture.); and |
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any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture. |
Unless otherwise specified in the prospectus supplement, we will
compute interest payments on the basis of a 360-day year
consisting of twelve 30-day months. (Section 2.10).
Some of the debt securities may be issued as discounted debt
securities to be sold at a substantial discount below their
stated principal amount. The prospectus supplement will contain
any Federal income tax consequences and other special
considerations applicable to discounted debt securities.
The indentures do not contain any provisions that:
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limit our ability to incur indebtedness, or |
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provide protection in the event GE Company, as sole indirect
stockholder of GECC, causes GECC to engage in a highly leveraged
transaction, reorganization, restructuring, merger or similar
transaction. |
Claims of our subsidiaries creditors generally will have
priority with respect to the assets and earnings of the
subsidiaries over the claims of our creditors, including holders
of the debt securities. The debt securities, therefore, will be
effectively subordinated to creditors, including trade creditors
of our subsidiaries.
Payment and Transfer
Unless we otherwise state in a prospectus supplement, we will
issue debt securities only as registered securities, which means
that the name of the holder will be entered in a register which
will be kept by the Trustee or another agent of GECC. Unless we
state otherwise in a prospectus supplement, we will make
principal and interest payments at the office of the paying
agent or agents we name in the prospectus supplement or by
mailing a check to such holder at the address specified in the
register.
Unless we describe other procedures in a prospectus supplement,
a registered holder will be able to transfer registered debt
securities at the office of the transfer agent or agents we name
in the prospectus supplement. The registered holder may also
exchange registered debt securities at the office of the
transfer agent for an equal aggregate principal amount of
registered debt securities of the same series having the same
maturity date, interest rate and other terms as long as the debt
securities are issued in authorized denominations.
6
Neither GECC nor the Trustee will impose any service charge for
any such transfer or exchange of a debt security, however, a
registered holder may be required to pay any taxes or other
governmental charges in connection with a transfer or exchange
of debt securities.
Global Notes, Delivery and Form
We may issue some or all of the debt securities in the form of
one or more Global Notes representing an entire issuance in
book-entry form. We will deposit each Global Note with a
depositary (a Depositary) or with a nominee for a
Depositary identified in the applicable prospectus supplement.
We will register each Global Note in the name of such Depositary
or nominee. Unless and until it is exchanged in whole or in part
for debt securities in definitive registered form, a Global Note
may not be transferred, except as a whole by the Depositary for
such Global Note to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor. For
purposes of this Prospectus, Global Note refers to
the Global Note or Global Notes representing an entire issue of
debt securities.
The specific terms of the depositary arrangement with respect to
any debt securities to be represented by a Global Note will be
described in the prospectus supplement.
Modification of the Indentures
In general, our rights and obligations and the rights of the
holders under the above-referenced indentures may be modified if
the holders of not less than
662/3%
in aggregate principal amount of the outstanding debt securities
of each series affected by the modification consent to it.
However, Section 10.02 of each indenture provides that,
unless each affected holder agrees, we cannot
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make any adverse change to any payment term of a debt security
such as: |
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extending the maturity date; |
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extending the date on which we have to pay interest or make a
sinking fund payment; |
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reducing the interest rate; |
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reducing the amount of principal we have to repay; |
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changing the currency in which we have to make any payment of
principal premium or interest; |
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modifying any redemption or repurchase right to the detriment of
the holder; and |
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impairing any right of a holder to bring suit for payment; |
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reduce the percentage of the aggregate principal amount of debt
securities needed to make any amendment to the indenture or to
waive any covenant or default; |
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make any change to the section of the indenture relating to
waivers of any past default; and |
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make any change to Section 10.02. |
However, if we and the Trustee agree, we can amend the
indentures without notifying any holders or seeking their
consent if the amendment does not materially and adversely
affect any holder.
Events of Default
Each indenture defines an Event of Default with
respect to any series of debt securities as any of the following:
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default in any payment of principal or premium, if any, on any
debt security of such series; |
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default for 30 days in payment of any interest, if any, on
any debt security of such series; |
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default in the making or satisfaction of any sinking fund
payment or analogous obligation on the debt securities of such
series; |
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default for 60 days after written notice to GECC in
performance of any other covenant in respect of the debt
securities of such series contained in such indenture; |
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a default, as defined, with respect to any other series of debt
securities outstanding under the relevant Indenture or as
defined in any other indenture or instrument evidencing or under
which GECC has outstanding any indebtedness for borrowed money,
as a result of which such other series or such other
indebtedness of GECC shall have been accelerated and such
acceleration shall not have been annulled within 10 days
after written notice thereof (provided, that the
resulting Event of Default with respect to such series of debt
securities may be remedied, cured or waived by the remedying,
curing or waiving of such other default under such other series
or such other indebtedness); or |
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certain events involving bankruptcy, insolvency or
reorganization. (Section 6.01). |
Each indenture requires us to deliver to the Trustee annually a
written statement as to the presence or absence of certain
defaults under the terms thereof. (Section 4.05). An Event
of Default under one series of debt securities does not
necessarily constitute an Event of Default under any other
series of debt securities. Each indenture provides that the
Trustee may withhold notice to the holders of any series of debt
securities issued thereunder of any default if the Trustee
considers it in the interest of such noteholders to do so
provided the Trustee may not withhold notice of default in the
payment of principal, premium, if any, or interest, if any, on
any of the debt securities of such series or in the making of
any sinking fund installment or analogous obligation with
respect to such series. (Section 6.08).
