THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-36444
SUBJECT TO COMPLETION, DATED NOVEMBER 13, 2001
PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 30, 2000
$1,000,000,000
[FLEET BOSTON FINANCIAL LOGO]
FLEETBOSTON FINANCIAL CORPORATION
% Senior Notes due
------------------
The % senior notes will mature on . Interest on the
senior notes is payable semiannually on and of each year,
beginning . Interest will accrue from the date of issuance of the
senior notes. We may redeem the senior notes for the reasons described under
"Certain Terms of the Senior Notes -- Redemption for Tax Reasons" in this
prospectus supplement. There is no sinking fund. The senior notes are unsecured.
We will apply to have the senior notes listed on the Luxembourg Stock
Exchange in accordance with the rules of that exchange.
The senior notes are not deposits or other obligations of a bank and are
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency.
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS FLEETBOSTON(1)
--------- ------------- --------------
Per Note...................................... % % %
Total......................................... $ $ $
(1) Plus accrued interest, if any, from November , 2001.
Delivery of the senior notes, in book-entry form only, will be made on or
about November , 2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
------------------
CREDIT SUISSE FIRST BOSTON BEAR, STEARNS & CO. INC. FLEET SECURITIES, INC.
------------------
KEEFE, BRUYETTE & WOODS, INC. SANDLER O'NEILL & PARTNERS, L.P.
The date of this prospectus supplement is November , 2001.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
UPDATING INFORMATION.................. S-1
WHERE YOU CAN FIND MORE INFORMATION... S-2
FLEETBOSTON FINANCIAL CORPORATION..... S-5
DIRECTORS AND EXECUTIVE OFFICERS OF
FLEETBOSTON FINANCIAL CORPORATION... S-6
CAPITALIZATION OF FLEETBOSTON
FINANCIAL CORPORATION............... S-8
SELECTED CONSOLIDATED FINANCIAL DATA
OF FLEETBOSTON FINANCIAL
CORPORATION......................... S-11
PAGE
----
USE OF PROCEEDS....................... S-13
CERTAIN TERMS OF THE SENIOR NOTES..... S-13
MATERIAL UNITED STATES TAX
CONSIDERATIONS...................... S-19
UNDERWRITING.......................... S-22
OFFERING RESTRICTIONS................. S-23
NOTICE TO CANADIAN RESIDENTS.......... S-25
LEGAL OPINIONS........................ S-25
EXPERTS............................... S-26
LISTING AND GENERAL INFORMATION....... S-26
PROSPECTUS
ABOUT THIS PROSPECTUS................. 2
WHERE YOU CAN FIND MORE INFORMATION... 2
FORWARD-LOOKING STATEMENTS............ 4
FLEETBOSTON FINANCIAL CORPORATION..... 5
CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES....................... 5
USE OF PROCEEDS....................... 6
REGULATION AND SUPERVISION............ 6
RECENT LEGISLATION.................... 7
FUTURE LEGISLATION.................... 7
DESCRIPTION OF DEBT SECURITIES........ 7
GENERAL............................... 8
REGISTRATION AND TRANSFER............. 9
PAYMENT AND PLACE OF PAYMENT.......... 9
GLOBAL SECURITIES..................... 10
EVENTS OF DEFAULT..................... 10
MODIFICATION AND WAIVER............... 11
CONSOLIDATION, MERGER AND SALE OF
ASSETS.............................. 12
REGARDING THE TRUSTEE................. 12
INTERNATIONAL OFFERING................ 13
SENIOR DEBT SECURITIES................ 13
RESTRICTIVE COVENANTS................. 13
DEFEASANCE............................ 14
SUBORDINATED DEBT SECURITIES.......... 15
SUBORDINATION......................... 15
RESTRICTIVE COVENANTS................. 16
DESCRIPTION OF WARRANTS............... 17
OFFERED WARRANTS...................... 17
FURTHER INFORMATION IN PROSPECTUS
SUPPLEMENT.......................... 17
SIGNIFICANT PROVISIONS OF THE WARRANT
AGREEMENTS.......................... 18
PLAN OF DISTRIBUTION.................. 20
EXPERTS............................... 21
LEGAL OPINIONS........................ 21
------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
The terms "we," "us," "our," "FleetBoston" and similar terms refer to
FleetBoston Financial Corporation. The terms "you," "your" and similar terms
refer to the beneficial owner of the senior notes.
We will apply to list the senior notes on the Luxembourg Stock Exchange in
accordance with the rules of that Exchange. We cannot guarantee that listing
will be obtained on the Luxembourg Stock Exchange. Inquiries regarding our
listing status on the Luxembourg Stock Exchange should be directed to our
Luxembourg listing agent, Banque International a Luxembourg S.A., 69, route
d'Esch, L-2953 Luxembourg (the "Luxembourg listing agent").
This prospectus supplement and the accompanying prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to FleetBoston. We have taken reasonable care to ensure
that, subject to the following sentence, the information contained in this
prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in this prospectus supplement and the accompanying
prospectus is true and correct in all material respects and is not misleading in
any material respect as of the date of this prospectus supplement. We also
confirm, having made all reasonable inquiries, that to the best of our knowledge
and belief there are no other facts the omission of which would make any
statement in this prospectus supplement or in the accompanying prospectus
misleading in any material respect; we accept responsibility accordingly. We
have obtained the information in "Certain Terms of the Senior
Notes -- Book-Entry System" concerning The Depository Trust Company ("DTC"), the
Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme
("Clearstream, Luxembourg") and their respective book-entry systems from
prospectus language prepared by DTC, Euroclear and Clearstream, Luxembourg
describing book-entry-only issuance, and we take responsibility for having
correctly extracted that information from these sources in all material
respects, but we take no responsibility for the accuracy of the information
itself.
The Luxembourg Stock Exchange takes no responsibility for the contents of
this document, makes no representation as to its accuracy or completeness, and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this prospectus
supplement and the accompanying prospectus.
Copies of this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference in this prospectus supplement and the
accompanying prospectus will be available free of charge at the office of the
Luxembourg listing agent.
UPDATING INFORMATION
Information contained in this prospectus supplement updates and supersedes
information in the accompanying prospectus.
S-1
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers, among other securities, the offer and sale of the
senior notes offered by this prospectus supplement and accompanying prospectus.
The registration statement, including the attached exhibits and schedules,
contains additional relevant information about us. The rules and regulations of
the SEC allow us to omit certain information included in the registration
statement from this prospectus supplement and accompanying prospectus.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
Public Reference Room Northeast Regional Office Midwest Regional Office
450 Fifth Street, N.W. 233 Broadway 500 West Madison Street
Room 1024 New York, New York 10007 Suite 1400
Washington, D.C. 20549 Chicago, Illinois 60661-2511
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330.
The SEC also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is:
http://www.sec.gov
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005 and the Boston Stock Exchange, 100 Franklin Street, Boston,
Massachusetts 02110.
The SEC allows us to "INCORPORATE BY REFERENCE" information into this
prospectus supplement and accompanying prospectus. This means that we can
disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is considered
to be a part of this prospectus supplement and accompanying prospectus, except
for any information that is superseded by information that is included directly
in this document or in a more recent incorporated document.