The senior indentures provide that if any Event of Default
occurs and is continuing with respect to any series of senior
debt securities, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the outstanding senior
debt securities of such series may declare the principal, or in
the case of discounted debt securities, a portion of the
principal amount, of all such senior debt securities to be due
and payable immediately. The subordinated indenture provides
that (i) if an Event of Default arising from a breach of
our covenants and agreements with respect to merger, sale or
conveyance or certain events involving bankruptcy, insolvency or
reorganization occurs and is continuing with respect to any
series of subordinated debt securities or (ii) when no
senior indebtedness as defined below under
Subordinated Debt Securities is outstanding, if an
Event of Default specified in (i) above or any other Event
of Default occurs with respect to a series of subordinated debt
securities, then, in either case, the Trustee or the holders of
not less than 25% in aggregate principal amount of the
outstanding subordinated debt securities of such series may
declare the principal, or in the case of discounted debt
securities, a portion of the principal amount, of all such
subordinated debt securities to be due and payable immediately.
Under certain conditions such declaration may be annulled by the
holders of a majority in principal amount of such debt
securities then outstanding. The holders of a majority in
aggregate principal amount of such debt securities then
outstanding may also waive on behalf of all holders past
defaults with respect to a particular series of debt securities
except, unless previously cured, a default in payment of
principal, premium, if any, or interest, if any, on any of the
debt securities of such series, or the payment of any sinking
fund installment or analogous obligation on the debt securities
of such series. (Sections 6.01 and 6.07).
Other than the duties of a trustee during a default, the Trustee
is not obligated to exercise any of its rights or powers under
the indenture at the request, order or direction of any holders
of debt securities of any series issued thereunder unless such
holders shall have offered to the Trustee reasonable indemnity.
(Sections 7.01 and 7.02). Subject to such indemnification
provision, each indenture provides that the holders of a
majority in aggregate principal amount of the debt securities of
any series issued thereunder at the time outstanding shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee thereunder,
or exercising any trust or power conferred on such Trustee with
respect to the debt securities of such series. However, the
Trustee may decline to act if it determines that the proceedings
so directed would be illegal or involve it in any personal
liability. (Section 6.07).
8
Senior Debt Securities
The senior debt securities will be unsecured and will rank
equally with all of our other unsecured and unsubordinated
indebtedness.
Subordinated Debt Securities
The subordinated debt securities will be unsecured. The
subordinated debt securities will be subordinate in right of
payment to all senior indebtedness. (Section 14.01 of
subordinated indenture).
The subordinated indenture defines senior
indebtedness to mean:
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the principal of, premium, if any, and interest on all
indebtedness for money borrowed other than the subordinated debt
securities and any deferrals, renewals or extensions thereof; |
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obligations arising from any guaranty, letter of credit or
similar credit enhancement; and |
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obligations associated with derivative products such as interest
rate and foreign exchange rate swaps, forward sales of interests
in commodities, and similar arrangements. |
However, the term senior indebtedness will not
include:
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any liability for Federal, state, local or other taxes owed or
owing by us; |
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any accounts payable or other liability to trade creditors
(other than those obligations referenced in the last two bullet
points under the definition of senior indebtedness
above) arising in the ordinary course of business, including
instruments evidencing those liabilities; |
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any indebtedness, guarantee or obligation of ours which is
expressly subordinate or junior in right of payment in any
respect to any other indebtedness, guarantee or obligation of
ours; or |
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any obligations with respect to any capital stock. |
We use the term indebtedness for money borrowed to
include, without limitation, any obligation of ours for the
repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes, or other written instruments, and any
deferred obligation for the payment of the purchase price of
property or assets.
There is no limitation on our ability to issue additional senior
indebtedness. The senior debt securities constitute senior
indebtedness under the subordinated indenture.
Under the subordinated indenture, no payment may be made on the
subordinated debt securities and no purchase, redemption or
retirement of any subordinated debt securities may be made in
the event:
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any senior indebtedness is not paid when due, or |
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the maturity of any senior indebtedness is accelerated as a
result of a default, unless the default has been cured or waived
and the acceleration has been rescinded or that senior
indebtedness has been paid in full. |
In addition, while any senior indebtedness is outstanding,
subordinated debt securities can only be accelerated in the
event of an Event of Default arising from a breach of our
covenants and agreements with respect to merger, sale or
conveyance and certain events involving bankruptcy, insolvency
or reorganization, and the right to receive payment through an
acceleration will not be available for any other Events of
Default including, without limitation, failure to pay principal,
interest or premium on the subordinated debt securities.
(Section 6.01 of the subordinated indenture).
In the event we pay or distribute our assets to creditors upon a
total or partial liquidation, dissolution or reorganization of
us or our property, the holders of senior indebtedness will be
entitled to receive payment in full of the senior indebtedness
before the holders of subordinated debt securities are entitled
to receive any payment and until the senior indebtedness is paid
in full, any payment or distribution to which holders of
subordinated debt securities would be entitled but for the
subordination provisions of the subordinated indenture will be
made to holders of the senior indebtedness. (Section 14.02
of subordinated indenture).
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If a distribution is made to holders of subordinated debt
securities that, due to the subordinated provisions, should not
have been made to them, those holders of subordinated debt
securities are required to hold it in trust for the holders of
senior indebtedness, and pay it over to them as their interests
may appear. (Section 14.05 of subordinated indenture).
As a result of the subordination provisions contained in the
subordinated indenture, in the event of default or insolvency,
our creditors who are holders of senior indebtedness are likely
to recover more, ratably, than the holders of subordinated debt
securities. It is important to keep this in mind if you decide
to hold our subordinated debt securities.
Concerning the Trustee
JPMorgan Chase Bank, N.A. acts, or will act, as the case may be,
as Trustee under (i) an Amended and Restated Indenture with
us dated as of February 27, 1997, as supplemented by a
Supplemental Indenture with us dated as of May 3, 1999, a
Second Supplemental Indenture with us dated as of July 2,
2001, and a Third Supplemental Indenture with us dated
November 22, 2002, (ii) an Amended and Restated
Indenture with us dated as of February 28, 1997, as
supplemented by a First Supplemental Indenture with us dated as
of July 2, 2001, (iii) a Subordinated Debt Indenture
to be entered into with us, (iv) an Indenture with us dated
as of June 3, 1994, as amended and supplemented, and
(v) an Indenture with us dated as of October 1, 1991,
as amended and supplemented. JPMorgan Chase Bank, N.A. also acts
as Trustee under certain other indentures with us. A number of
our series of senior unsecured notes are presently outstanding
under each of the indentures referred to in clauses (i),
(ii), (iv) and (v) above. Debt securities may be
issued under any of the indentures referred to in
clauses (i), (ii) and (iii) above.
GECC, GE Company and other affiliates of GE Company maintain
various commercial and investment banking relationships with
JPMorgan Chase Bank, N.A. and its affiliates in their ordinary
course of business.
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DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase debt securities under this
prospectus either alone or together with debt securities. In
addition to this summary, you should refer to the detailed
provisions of the specific warrant agreement for complete terms
of the warrants and the warrant agreement. Each warrant
agreement will be between GECC and a banking institution
organized under the laws of the United States or a state. A form
of warrant agreement was filed as an exhibit to the Registration
Statement.
The warrants will be evidenced by warrant certificates. Unless
otherwise specified in the prospectus supplement, the warrant
certificates may be traded separately from the debt securities,
if any, with which the warrant certificates were issued. Warrant
certificates may be exchanged for new warrant certificates of
different denominations at the office of an agent that we will
appoint. Until a warrant is exercised, the holder of a warrant
does not have any of the rights of a debtholder and is not
entitled to any payments on any debt securities issuable upon
exercise of the warrants.
We may issue warrants in one or more series. The prospectus
supplement accompanying this prospectus relating to the
particular series of warrants will contain terms of the
warrants, including:
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the title and the aggregate number of warrants; |
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the debt securities for which each warrant is exercisable; |
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the date or dates on which such warrants will expire; |
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the price or prices at which such warrants are exercisable; |
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the currency or currencies in which such warrants are
exercisable; |
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the periods during which and places at which such warrants are
exercisable; |
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the terms of any mandatory or optional call provisions; |
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the price or prices, if any, at which the warrants may be
redeemed at the option of the holder or will be redeemed upon
expiration; |
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the identity of the warrant agent; and |
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the exchanges, if any, on which such warrants may be listed. |
Exercise of Warrants
You may exercise warrants by payment to our warrant agent of the
exercise price, in each case in such currency or currencies as
are specified in the warrant, and giving your identity and the
number of warrants to be exercised. Once you pay our warrant
agent and deliver the properly completed and executed warrant
certificate to our warrant agent at the specified office, our
warrant agent will, as soon as practicable, forward notes to you
in authorized denominations. If you exercise less than all of
the warrants evidenced by your warrant certificate, you will be
issued a new warrant certificate for the remaining amount of
warrants.