This prospectus supplement and accompanying prospectus incorporate by
reference the documents listed below that we have previously filed with the SEC.
They contain important information about us and our financial condition.
S-2
SEC FILINGS PERIOD
----------- ------
Annual Report on Form 10-K.......................... Year ended December 31, 2000, as filed on
February 28, 2001
Quarterly Reports on Form 10-Q...................... Quarter ended March 31, 2001, as filed on May
15, 2001
Quarter ended June 30, 2001, as filed on
August 14, 2001
The description of FleetBoston common stock set
forth in the FleetBoston registration statement
filed by Industrial National Corporation
(predecessor to FleetBoston) on Form 8-B dated May
29, 1970, and any amendment or report filed for
the purpose of updating that description; and
Current Reports on Form 8-K......................... Filed:
-January 17, 2001
-March 1, 2001
-March 14, 2001
-April 17, 2001
-May 4, 2001
-July 18, 2001
-September 17, 2001
-September 26, 2001
-October 17, 2001
-October 19, 2001, as amended by a Form 8-K/A
filed October 23, 2001
S-3
We incorporate by reference additional documents that we may file with the
SEC between the date of this prospectus supplement and the date we complete our
offering of the securities to be issued under the registration statement or, if
later, the date on which any of our affiliates cease offering and selling these
securities. These documents include, among others, periodic reports, such as
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us, or from the SEC through the SEC's Internet world wide web
site at the address described above. Documents incorporated by reference are
available from us without charge, excluding any exhibits to those documents,
unless the exhibit is specifically incorporated by reference as an exhibit in
this prospectus supplement and accompanying prospectus. You can obtain documents
incorporated by reference in this prospectus supplement and accompanying
prospectus by requesting them in writing or by telephone from us at the
following address:
Investor Relations Department
FleetBoston Financial Corporation
P.O. Box 2016, MA DE 10034F
Boston, Massachusetts 02106-2016
(617) 434-7858
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, those
contained in this prospectus supplement and accompanying prospectus or in any of
the materials that we have incorporated into this prospectus supplement and
accompanying prospectus. If anyone does give you information of this sort, you
should not rely on it. If you are in a jurisdiction where offers to sell, or
solicitations of offers to purchase, the senior notes offered by this prospectus
supplement and the accompanying prospectus are unlawful, or if you are a person
to whom it is unlawful to direct these types of activities, then the offer
presented in this prospectus supplement and the accompanying prospectus does not
extend to you. The information contained in this prospectus supplement and the
accompanying prospectus speaks only as of the date of those documents unless the
information specifically indicates that another date applies.
S-4
FLEETBOSTON FINANCIAL CORPORATION
We are a diversified financial services company offering a comprehensive
array of financial solutions to approximately 20 million customers in more than
20 countries. Among our key lines of business are:
- Consumer and Investment Services -- includes domestic retail banking to
consumer and small business customers, community banking, student loan
processing, credit card services, and investment management and retail
brokerage services, including mutual funds and investments, retirement
planning, large institutional asset management and not-for-profit
investment services;
- Wholesale and Global Banking -- includes commercial finance, including
asset-based lending and leasing; international banking in key Latin
American markets; corporate banking, including specialized industry and
institutional lending; and middle market lending, including commercial
lending, government banking services, trade services and cash management;
and
- Capital Markets -- includes investment banking services, brokerage
market-making and principal investing.
On March 1, 2001, we completed our acquisition of Summit Bancorp, which was
accounted for as a pooling of interests. All financial information set forth or
incorporated by reference in this prospectus supplement and the accompanying
prospectus has been restated for all periods to give effect to the Summit
acquisition.
At June 30, 2001, our total assets on a consolidated basis were $202.1
billion, our consolidated total deposits were $124.8 billion and our
consolidated total stockholders' equity was $19.3 billion. Based on total assets
at June 30, 2001, we were the seventh largest financial holding company in the
United States.
We are organized under the laws of the State of Rhode Island with perpetual
existence. Our date of incorporation was March 16, 1970. Our principal office is
located at 100 Federal Street, Boston, Massachusetts 02110, and our telephone
number is (617) 434-2200.
S-5
DIRECTORS AND EXECUTIVE OFFICERS OF FLEETBOSTON FINANCIAL CORPORATION
BOARD OF DIRECTORS
Present members of our Board of Directors and their principal occupations
are:
Terrence Murray Chairman and Chief Executive Officer of FleetBoston
Financial Corporation
Charles K. Gifford President and Chief Operating Officer of FleetBoston
Financial Corporation
Robert J. Higgins President of Consumer Banking and Investment Services of
FleetBoston Financial Corporation
Henrique C. Meirelles President of Global Banking of FleetBoston Financial
Corporation
T. Joseph Semrod Vice Chairman of FleetBoston Financial Corporation and
Chairman of FleetBoston Financial Corporation's New Jersey
Operations
Joel B. Alvord President and Managing Director of Shawmut Capital Partners,
Inc.
William Barnet, III Chairman and Chief Executive Officer of William Barnet &
Son, Inc.
Daniel P. Burnham Chairman and Chief Executive Officer of Raytheon Company
Paul J. Choquette, Jr. Chairman and Chief Executive Officer of Gilbane Building
Company
Kim B. Clark Dean of the Graduate School of Business Administration,
Harvard University, Cambridge, Massachusetts
John T. Collins Chairman and Chief Executive Officer of The Collins Group,
Inc.
Gary L. Countryman Chairman Emeritus of Liberty Mutual Insurance Company
T.J. Dermot Dunphy Chairman of Kildare Enterprises, LLC and Retired Chairman
and Chief Executive Officer of Sealed Air Corporation
Alice F. Emerson Senior Advisor, The Andrew W. Mellon Foundation and
President Emerita of Wheaton College, Norton, Massachusetts
Marian L. Heard President and Chief Executive Officer of the United Way of
Massachusetts Bay and Chief Executive Officer of the United
Ways of New England
Robert M. Kavner Vice Chairman of idealab!
Donald F. McHenry Distinguished Professor of Diplomacy and International
Relations, Georgetown University, Washington, D.C. and
President of the IRC Group
Thomas J. May Chairman and Chief Executive Officer of NSTAR
Michael B. Picotte Managing General Partner and Chief Executive Officer of the
Picotte Companies
Francene S. Rodgers Chief Executive Officer of WFD, Inc.
John W. Rowe President and Co-Chief Executive Officer of Exelon
Corporation
Thomas M. Ryan Chairman and Chief Executive Officer of CVS Corporation
Paul R. Tregurtha Chairman and Chief Executive Officer of Mormac Marine Group,
Inc. and Moran Transportation Company
S-6
EXECUTIVE OFFICERS
Our present executive officers and their titles are:
Terrence Murray Chairman and Chief Executive Officer
Charles K. Gifford President and Chief Operating Officer
Robert J. Higgins President of Consumer Banking and Investment Services
Henrique C. Meirelles President of Global Banking
Eugene M. McQuade Vice Chairman and Chief Financial Officer
H. Jay Sarles Vice Chairman, Wholesale Banking
Paul F. Hogan Vice Chairman and Chief Risk Officer
Peter J. Manning Vice Chairman
T. Joseph Semrod Vice Chairman
Joseph A. Smialowski Vice Chairman, Technology and Operations
Bradford H. Warner Vice Chairman, Consumer Business Group
Anne M. Finucane Executive Vice President
John L. Mastromarino Executive Vice President
Brian T. Moynihan Executive Vice President
William C. Mutterperl Executive Vice President, General Counsel and Secretary
M. Anne Szostak Executive Vice President
Ernest L. Puschaver Chief Accounting Officer
S-7
CAPITALIZATION OF FLEETBOSTON FINANCIAL CORPORATION
The following table sets forth our actual consolidated capitalization at
June 30, 2001, and our capitalization as of that date as adjusted to reflect (1)
the repurchase on July 11, 2001 of 28,130 of the 410,580 outstanding shares of
our 6.75% Series VI perpetual preferred stock, having an aggregate liquidation
value of $7 million; (2) the issuance on September 17, 2001 of $500 million of
capital securities of Fleet Capital Trust VII; (3) the redemption on October 1,
2001 of all 200,000 outstanding shares of our fixed/adjustable rate Series VIII
noncumulative preferred stock, having an aggregate liquidation value of $50
million; and (4) the issuance and sale of the senior notes offered by this
prospectus supplement. The table should be read in conjunction with our
consolidated financial statements and notes to those consolidated financial
statements included in the documents incorporated by reference in this
prospectus supplement and the accompanying prospectus. See "Where You Can Find
More Information" in this prospectus supplement and the accompanying prospectus.
Except as disclosed in this prospectus supplement, there has been no material
change to our capitalization since June 30, 2001.
AT JUNE 30, 2001
----------------------
ACTUAL AS ADJUSTED
------- -----------
(DOLLARS IN MILLIONS)
Senior and subordinated debt................................ $25,512 $26,512
Company-obligated mandatorily redeemable preferred
securities of Fleet Capital Trust I(1).................... 84 84
Company-obligated mandatorily redeemable capital securities
of Fleet Capital Trust II(2).............................. 250 250
Company-obligated mandatorily redeemable preferred
securities of Fleet Capital Trust III(3).................. 120 120
Company-obligated mandatorily redeemable preferred
securities of Fleet Capital Trust IV(4)................... 150 150
Company-obligated mandatorily redeemable capital securities
of Fleet Capital Trust V(5)............................... 250 250
Company-obligated mandatorily redeemable preferred
securities of Fleet Capital Trust VI(6)................... 300 300
Company-obligated mandatorily redeemable capital securities
of Fleet Capital Trust VII(7)............................. -- 500
Company-obligated mandatorily redeemable capital securities
of BankBoston Capital Trust I(8).......................... 250 250
Company-obligated mandatorily redeemable capital securities
of BankBoston Capital Trust II(9)......................... 250 250
Company-obligated mandatorily redeemable capital securities
of BankBoston Capital Trust III(10)....................... 250 250
Company-obligated mandatorily redeemable capital securities
of BankBoston Capital Trust IV(11)........................ 250 250
Company-obligated mandatorily redeemable capital securities
of Summit Capital Trust I(12)............................. 150 150
------- -------
Total long-term debt........................................ 27,816 29,316
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value(13)........................ 328 271
Common stock, $.01 par value(14)............................ 11 11
Common surplus.............................................. 4,019 4,019
Retained earnings........................................... 14,562 14,562
Accumulated other comprehensive income...................... 422 422
Treasury stock.............................................. (66) (66)
------- -------
Total stockholders' equity.................................. 19,276 19,219
------- -------
Total long-term debt and stockholders' equity............... $47,092 $48,535
======= =======
-------------------------
S-8
(1) Issued on February 4, 1997. The sole assets of Fleet Capital Trust I are
8.00% Junior Subordinated Deferrable Interest Debentures due 2027 with a
principal amount of approximately $86.3 million. Those debentures mature on
February 15, 2027, which may be (i) shortened to a date not earlier than
April 15, 2001 or (ii) extended to a date not later than February 15, 2046.
We own all of the common securities of this trust. Upon redemption of the
debentures, the preferred securities are mandatorily redeemable.
(2) Issued on December 11, 1996. The sole assets of Fleet Capital Trust II are
7.92% Junior Subordinated Deferrable Interest Debentures due 2026 with a
principal amount of approximately $257.7 million. Those debentures mature
on December 11, 2026. We own all of the common securities of this trust.
Upon redemption of the debentures, the capital securities are mandatorily
redeemable.
(3) Issued on January 29, 1998. The sole assets of Fleet Capital Trust III are
7.05% Junior Subordinated Deferrable Interest Debentures due 2028 with a
principal amount of approximately $123.7 million. Those debentures mature
on March 31, 2028. We own all of the common securities of this trust. Upon
redemption of the debentures, the preferred securities are mandatorily
redeemable.
(4) Issued on April 28, 1998. The sole assets of Fleet Capital Trust IV are
7.17% Junior Subordinated Deferrable Interest Debentures with a principal
amount of approximately $154.6 million. Those debentures mature on March
31, 2028. We own all of the common securities of this trust. Upon
redemption of the debentures, the preferred securities are mandatorily
redeemable.
(5) Issued on December 18, 1998. The sole assets of Fleet Capital Trust V are
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2028
with a principal amount of approximately $257.7 million. Those debentures
mature on December 18, 2028. We own all of the common securities of this
trust. Upon redemption of the debentures, the capital securities are
mandatorily redeemable.
(6) Issued on June 30, 2000. The sole assets of Fleet Capital Trust VI are
8.80% Junior Subordinated Deferrable Interest Debentures due 2030 with a
principal amount of approximately $309.3 million. Those debentures mature
on June 30, 2030. We own all of the common securities of this trust. Upon
redemption of the debentures, the preferred securities are mandatorily
redeemable.
(7) Issued on September 17, 2001. The sole assets of Fleet Capital Trust VII
are 7.20% Junior Subordinated Deferrable Interest Debentures due 2031 with
a principal amount of approximately $515.5 million. Those debentures mature
on December 15, 2031, unless extended to a date not later than December 15,
2050, or redeemed earlier. We own all of the common securities of this
trust. Upon redemption of the debentures, the capital securities are
mandatorily redeemable.
(8) Issued on November 26, 1996. The sole assets of BankBoston Capital Trust I
are 8.25% Series A Junior Subordinated Deferrable Interest Debentures due
December 15, 2026 with a principal amount of approximately $257.7 million.
We own all of the common securities of this trust. Upon redemption of the
debentures, the capital securities are mandatorily redeemable.
(9) Issued on December 10, 1996. The sole assets of BankBoston Capital Trust II
are 7.75% Series A Junior Subordinated Deferrable Interest Debentures due
December 15, 2026 with a principal amount of approximately $257.7 million.
We own all of the common securities of this trust. Upon redemption of the
debentures, the capital securities are mandatorily redeemable.
(10) Issued on June 4, 1997. The sole assets of BankBoston Capital Trust III are
Floating Rate Junior Subordinated Deferrable Interest Debentures due June
15, 2027 with a principal amount of approximately $257.7 million. We own
all of the common securities of this trust. Upon redemption of the
debentures, the capital securities are mandatorily redeemable.