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DESCRIPTION OF THE PREFERRED STOCK
General
Our Board of Directors has authorized the issuance of preferred
stock. The terms of the preferred stock will be stated and
expressed in a resolution or resolutions to be adopted by our
Board of Directors (or any duly authorized committee of the
Board of Directors) consistent with our restated certificate of
incorporation. The preferred stock, when issued and sold, will
be fully paid and non-assessable and will have no pre-emptive
rights.
As of the date of this prospectus, our capital stock as
authorized by our sole common stockholder consists of:
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4,166,000 shares of Common Stock, par value $14.00 per
share, |
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33,000 shares of Variable Cumulative Preferred Stock, par
value $100 per share, and |
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750,000 shares of Preferred Stock, par value $.01 per
share. |
In order to distinguish between our two classes of preferred
stock, we will refer to the first class of our preferred stock
as Variable Cumulative Preferred Stock and to the
second class as our second class of preferred stock.
When we refer to both classes we use the phrase preferred
stock. 3,985,403 shares of Common Stock and
26,000 shares of Variable Cumulative Preferred Stock are
presently outstanding. There are no shares of our second class
of preferred stock currently outstanding. Each Series of
Variable Cumulative Preferred Stock ranks equally with each
other Series of Variable Cumulative Preferred Stock as to
dividend and liquidation preference.
We will describe the particular terms of any series of preferred
stock being offered by use of this prospectus in the prospectus
supplement relating to that series of preferred stock. Those
terms may include:
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the designation, number of shares and stated value per share; |
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the amount of liquidation preference; |
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the initial public offering price at which shares of such series
of preferred stock will be sold; |
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the dividend rate or rates (or method of determining the
dividend rate); |
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the dates on which dividends shall be payable, the date from
which dividends shall accrue and the record dates for
determining the holders entitled to such dividends; |
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any redemption or sinking fund provisions; |
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any voting rights; |
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any conversion or exchange provisions; |
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any provisions to issue the shares of such series as depositary
shares evidenced by depositary receipts; and |
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any additional dividend, redemption, liquidation or other
preferences or rights and qualifications, limitations or
restrictions thereof. |
If the terms of any series of preferred stock being offered
differ from the terms set forth below, we will also disclose
those terms in the prospectus supplement relating to that series
of preferred stock. In addition to this summary, you should
refer to our restated certificate of incorporation for the
complete terms of preferred stock being offered.
We will specify the transfer agent, registrar, dividend
disbursing agent and redemption agent for each series of
preferred stock in the prospectus supplement relating to that
series.
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Dividend Rights
If you purchase preferred stock being offered by this
prospectus, you will be entitled to receive, when, and as
declared by our board of directors, cash or other dividends at
the rates, or as determined by the method described in, and on
the dates set forth in, the prospectus supplement. Dividend
rates may be fixed or variable or both. Different series of
preferred stock may be entitled to dividends at different
dividend rates or based upon different methods of determination.
We will pay each dividend to the holders of record as they
appear on our stock books on record dates determined by the
board of directors. Dividends on any series of the preferred
stock may be cumulative or noncumulative, as specified in the
prospectus supplement. If the board of directors fails to
declare a dividend on any series of preferred stock for which
dividends are noncumulative, then your right to receive that
dividend will be lost, and we will have no obligation to pay the
dividend for that dividend period, whether or not we declare
dividends for any future dividend period. Dividends on the
shares of preferred stock will accrue from the date on which we
initially issue such series of preferred stock or as otherwise
set forth in the prospectus supplement relating to such series.
The prospectus supplement relating to a series of preferred
stock will describe any adjustments to be made, if any, to the
dividend rate in the event of certain amendments to the Internal
Revenue Code of 1986, as amended, with respect to the
dividends-received deduction.
In particular, the dividend payment dates on the Variable
Cumulative Preferred Stock will be the last day of each dividend
period, regardless of its length, and, in the case of dividend
periods of more than 99 days, on the following additional
dates:
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if such Dividend Period is from 100 to 190 days, on the
91st day; |
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if such Dividend Period is from 191 to 281 days, on the
91st and 182nd days; |
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if such Dividend Period is from 282 to 364 days, on the
91st, 182nd and 273rd days; and |
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if such Dividend Period is from two to 30 years, on
January 15, April 15, July 15 and October 15 of each
year. |
In the event a dividend payment date falls on a day that is not
a business day, then the dividend payment date shall be the
business day next succeeding such date. After the initial
dividend period, each subsequent dividend period will begin on a
dividend payment date and will end 49 days later. However,
we may elect subsequent dividend periods that are longer than
49 days. We will notify you of any such election and follow
the procedures that will be set forth in a prospectus supplement
for the series of Variable Cumulative Preferred Stock. After the
initial dividend period, the dividend rates on the Variable
Cumulative Preferred Stock will be determined pursuant to an
auction method, subject to any maximum or minimum interest rate,
which will be described in the prospectus supplement relating to
such series of Variable Cumulative Preferred Stock.
The dividend payment dates and the dividend periods with respect
to our second class of preferred stock will be described in the
prospectus supplement relating to such series of our second
class of preferred stock.
We may not declare any dividends on any shares of common stock,
or make any payment on account of, or set apart money for, a
sinking or other analogous fund for the purchase, redemption or
other retirement of any shares of common stock or make any
distribution in respect thereof, whether in cash or property or
in obligations or our stock, other than common stock unless
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full cumulative dividends shall have been paid or declared and
set apart for payment on all outstanding shares of preferred
stock and other classes and series of our preferred
stock and |
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we are not in default or in arrears with respect to any sinking
or other analogous fund or other agreement for the purchase,
redemption or other retirement of any shares of our preferred
stock. |
In the event we have outstanding shares of more than one series
of our preferred stock ranking equally as to dividends and
dividends on one or more of such series of preferred stock are
in arrears, we are required to make dividend payments ratably on
all outstanding shares of such preferred stock in proportion to
the respective amounts of dividends in arrears on all such
preferred stock to the date of such dividend payment.
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You will not be entitled to any dividend, whether payable in
cash, property or stock, in excess of full cumulative dividends
on shares of the preferred stock you own. No interest, or sum of
money in lieu of interest, shall be payable in respect of any
dividend payment or payments which may be in arrears.
Liquidation Rights
In the event of our liquidation, either voluntary or
involuntary, dissolution or winding-up, we will be required to
pay the liquidation preference specified in the prospectus
supplement relating to those shares of preferred stock, plus
accrued and unpaid dividends, before we make any payments to
holders of our common stock or any other class of our stock
ranking junior to that preferred stock. If we do not have
sufficient assets to pay the liquidation preference, plus
accrued and unpaid dividends, on all classes of preferred stock
that rank equally upon liquidation, we will pay holders of the
preferred stock proportionately based on the full amount to
which they are entitled. Other than their claims to the
liquidation preference and accrued and unpaid dividends, holders
of preferred stock will have no claim to any of our other
remaining assets. Neither the sale of all or substantially all
our property or business nor a merger or consolidation by us
with any other corporation will be considered a dissolution,
liquidation or winding-up of our business or affairs, if that
transaction does not impair the voting power, preferences or
special rights of the holders of shares of preferred stock.
Voting Rights
Holders of our common stock are entitled to one vote per share
on all matters which arise at any meeting of shareholders.
Holders of preferred stock being offered by this prospectus will
not be entitled to vote, except as set forth below, in a
prospectus supplement or as otherwise required by law.
The holders of Variable Cumulative Preferred Stock are not
entitled to vote except as required by law or as set forth in a
prospectus supplement. However, we may not alter any of the
preferences, privileges, voting powers or other restrictions or
qualifications of a series of Variable Cumulative Preferred
Stock in a manner substantially prejudicial to the holders
thereof without the consent of the holders of at least
662/3%
of the total number of shares of such series.
With respect to our second class of preferred stock, in the
event that six quarterly dividends (whether or not consecutive)
payable on any series of our second class of preferred stock
shall be in arrears, the holders of each series of our second
class of preferred stock, voting separately as a class with all
other holders of preferred stock with equal voting rights, shall
be entitled at our next annual meeting of stockholders (and at
each subsequent annual meeting of stockholders), to vote for the
election of two of our directors, with the remaining directors
to be elected by the holders of shares of any other class or
classes or series of stock entitled to vote therefor. Until the
arrears in payments of all dividends which permitted the
election of such directors shall cease to exist, any director
who has been so elected may be removed at any time, either with
or without cause, only by the affirmative vote of the holders of
the preferred stock at the time entitled to cast a majority of
the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that
purpose, and any vacancy thereby created may be filled by the
vote of such holders. The holders of shares of our second class
of preferred stock shall no longer be entitled to vote for
directors once the past due dividends have all been paid unless
dividends later become in arrears again. Once the past due
dividends have all been paid, then the directors elected by the
preferred stockholders will no longer be directors.
We may not take certain actions without the consent of at least
662/3%
of the shares of our second class of preferred stock, voting
together as a single class without regard to series. We need
such
662/3%
consent to:
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create any class or series of stock with preference as to
dividends or distributions of assets over any outstanding series
of our second class of preferred stock (other than a series
which has no right to object to such creation); or |
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alter or change the provisions of our restated certificate of
incorporation so as to adversely affect the voting power,
preferences or special rights of the holders of shares of our
second class of preferred stock; provided, however, that if such
creation or such alteration or change would adversely affect the |
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voting power, preferences or special rights of one or more, but
not all, series of our second class of preferred stock at the
time outstanding, consent of the holders of shares entitled to
cast at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so
affected, voting as a class, shall be required in lieu of
the consent of allholders of two-thirds of our second
class of preferred stock at the time outstanding. |
The prospectus supplement relating to a series of preferred
stock will further describe the voting rights, if any, including
the number of or proportional votes per share.