(11) Issued on June 8, 1998. The sole assets of BankBoston Capital Trust IV are
Floating Rate Junior Subordinated Deferrable Interest Debentures due June
8, 2028 with a principal amount of
S-9
approximately $257.7 million. We own all of the common securities of this
trust. Upon redemption of the debentures, the capital securities are
mandatorily redeemable.
(12) Issued on March 20, 1997. The sole assets of Summit Capital Trust I are
8.40% Junior Subordinated Deferrable Interest Debentures due March 15, 2027
with a principal amount of approximately $154.6 million. We own all of the
common securities of this trust. Upon redemption of the debentures, the
capital securities are mandatorily redeemable.
(13) As of June 30, 2001, we had 16,000,000 shares of Preferred Stock, $1.00 par
value, authorized, with three series of preferred stock outstanding, as
follows: (1) 690,000 shares of series VI 6.75% perpetual preferred stock,
having a liquidation value of $250 per share, plus accrued and unpaid
dividends, were designated and 410,580 shares were issued and outstanding;
(2) 805,000 shares of series VII fixed/adjustable rate cumulative preferred
stock, having a liquidation value of $250 per share, plus accrued and
unpaid dividends, were designated and 700,000 shares were issued and
outstanding; and (3) 200,000 shares of series VIII fixed/adjustable rate
noncumulative preferred stock, having a liquidation value of $250 per
share, plus accrued and unpaid dividends, were designated and 200,000
shares were issued and outstanding. In addition, our board of directors has
established a series of 500,000 shares of cumulative participating junior
preferred stock, series 2000, the "junior preferred stock," issuable upon
exercise of our preferred share purchase rights described in note 14 below,
of which no shares were issued and outstanding as of June 30, 2001.
Dividends on outstanding preferred stock issues are payable quarterly. All
the preferred stock outstanding has preference over our common stock with
respect to the payment of dividends and distribution of assets in the event
of our liquidation or dissolution. Except in certain circumstances, the
holders of preferred stock have no voting rights.
(14) At June 30, 2001, we had 2 billion shares of common stock authorized and
approximately 1.1 billion shares of common stock outstanding. On September
16, 2001, we announced that our board of directors has authorized the
repurchase of up to $4 billion of our outstanding common stock prior to
December 31, 2002. We have entered into accelerated repurchase contracts to
repurchase up to $1.5 billion of our stock between September 17, 2001 and
December 31, 2001. To date, approximately two thirds of those repurchases
have been completed. Shares reserved for future issuance in connection with
our stock plans and outstanding stock options totaled approximately 130
million as of that date. On August 16, 2000, our board of directors
declared a dividend of one preferred share purchase right for each share of
our common stock outstanding as of the close of business on November 21,
2000. Under certain conditions, a right may be exercised to purchase one
ten-thousandth of a share of our cumulative participating preferred stock,
series 2000, at a price of $175, subject to adjustment. The rights become
exercisable if a party acquires 10% or more (in the case of certain
qualified investors, 15% or more) of the issued and outstanding shares of
our common stock, or after the commencement of a tender or exchange offer
for 10% or more of our issued and outstanding common stock. When
exercisable under certain conditions, each right would entitle the holder
to receive upon exercise of a right that number of shares of common stock
having a market value of two times the exercise price of the right. The
rights will expire in November 2010, unless we extend or redeem the rights
at an earlier date.
S-10
SELECTED CONSOLIDATED FINANCIAL DATA OF
FLEETBOSTON FINANCIAL CORPORATION
The following summary sets forth unaudited selected consolidated financial
data for us and our subsidiaries for the six months ended June 30, 2001 and 2000
and for each of the years in the five-year period ended December 31, 2000. The
following summary should be read in conjunction with the financial information
incorporated by reference in this prospectus supplement and the accompanying
prospectus. See "Where You Can Find More Information" in this prospectus
supplement and the accompanying prospectus. All data has been restated to
reflect the Summit acquisition. Certain amounts in prior periods have been
reclassified to conform to current-year presentation.
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
CONSOLIDATED SUMMARY OF
OPERATIONS:
Interest income (fully
taxable equivalent)........ $ 7,517 $ 8,214 $ 16,472 $ 15,491 $ 14,601 $ 13,390 $ 12,899
Interest expense............. 3,664 4,107 8,497 7,400 6,948 6,046 5,973
-------- -------- -------- -------- -------- -------- --------
Net interest income (fully
taxable equivalent)........ 3,853 4,107 7,975 8,091 7,653 7,344 6,926
Provision for credit
losses..................... 630 655 1,295 1,061 916 581 508
-------- -------- -------- -------- -------- -------- --------
Net interest income after
provision for credit losses
(fully taxable
equivalent)................ 3,223 3,452 6,680 7,030 6,737 6,763 6,418
Noninterest income........... 2,850 5,287 9,461 7,366 5,625 4,508 3,918
Noninterest expense.......... 4,911 5,211 9,610 10,253 7,847 6,878 6,647
Net income................... $ 672(a) $ 2,047(b) $ 3,910(c) $ 2,476(d) $ 2,771(e) $ 2,606(f) $ 2,144(g)
PER COMMON SHARE:
Basic earnings per share..... $ .60(a) $ 1.88(b) $ 3.58(c) $ 2.21(d) $ 2.48(e) $ 2.32(f) $ 1.84(g)
Diluted earnings per share... .60(a) 1.84(b) 3.52(c) 2.16(d) 2.42(e) 2.27(f) 1.81(g)
Weighted average basic shares
outstanding (in
millions).................. 1,083.6 1,080.6 1,081.4 1,095.7 1,094.7 1,081.1 1,102.6
Weighted average diluted
shares outstanding (in
millions).................. 1,095.2 1,099.5 1,098.7 1,121.5 1,119.7 1,105.0 1,122.0
Book value................... $ 17.47 $ 16.25 $ 17.31 $ 15.92 $ 14.78 $ 13.43 $ 12.28
Cash dividends declared...... .66 .60 1.23 1.11 1.00 .92 .87
RATIO OF EARNINGS TO FIXED
CHARGES(H):
Excluding interest on
deposits................... 1.66x 2.76x 2.58x 2.23x 2.65x 3.01x 2.81x
Including interest on
deposits................... 1.30 1.84 1.75 1.54 1.63 1.70 1.59
CONSOLIDATED BALANCE SHEET --
AVERAGE BALANCES:
Total assets................. $213,054 $229,202 $223,887 $223,232 $201,033 $180,769 $173,338
Securities held to
maturity................... 593 6,384 5,907 7,820 6,636 6,853 7,417
Securities available for
sale....................... 28,423 28,781 29,391 27,403 24,469 20,117 20,150
Loans and leases, net of
unearned income............ 132,304 142,066 139,518 139,268 130,691 120,841 114,664
Due from brokers/dealers..... 3,918 3,911 3,603 3,240 3,766 2,884 2,179
Interest bearing deposit
liabilities................ 98,314 105,403 102,069 109,756 106,430 100,285 99,256
Short-term borrowings........ 21,997 27,235 25,796 26,819 25,389 20,313 18,046
Due to brokers/dealers....... 3,873 5,320 4,829 4,150 4,503 3,463 2,645
Long-term debt(i)............ 29,912 30,200 31,191 26,198 13,062 8,880 8,588
Stockholders' equity......... 19,509 17,644 18,134 17,479 16,319 14,671 14,351
S-11
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- --------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
CONSOLIDATED RATIOS:
Net interest margin (fully
taxable equivalent)(j)..... 4.24% 4.21% 4.17% 4.19% 4.35% 4.60% 4.51%
Return on average
assets(j).................. .64(a) 1.80(b) 1.75(c) 1.11(d) 1.38(e) 1.44(f) 1.24(g)
Return on average common
stockholders' equity(j).... 6.94(a) 23.90(b) 22.04(c) 14.45(d) 17.51(e) 18.74(f) 15.70(g)
Average stockholders' equity
to average assets.......... 9.16 7.70 8.10 7.83 8.12 8.12 8.28
Tier 1 risk-based capital
ratio...................... 8.47 7.58 8.08 7.15 7.56 8.15 8.73
Total risk-based capital
ratio...................... 12.25 11.50 11.87 11.44 11.65 11.72 12.51
Period-end reserve for credit
losses to period-end loans
and leases, net of unearned
income..................... 2.13 2.04 2.01 1.97 1.98 1.95 2.24
Net charge-offs to average
loans and leases, net of
unearned income(j)......... .90% .85% .89% .74% .67% .59 .60
Period-end nonperforming
assets to period-end loans
and leases and other real
estate owned, net of
unearned income............ 1.08 .81 .84 .69 .62 .74 1.20
-------------------------
(a) Includes impact of merger-related and restructuring charges ($890 million
pre-tax, $561 million post-tax), write-downs taken against the carrying
value of the Principal Investing portfolio ($602 million pre-tax, $370
million post-tax) and a loss from the sale of our mortgage banking business
($428 million pre-tax, $285 million post-tax) recorded in the first half of
2001. Also includes impact of gains on branch divestitures associated with
the BankBoston merger ($333 million pre-tax, $204 million post-tax) recorded
in the first half of 2001.