Redemption
The applicable prospectus supplement will indicate whether the
series of preferred stock being offered is subject to
redemption, in whole or in part, whether at our option or
mandatorily or otherwise and whether or not pursuant to a
sinking fund. The redemption provisions that may apply to a
series of preferred stock being offered, including the
redemption dates and the redemption prices for that series will
be set forth in the prospectus supplement.
If we fail to pay dividends on any series of preferred stock we
may not redeem that series in part and we may not purchase or
otherwise acquire any shares of such series other than by a
purchase or exchange offer made on the same terms to holders of
all outstanding shares of such series.
We may redeem the shares of any series of Variable Cumulative
Preferred Stock out of legally available funds therefore, as a
whole or from time to time in part:
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on the last day of any dividend period at a redemption price of
$100,000 per share, plus accumulated and unpaid dividends
to the date fixed for redemption; and |
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in the case of shares of Variable Cumulative Preferred Stock
with a dividend period equal to or more than two years, on any
dividend payment date for such shares at redemption prices (but
not less than $100,000 per share) determined by us prior to
the commencement of such dividend period plus accumulated and
unpaid dividends to the date set forth for redemption. |
Conversion Rights
No series of preferred stock will be convertible into our common
stock.
DESCRIPTION OF SUPPORT OBLIGATIONS AND INTERESTS THEREIN
General
Support obligations issued under this prospectus may include
guarantees, letters of credit and promissory notes or loan
obligations that are issued in connection with, and as a means
of underlying credit support for, any part of a fixed or
contingent payment obligation of primary securities issued by
third parties. The issuers of the primary securities may or may
not be affiliated with us. A holder of a primary security will
also hold uncertificated interests in the related support
obligation, representing the credit enhancement of the
holders primary security afforded by the related support
obligation.
The terms and conditions of any support obligations and related
interests will be determined by the terms and conditions of the
related underlying securities, and may vary from the general
descriptions set forth below. A complete description of the
terms and conditions of any support obligations and related
interests issued pursuant to this prospectus will be set forth
in the accompanying prospectus supplement.
Unless otherwise specified in the applicable prospectus
supplement, any support obligations and related interests will
be unsecured and will rank equally and ratably with all of our
other unsecured and unsubordinated indebtedness. The terms of a
particular support obligation may provide that a different
support obligation may be substituted therefor, upon terms and
conditions described in the applicable prospectus supplement,
provided that such substitution is carried out in conformity
with the Securities Act of 1933 and the rules and regulations
thereunder. Unless otherwise specified in the accompanying
prospectus supplement,
15
each support obligation will be governed by the laws of the
State of New York. Neither the Support Indenture (as defined
hereinafter) (with respect to promissory notes and loan
obligations) nor any other document or instrument (with respect
to other forms of support obligations) will (i) limit the
amount of support obligations or interests that may be issued,
or (ii) contain any provisions that limit our ability to
incur indebtedness or that afford holders of support obligations
or interests protection in the event GE Company, as our ultimate
stockholder, causes us to engage in a highly leveraged
transaction, reorganization, restructuring, merger or similar
transaction.
Guarantees
Any guarantees that we issue from time to time under this
prospectus for the benefit of holders of specified underlying
securities will include the following terms and conditions, plus
any additional terms specified in the accompanying prospectus
supplement.
The guarantee will provide that we unconditionally guarantee the
due and punctual payment of the principal, interest (if any),
premium (if any) and all other amounts due under the applicable
underlying securities when the same shall become due and
payable, whether at maturity, pursuant to mandatory or optional
prepayments, by acceleration or otherwise, in each case after
any applicable grace periods or notice requirements, according
to the terms of the applicable underlying securities. Any
guarantee shall be unconditional irrespective of the validity or
enforceability of the applicable underlying security, any change
or amendment thereto or any other circumstances that may
otherwise constitute a legal or equitable discharge or defense
of a guarantor. However, we will not waive presentment or demand
of payment or notice with respect to the applicable underlying
security unless otherwise provided in the accompanying
prospectus supplement.
We shall be subrogated to all rights of the issuer of the
applicable underlying securities in respect of any amounts paid
by us pursuant to the provisions of a guarantee. The guarantee
shall continue to be effective or reinstated, as the case may
be, if at any time any payment made by the issuer of the
applicable underlying security is rescinded or must otherwise be
returned upon the insolvency, bankruptcy or reorganization of
GECC, the issuer of the applicable underlying security or
otherwise.
Letters of Credit
The direct-pay letters of credit we issue from time to time
under this prospectus relating to specified underlying
securities shall include the following terms and conditions,
plus any additional terms specified in the accompanying
prospectus supplement.