(b) Includes impact of gain on branch divestitures ($679 million pre-tax, $336
million post-tax) and merger integration costs ($187 million pre-tax, $112
million post-tax) recorded in the first half of 2000.
(c) Includes impact of gain on branch divestitures ($843 million pre-tax, $420
million post-tax) and merger-related and restructuring charges ($249 million
pre-tax, $151 million post-tax) recorded in 2000.
(d) Includes impact of merger- and restructuring-related charges and other costs
($1.1 billion pre-tax, $777 million post-tax) recorded in 1999.
(e) Includes impact of merger- and restructuring-related charges and other costs
($220 million pre-tax, $135 million post-tax) recorded in 1998.
(f) Includes impact of merger- and restructuring-related charges ($83 million
pre-tax, $54 million post-tax) recorded in 1997.
(g) Includes impact of merger- and restructuring-related charges ($291 million
pre-tax, $187 million post-tax) and one-time Savings Association Insurance
Fund assessment ($11 million pre-tax, $7 million post-tax) recorded in 1996.
(h) For the purpose of computing the ratio of earnings to fixed charges,
"EARNINGS" consist of income before income taxes plus fixed charges,
excluding capitalized interest. "FIXED CHARGES" consist of interest on
short-term debt and long-term debt, including interest related to
capitalized leases and capitalized interest, and one-third of rent expense,
which approximates the interest component of such expense. In addition,
where indicated, fixed charges include interest on deposits.
(i) Amounts include guaranteed preferred beneficial interests in our junior
subordinated debentures.
(j) Ratios for the six-month periods are annualized.
S-12
USE OF PROCEEDS
We anticipate our net proceeds from the sale of the senior notes, before
expenses, to be $ . We intend to use these net proceeds for general
corporate purposes. Our general corporate purposes may include extending credit
to, or funding investments in, our subsidiaries. The precise amounts and the
timing of our use of the net proceeds will depend upon our subsidiaries' funding
requirements and the availability of other funds. Until we use the net proceeds
from the sale of any of the senior notes for general corporate purposes, we will
use the net proceeds to reduce our short-term indebtedness or for temporary
investments. We expect that we will, on a recurrent basis, engage in additional
financings as the need arises to finance our growth, through acquisitions or
otherwise, or to fund our subsidiaries.
CERTAIN TERMS OF THE SENIOR NOTES
GENERAL
The following description of the particular terms of the senior notes
supplements the description of the general terms of the senior debt securities
set forth under the headings "Description of Debt Securities" in the
accompanying prospectus beginning on page 7 and "Senior Debt Securities" in the
accompanying prospectus beginning on page 13. Capitalized terms used but not
defined in this prospectus supplement have the meanings assigned in the
accompanying prospectus or the senior indenture referred to in the accompanying
prospectus.
The senior notes are a series of senior debt securities issued under an
indenture, dated as of December 6, 1999 (the "senior indenture"), between us and
The Bank of New York as trustee (the "trustee"). We will issue the senior notes
in fully registered form and in denominations of $1,000 and integral multiples
of $1,000. The senior indenture and the senior notes will be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles of that state.
The courts of the State of New York and the United States District Court
located in the Borough of Manhattan in New York will have jurisdiction to hear
and determine any suit, action or proceedings, and to settle any disputes, which
may arise out of or in connection with the senior notes.
The senior notes will bear interest at the rate of % per annum.
Interest on the senior notes will accrue from and including November , 2001 to
but excluding the maturity date or earlier redemption date, if applicable. We
will pay interest on the senior notes at maturity, upon earlier tax redemption,
if applicable, and semiannually in arrears on the day of and
of each year, beginning . Interest will be paid to the
person in whose names the senior notes are registered at the close of business
on the preceding and (the "record date").
We will compute interest on the senior notes on the basis of a 360-day year
of twelve 30-day months. If an interest payment date, a redemption date or the
maturity date falls on a day that is not a business day, the payment will be
made on the next business day as if it were made on the date the payment was
due, and no interest will accrue on the amount so payable for the period from
and after that interest payment date or the maturity date, as the case may be.
We will make all principal and interest payments on the senior notes in
immediately available funds. All sales of the senior notes, including secondary
market sales, will settle in immediately available funds.
Other than as discussed below under "Redemption for Tax Reasons," the
senior notes are not redeemable prior to maturity and will not be entitled to
any sinking fund. We will redeem the senior notes at maturity at par.
PAYMENTS OF ADDITIONAL AMOUNTS
Subject to the exceptions and limitations set forth below, we will pay as
additional interest on the senior notes additional amounts so that the net
payment of the principal of and interest on the senior notes
S-13
to a holder who is not a United States person (as defined below), after
deduction for any present or future tax, assessment or other governmental charge
of the United States or a political subdivision or taxing authority of or in the
United States, imposed by withholding with respect to the payment, will not be
less than the amount that would have been payable had no withholding or
deduction been required.
Our obligation to pay additional amounts shall not apply:
(1) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of the holder, or a fiduciary,
settlor, beneficiary, member or shareholder of the holder if the holder is
an estate, trust, partnership or corporation, or a person holding a power
over an estate or trust administered by a fiduciary holder, being
considered as:
(a) being or having been present or engaged in a trade or business
in the United States or having had a permanent establishment in the
United States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident of the United States;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that has
accumulated earnings to avoid United States federal income tax;
(d) being or having been a "10-percent shareholder" of us as
defined in section 871(h)(3) of the United States Internal Revenue Code
or any successor provision; or
(e) being a bank receiving payments on an extension of credit made
pursuant to a loan agreement entered into the ordinary course of its
trade or business;
(2) to any holder that is not the sole beneficial owner of the senior
notes, or a portion of the senior notes, or that is a fiduciary or
partnership, but only to the extent that a beneficiary or settlor with
respect to the fiduciary, a beneficial owner or member of the partnership
would not have been entitled to the payment of an additional amount had the
beneficiary, settlor, beneficial owner or member received directly its
beneficial or distributive share of the payment;
(3) to any tax, assessment or other governmental charge that is
imposed otherwise or withheld solely by reason of a failure of the holder
or any other person to comply with certification, identification or
information reporting requirements concerning the nationality, residence,
identity or connection with the United States of the holder or beneficial
owner of the senior notes, if compliance is required by statute, by
regulation of the United States Treasury Department or by an applicable
income tax treaty to which the United States is a party as a precondition
to exemption from such tax, assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is
imposed otherwise than by withholding by us or a paying agent from the
payment;
(5) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of a change in law, regulation, or
administrative or judicial interpretation that becomes effective more than
15 days after the payment becomes due or is duly provided for, whichever
occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth
or personal property tax or similar tax, assessment or other governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any senior notes, if such payment can be made without such withholding
by any other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5),
(6) and (7).
S-14
The senior notes are subject in all cases to any tax, fiscal or other law
or regulation or administrative or judicial interpretation applicable to the
senior notes. Except as specifically provided under this heading and under the
heading "-- Redemption for Tax Reasons," we shall not be required to make any
payment with respect to any tax, assessment or other governmental charge imposed
by any government or a political subdivision or taxing authority of or in any
government or political subdivision.
As used under this heading and under the heading "-- Redemption for Tax
Reasons", the term "United States" means the United States of America (including
the states and the District of Columbia) and its territories, possessions and
other areas subject to its jurisdiction, "United States person" means any
individual who is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any state of the United States or the District of Columbia (other
than a partnership that is not treated as a United States person under any
applicable Treasury regulations), any estate the income of which is subject to
United States federal income taxation regardless of its source, or any trust if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in the applicable Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date that elect to continue to be treated as
United States persons will also be United States persons. "Non-United States
persons" means a person who is not a United States person.
REDEMPTION FOR TAX REASONS
If, as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or any
political subdivision or taxing authority of or in the United States), or any
change in, or amendments to, an official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
is announced or becomes effective on or after the date of this prospectus
supplement, we become or, based upon a written opinion of independent counsel
selected by us, will become obligated to pay additional amounts as described
herein under the heading "-- Payments of Additional Amounts" with respect to the
senior notes, then we may at our option redeem, in whole, but not in part, the
senior notes on not less than 30 nor more than 60 days prior notice, at a
redemption price equal to 100% of their principal amount, together with interest
accrued but unpaid on those senior notes to the date fixed for redemption.
FUTURE ISSUES
We may, without the consent of the holders of senior notes, issue
additional notes having the same ranking and the same interest rate, maturity
and other terms as the senior notes. Any additional notes having such similar
terms, together with the senior notes, will constitute a single series of notes
under the senior indenture.
BOOK-ENTRY SYSTEM
The senior notes will be issued in the form of one or more fully registered
Global Notes (the "Global Notes") which will be deposited with, or on behalf of,
The Depository Trust Company, New York, New York (the "Depository" or "DTC") and
registered in the name of Cede & Co., the Depository's nominee. Beneficial
interests in the Global Notes will be represented through book-entry accounts of
financial institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depository. Investors may elect to hold interests
in the Global Notes through either the Depository or Morgan Guaranty Trust
Company of New York, Brussels Office, as operator of the Euroclear System
("Euroclear") or Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg"), if they are participants of such systems, or indirectly through
organizations which are participants in such systems. Euroclear and Clearstream,
Luxembourg will hold interests on behalf of their participants through
customers' securities accounts in Euroclear's and Clearstream, Luxembourg's
names on the books of their respective depositaries, which in turn will hold
such interests in customers' securities accounts in the
S-15
depositaries' names on the books of the Depository. The Chase Manhattan Bank
will act as depositary for Euroclear and Citibank, N.A. will act as depositary
for Clearstream, Luxembourg (in such capacities, the "U.S. Depositaries").
Except as set forth below, the Global Notes may be transferred, in whole and not
in part, only to another nominee of the Depository or a successor of the
Depository or its nominee.
Euroclear advises that it was created in 1968 to hold securities for its
participants ("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 provides various other services, including securities lending
and borrowing, and interfaces with domestic markets in several countries.
Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty Trust
Company of New York (the "Euroclear Operator"), under contract with Euroclear
Clearance Systems S.C., a Belgian cooperative corporation (the "Cooperative").
All operations are conducted by the Euroclear Operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear Operator, not the Cooperative. The Cooperative establishes policy for
Euroclear on behalf of Euroclear Participants. Euroclear Participants include
banks (including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the Underwriters. 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 is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to senior 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.
Clearstream, Luxembourg holds securities for its customers and facilitates
the clearance and settlement of securities transactions between Clearstream,
Luxembourg customers through electronic book-entry changes in accounts of
Clearstream, Luxembourg customers, thereby eliminating the need for physical
movement of certificates. Transactions may be settled by Clearstream, Luxembourg
in any of 36 currencies, including United States Dollars. Clearstream,
Luxembourg provides to its customers, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Clearstream, Luxembourg also
deals with domestic securities markets in over 30 countries through established
depository and custodial relationships. Clearstream, Luxembourg is registered as
a bank in Luxembourg, and as such is subject to regulation by the Commission de
Surveillance du Secteur Financier, "CSSF", which supervises Luxembourg banks.
Clearstream, Luxembourg's customers are world-wide financial institutions
including underwriters, securities brokers and dealers, banks, trust companies
and clearing corporations. Clearstream, Luxembourg's U.S. customers are limited
to securities brokers, dealers and banks. Currently, Clearstream, Luxembourg has
approximately 2,000 customers located in over 80 countries, including all major
European countries, Canada, and the United States. Indirect access to
Clearstream, Luxembourg is available to other institutions that clear through or
maintain a custodial relationship with an account holder of Clearstream,
S-16
Luxembourg. Clearstream, Luxembourg has established an electronic bridge with
Morgan Guaranty Trust Company of New York as the Operator of the Euroclear
System (MGT/EOC) in Brussels to facilitate settlement of trades between
Clearstream, Luxembourg and MGT/EOC.
Distributions with respect to the senior notes held beneficially through
Clearstream, Luxembourg will be credited to cash accounts of Clearstream,
Luxembourg participants in accordance with its rules and procedures, to the
extent received by the U.S. Depositary for Clearstream, Luxembourg.