Any letter of credit will be our direct-pay obligation issued
for the account of the holders of the applicable underlying
securities or, in certain cases, an agent acting on behalf of
the issuer of the applicable underlying securities or a trustee
acting on behalf of the holders. The letter of credit will be
issued in an amount that corresponds to principal and, if
applicable, interest and other payments payable with respect to
the applicable underlying securities. Drawings under the letter
of credit will reduce the amount available under the letter of
credit, but drawings of a recurring nature (such as interest)
will automatically be reinstated following the date of repayment
provided that the letter of credit has not otherwise expired.
The letter of credit will expire at a date and time specified in
the accompanying prospectus supplement, and will also expire
upon the earlier occurrence of certain events, as described in
the accompanying prospectus supplement.
Promissory Notes or Loan Obligations
We may incur underlying indebtedness from time to time to an
issuer of primary securities, such indebtedness to be evidenced
by promissory notes, loan agreements or other evidences of
indebtedness. The purpose of issuing any such promissory note,
loan agreement or other indebtedness will be to enable us,
directly or indirectly, to provide funds for payment of the
primary securities by means of our repayment obligation as
evidenced by the promissory note, loan agreement or other
indebtedness. The promissory notes, loan agreements or other
indebtedness will provide that only the issuer of the primary
securities to which such
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promissory notes, loan agreements or other indebtedness relate
or the issuers assignee will be entitled to enforce such
promissory notes, loan agreements or other indebtedness against
us. Holders of the relevant primary securities will not have any
third party beneficiary or other rights under, or be entitled to
enforce, the relevant promissory notes, loan agreements or other
indebtedness. The terms and provisions of any such note, loan
agreement or other indebtedness, including principal amount,
provisions or interest and premium, if applicable, maturity,
prepayment provisions, if any, and identity of obligee, will be
described in the applicable prospectus supplement.
Indenture For Certain Support Obligations
Obligations that are issued in the form of promissory notes or
loan obligations, and the related interests, may be issued under
an indenture, dated as of June 3, 1994, between us and
JPMorgan Chase Bank, N.A. as successor trustee (the
Support Obligation Trustee), as supplemented by a
First Supplemental Indenture dated as of February 1, 1997
and a Second Supplemental Indenture dated as of July 2,
2001 (the Support Indenture). To the extent that the
following disclosure summarizes certain provisions of the
indenture, such summaries do not purport to be complete, and are
subject to, and are qualified in their entirety by reference to,
all the provisions of the Support Indenture, a form of which is
filed as an exhibit to the registration statement of which this
prospectus is a part.
The following is a summary of certain provisions which will
apply to any promissory notes or loan obligations issued
pursuant to the Support Indenture.
Modification: In general, our rights and obligations and
the rights of the holders under the indenture may be modified if
the holders of not less than
662/3%
in aggregate principal amount of the outstanding support
obligations of each series affected by the modification consent
to it. However, Section 10.2 of the Support Indenture
provides that, unless each affected holder agrees, we cannot:
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change the character of any support obligation from being
payable other than as provided in any related support obligation
agreement; |
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reduce the principal amount of a support obligation; |
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change the currency in which we have to make payment on a
support obligation to a currency other than United States
dollars; or |
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reduce the percentage of the aggregate principal amount of
support obligations needed to make any amendment to the
indenture. |
However, if we and the Support Obligation Trustee agree, we can
amend the Support Indenture without notifying any holders or
seeking their consent if the amendment does not materially and
adversely affect any holder.
Event of Default: Any event of default with respect to
any series of support obligations issued pursuant to the Support
Indenture is defined in the Support Indenture as being
(a) a default in any payment of principal or premium, if
any, or interest on any support obligation of such series in
accordance with the terms of the related credit support
agreement or (b) any other event of default as defined in
the related credit support agreement to the extent specifically
identified pursuant to Section 2.2 of the Support
Indenture. (Section 6.1). The Support Indenture requires us
to deliver to the Support Obligation Trustee annually a written
statement as to the presence or absence of certain Defaults
under the terms thereof. (Section 4.4). No event of default
with respect to a particular series of support obligations under
the Support Indenture necessarily constitutes an event of
default with respect to any other series of support obligations
issued thereunder or other series of support obligations not
entitled to the benefits of the Support Indenture.
The Support Indenture provides that during the continuance of an
event of default with respect to any series of support
obligations issued pursuant to the Support Indenture, either the
Support Obligation Trustee or the holders of 25% in aggregate
principal amount of the outstanding support obligations of such
series and the interests of such series (voting together as a
single class) may declare the principal of all such support
obligations to be due and payable immediately, but under certain
conditions such declaration may be annulled
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by the holders of a majority in principal amount of such support
obligations then outstanding. The Support Indenture provides
that past defaults with respect to a particular series of
support obligations issued under the Support Indenture (except,
unless theretofore cured, a default in payment of principal of,
or interest on any of the support obligations of such series)
may be waived on behalf of the holders of all support
obligations of such series by the holders of a majority in
principal amount of such support obligations then outstanding.