So long as the senior notes are listed on the Luxembourg Stock Exchange and
the rules of the Luxembourg Stock Exchange require, we will appoint a paying
agent and transfer agent in Luxembourg (the "Luxembourg Paying and Transfer
Agent") and the holders of the senior notes will be able to receive payments on
the senior notes and effect transfers of the senior notes at the offices of the
Luxembourg Paying and Transfer Agent.
Title to book-entry interests in the senior notes will pass by book-entry
registration of the transfer within the records of Euroclear, Clearstream,
Luxembourg or DTC, as the case may be, in accordance with their respective
procedures. Book-entry interests in the senior notes may be transferred within
Euroclear and within Clearstream, Luxembourg and between Euroclear and
Clearstream, Luxembourg in accordance with procedures established for these
purposes by Euroclear and Clearstream, Luxembourg. Book-entry interests in the
senior notes may be transferred within DTC in accordance with procedures
established for this purpose by DTC. Transfers of book-entry interests in the
senior notes between Euroclear and Clearstream, Luxembourg and DTC may be
effected in accordance with procedures established for this purpose by
Euroclear, Clearstream, Luxembourg and DTC.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the senior notes will be made in immediately
available funds. Secondary market trading between DTC Participants will occur in
the ordinary way in accordance with Depository rules and will be settled in
immediately available funds. Secondary market trading between Euroclear
Participants and/or Clearstream, Luxembourg participants will occur in the
ordinary way in accordance with the applicable rules and operating procedures of
Euroclear and Clearstream, Luxembourg 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 the Depository on the one hand, and directly or indirectly through
Euroclear or Clearstream, Luxembourg participants, on the other, will be
effected by the Depository in accordance with the Depository 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. Depository to take action to effect final settlement on its behalf
by delivering or receiving senior notes to or from the Depository, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to the Depository. Euroclear Participants and Clearstream,
Luxembourg participants may not deliver instructions directly to their
respective U.S. Depositaries.
Because of time-zone differences, credits of senior notes received in
Euroclear or Clearstream, Luxembourg as a result of a transaction with a DTC
Participant will be made during subsequent securities settlement processing and
dated the business day following the Depository settlement date. Such credits or
any transactions in such senior notes settled during such processing will be
reported to the relevant Euroclear or Clearstream, Luxembourg participants on
such business day. Cash received in Euroclear or Clearstream, Luxembourg as a
result of sales of senior notes by or through a Euroclear Participant or a
Clearstream, Luxembourg participant to a DTC Participant will be received with
value on the Depository settlement date but will be available in the relevant
Euroclear or Clearstream, Luxembourg cash account only as of the business day
following settlement in the Depository.
S-17
Although the Depository, Euroclear and Clearstream, Luxembourg have agreed
to the foregoing procedures in order to facilitate transfers of senior notes
among participants of the Depository, Euroclear and Clearstream, Luxembourg,
they are under no obligation to perform or continue to perform such procedures
and such procedures may be changed or discontinued at any time.
ISSUANCE OF DEFINITIVE NOTES
Individual certificates in respect of senior notes will not be issued in
exchange for the Global Notes, except in very limited circumstances. If
Euroclear, Clearstream, Luxembourg or DTC notifies us that it is unwilling or
unable to continue as a clearing system in connection with the Global Notes or,
in the case of DTC only, DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, and in each case we do not appoint a successor
clearing system within 90 days after receiving such notice from Euroclear,
Clearstream, Luxembourg or DTC or on becoming aware that DTC is no longer so
registered, we will issue or cause to be issued individual certificates in
registered form on registration of transfer of, or in exchange for, book-entry
interests in the senior notes represented by such Global Notes upon delivery of
such Global Notes for cancellation.
Senior notes issued in definitive form will be issued as registered notes
in denominations of $1,000 and integral multiples of $1,000. You may transfer
the definitive senior notes in whole or in part in $1,000 denominations by
presenting them for registration to the registrar at its New York office or to
the Luxembourg transfer agent, which will be Banque International a Luxembourg
S.A. ("Luxembourg Transfer Agent"), at its office. Senior notes presented for
registration must be duly endorsed by you or your attorney duly authorized in
writing, or accompanied by a written instrument or instruments of transfer in
form satisfactory to us or the trustee duly executed by you or your attorney
duly authorized in writing. In the case of a partial transfer of a definitive
senior note, the registrar or Luxembourg Transfer Agent will return to the
holder definitive senior notes representing the denomination of senior notes not
transferred. We may require you to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any full or
partial exchange or registration of transfer of definitive senior notes.
If we issue definitive senior notes:
- principal of and interest on the senior notes will be payable in the
manner described below;
- the transfer of the senior notes will be registrable; and
- the senior notes will be exchangeable for senior notes bearing identical
terms and provisions.
If we issue definitive senior notes, we will do so at the office of The
Bank of New York, the paying agent and registrar for the senior notes, including
any successor paying agent and registrar for the senior notes, currently located
at 48 Wall Street, New York, New York 10005 and at the office of Banque
International a Luxembourg S.A., as the Luxembourg paying agent (the "Luxembourg
Paying Agent"), currently located at 69, route dEsch, L-2953 Luxembourg. We will
maintain a Luxembourg Transfer Agent and a Luxembourg Paying Agent as long as
the senior notes are listed on the Luxembourg Stock Exchange.
We may pay interest on definitive senior notes, other than interest at
maturity or upon redemption, by mailing a check to the address of the person
entitled to the interest as it appears on the security register at the close of
business on the record date corresponding to the relevant interest payment date.
Notwithstanding the foregoing, DTC, as holder of the senior notes, or a
holder of more than $1 million in aggregate principal amount of notes in
definitive form, may require the paying agent to make payments of interest,
other than interest due at maturity or upon redemption, by wire transfer of
immediately available funds into an account maintained by the holder in the
United States, by sending appropriate wire transfer instructions. The paying
agent must receive these instructions not less than ten days prior to the
applicable interest payment date.
The paying agent or the Luxembourg Paying Agent, as the case may be, will
pay the principal and interest payable at maturity or upon redemption by wire
transfer of immediately available funds against
S-18
presentation and surrender of a senior note at the office of the paying agent or
the Luxembourg Paying Agent.
NOTICES TO HOLDERS
Application has been made to list the senior notes on the Luxembourg Stock
Exchange. Notices to holders of the senior notes will be given at least once by
publication in one daily newspaper in the English language of general
circulation in London (which is expected to be the Financial Times), and, so
long as the senior notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange require, in a daily newspaper of general
circulation in Luxembourg (which is expected to be Luxemburger Wort). The
notices will be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first publication.
MATERIAL UNITED STATES TAX CONSIDERATIONS
Our counsel, Edwards & Angell, LLP, has prepared the following summary
which describes the material United States federal income tax consequences of
the ownership and disposition of senior notes to initial holders of the senior
notes purchasing the senior notes at the public offering price set forth on the
cover page of this prospectus supplement. The discussion below is based on the
Internal Revenue Code of 1986, as amended (the "Code"), administrative
pronouncements, judicial decisions, and existing and proposed Treasury
regulations, and interpretations of the foregoing, changes to any of which
subsequent to the date of this prospectus supplement may affect the tax
consequences described herein. These statements address only the tax
consequences to initial holders holding senior notes as capital assets within
the meaning of section 1221 of the Code. They do not discuss all of the tax
consequences that may be relevant to holders in light of their particular
circumstances or to holders subject to special rules, such as certain financial
institutions, insurance companies, dealers in securities or foreign currencies,
United States Holders (defined below) whose functional currency (as defined in
Code Section 985) is not the U.S. dollar, persons holding senior notes in
connection with a hedging transaction, "straddle," conversion transaction, or
other integrated transaction, traders in securities that elect to mark to
market, or holders liable for alternative minimum tax. Persons considering the
purchase of the senior notes should consult their tax advisors concerning the
application of United States federal income tax laws, as well as the laws of any
state, local, or foreign taxing jurisdictions, to their particular situations.