(Sections 6.1 and 6.7).
Subject to the provisions of the Support Indenture relating to
the duties of the Support Obligation Trustee in case an event of
default with respect to any series of support obligations issued
pursuant to the Support Indenture shall occur and be continuing,
the Support Obligation Trustee shall be under no obligation to
exercise any of its rights or powers under the Support Indenture
at the request, order or direction of any holders of support
obligations of any series issued thereunder unless such holders
shall have offered to the Support Obligation Trustee reasonable
indemnity. (Section 6.4). Subject to such indemnification
provision, the Support Indenture provides that the holders of a
majority in principal amount of the support obligations of any
series issued pursuant to the Support Indenture and the
interests of such series (voting together as a single class)
thereunder at the time outstanding shall have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Support Obligation Trustee, or
exercising any trust or power conferred on the Support
Obligation Trustee with respect to the support obligations of
such series, provided that the Support Obligation Trustee may
decline to follow any such direction if it has not been offered
reasonable indemnity therefor or if it determines that the
proceedings so directed would be illegal or involve it in any
personal liability. (Section 6.7).
Concerning the Support Obligation Trustee
JPMorgan Chase Bank, N.A., as successor to Mercantile-Safe
Deposit and Trust Company, acts as Support Obligation Trustee
under the Support Indenture. JPMorgan Chase Bank, N.A., also
acts as Trustee under several other indentures with us, pursuant
to which a number of series of unsecured notes of ours are
presently outstanding.
GECC, GE Company and other affiliates of GE Company maintain
various commercial and investment banking relationships with
JPMorgan Chase Bank, N.A., and its affiliates in their ordinary
course of business.
LEGAL OPINIONS
Unless otherwise specified in the prospectus supplement
accompanying this prospectus, Alan M. Green, General Counsel,
Corporate Treasury and Assistant Secretary of GECC will provide
an opinion for us regarding the validity of the securities and
Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017 will provide an opinion for the underwriters,
agents or dealers. Mr. Green beneficially owns or has
rights to acquire an aggregate of less than 0.01% of GE
Companys common stock.
EXPERTS
The consolidated financial statements and schedule of GECC as of
December 31, 2004 and 2003, and for each of the years in
the three-year period ended December 31, 2004, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2004
incorporated herein by reference from GECCs Annual Report
on Form 10-K/ A for the year ended December 31, 2004
have been so incorporated by reference herein in reliance upon
the reports, also incorporated by reference herein, of KPMG LLP,
an independent registered public accounting firm, and upon the
authority of said firm as experts in accounting and auditing.
The report of KPMG LLP on the financial statements and schedule
dated February 11, 2005, except as to the restatement
discussed in note 1 to the consolidated financial
statements which is as of May 5, 2005, refers to a
restatement of the consolidated financial statements.
18
The report of KPMG LLP on the financial statements and schedule
refers to a change in 2004 and 2003 in the method of accounting
for variable interest entities and a change in 2002 in the
method of accounting for goodwill and other intangible assets.
The report of KPMG LLP on managements assessment of the
effectiveness of internal control over financial reporting and
the effectiveness of internal control over financial reporting
as of December 31, 2004, which is dated February 11,
2005, except as to the fourth paragraph of Managements
Annual Report on Internal Control over Financial Reporting (as
restated), which is as of May 5, 2005, expresses an opinion
that General Electric Capital Corporation did not maintain
effective internal control over financial reporting as of
December 31, 2004 because of the effect of a material
weakness on the achievement of the objectives of the control
criteria and contains an explanatory paragraph that states that
management has identified and included in its revised assessment
the following material weakness as of December 31, 2004: a
failure to ensure the correct application of Statement of
Financial Accounting Standards No. 133 when certain
derivative transactions were entered into at General Electric
Capital Corporation prior to August 2003 and failure to correct
that error subsequently.
19
You
should rely only on the information contained in this document
or that we have referred you to. We have not authorized anyone
else to provide you with information that is different. We are
not making an offer of these notes in any state where the offer
is not permitted. The information in this document is current
only as of the date of this document, regardless of the time of
delivery of this document or any sale of the notes.
TABLE OF CONTENTS
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US$26,404,605,650
General Electric
Capital Corporation
Global Medium-Term Notes,
Series A, Due From 9 Months
to 60 Years From Date of Issue
PROSPECTUS SUPPLEMENT
August 24, 2005
Citigroup
Deutsche Bank Securities
GE Capital Markets, Inc.
Goldman, Sachs & Co.
JPMorgan
Lehman Brothers
Merrill Lynch & Co.
UBS Investment Bank