As used in this prospectus supplement, a "United States Holder" of a senior
note means a beneficial owner that is for United States federal income tax
purposes:
- a citizen or resident of the United States,
- a corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in or
under the laws of the United States or of any state of the United States
or the District of Columbia,
- an estate the income of which is subject to United States federal income
taxation regardless of its source, or,
- a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust or the trust has a valid election in effect under applicable
Treasury regulations to be treated as a United States person.
As used in this prospectus supplement, the term "United States Alien
Holder" means a beneficial owner of a senior note that is not a United States
Holder.
TAX CONSEQUENCES TO UNITED STATES HOLDERS
PAYMENTS OF INTEREST. Interest on a senior note will generally be taxable
to a United States Holder as ordinary interest income at the time it accrues or
is received in accordance with the United States Holder's method of accounting
for federal income tax purposes.
S-19
SALE, EXCHANGE OR RETIREMENT. Upon the sale, exchange or retirement of a
senior note, a United States Holder will recognize gain or loss equal to the
difference between the amount realized on the sale, exchange, or retirement of
the senior note and the holder's adjusted tax basis in the senior note. A United
States Holder's adjusted tax basis in a senior note will generally equal the
cost of the senior note to the holder. The amount realized excludes any amounts
attributable to interest accrued between interest payment dates which will be
includible in income as interest in accordance with the United States Holder's
method of accounting if not previously included in income. Any gain or loss will
be capital gain or loss and will be long-term capital gain or loss if at the
time of the sale, exchange, or retirement the senior note has been held for more
than one year.
TAX CONSEQUENCES TO UNITED STATES ALIEN HOLDERS
Under present United States federal tax law, and subject to the discussion
below concerning backup withholding:
A. payments of principal, interest and premium and the senior notes
by us or our paying agent to any United States Alien Holder will be exempt
from the 30% United States federal withholding tax, provided that the
holder does not own, actually or constructively, 10% or more of the total
combined voting power of all classes of our stock entitled to vote, the
holder is not a controlled foreign corporation related, directly or
indirectly, to us through stock ownership and the statement requirement set
forth in section 871(h) or section 881(c) of the Code has been fulfilled
with respect to the beneficial owner, as discussed below;
B. a United States Alien Holder of a senior note will not be subject
to United States federal income tax on gain realized on the sale, exchange,
or retirement of the senior note, unless the holder is an individual who is
present in the United States for 183 days or more in the taxable year of
the disposition and certain other conditions are met or the gain is
effectively connected with the holder's conduct of a trade or business in
the United States; and
C. a senior note held by an individual who is not, for United States
estate tax purposes, a resident or citizen of the United States at the time
of his death will not be subject to United States federal estate tax,
provided that the individual does not own, actually or constructively, 10%
or more of the total combined voting power of all classes of our stock
entitled to vote and, at the time of the individual's death, payments with
respect to the senior note would not have been effectively connected to the
conduct by the individual of a trade or business in the United States.
The certification requirement referred to in sub-paragraph (A) will be
fulfilled if the beneficial owner of a senior note certifies on Internal Revenue
Service ("IRS") Form W-8BEN, or other successor form, under penalties of
perjury, that it is not a United States person and provides its name and
address, and (i) the beneficial owner files IRS Form W-8BEN, or other successor
form with the withholding agent or (ii) in the case of a senior note held on
behalf of the beneficial owner by a securities clearing organization, bank, or
other financial institution holding customers' securities in the ordinary course
of its trade or business, the financial institution files with the withholding
agent a statement that it has received the IRS Form W-8BEN, or other successor
form from the holder and furnishes the withholding agent with a copy of those
forms. Unless a foreign partnership has entered into a withholding agreement
with the IRS, the foreign partnership will generally be required to provide an
intermediary IRS Form W-8IMY or other successor form and the appropriate
certification by each partner. Prospective investors should consult their tax
advisers regarding possible additional reporting requirements.
If a United States Alien Holder of a senior note is engaged in a trade or
business in the United States, and if interest on the senior note (or gain
realized on its sale, exchange, or other disposition) is effectively connected
with the conduct of its trade or business, the United States Alien Holder,
although exempt from the withholding tax discussed in the preceding paragraphs,
will be subject to regular United States income tax on its effectively connected
income, generally in the same manner as if it were a United States Holder. See
"Tax Consequences to United States Holders" above. In lieu of the certificate
described in the preceding paragraph, a holder will be required to provide to
the withholding agent a properly executed IRS Form W-8ECI, or other successor
form to claim an exemption from withholding
S-20
tax. In addition, if a United States Alien Holder is a foreign corporation, it
may be subject to a 30% branch profits tax (unless reduced or eliminated by an
applicable treaty) on its earnings and profits for the taxable year attributable
to its effectively connected income, subject to certain adjustments.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to certain payments of principal, premium, and interest made
to, and to the proceeds of sales before maturity by, non-corporate United States
Holders. In addition, backup withholding tax will apply if the non-corporate
United States Holder (i) fails to furnish its Taxpayer Identification Number
("TIN") which, for an individual, is his Social Security Number, (ii) furnishes
an incorrect TIN, (iii) is notified by the IRS that it has failed to properly
report payments of interest and dividends, or (iv) under certain circumstances,
fails to certify, under penalty of perjury, that it has furnished a correct TIN
and has not been notified by the IRS that it is subject to backup withholding
for failure to report interest and dividend payments. Holders should consult
their tax advisers regarding their qualification for exemption from backup
withholding and the procedure for obtaining such an exemption if applicable.
Information reporting and backup withholding will not apply to payments
made on a senior note if the certifications described above are received,
provided that we or our paying agent does not have actual knowledge that the
payee is a United States person.
Under current Treasury regulations, payments on the sale, exchange, or
other disposition of a senior note made to or through a foreign office of a
broker generally will not be subject to information reporting or backup
withholding. However, if the broker is (i) a United States person, (ii) a
controlled foreign corporation for United States federal income tax purposes,
(iii) a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period, (iv) a foreign partnership with certain connections to the United
States, or (v) a United States branch of a foreign bank or foreign insurance
company, then information reporting will be required unless the broker has in
its records documentary evidence that the beneficial owner is not a United
States person and certain other conditions are met, or the beneficial owner
otherwise establishes an exemption. Backup withholding may apply to any payment
that the broker is required to report if the broker has actual knowledge that
the payee is a United States person. Payments to or through the United States
office of a broker will be subject to backup withholding and information
reporting unless the beneficial owner certifies, under penalties of perjury,
that it is not a United States person or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a credit against the holder's United States federal income tax liability and may
entitle that holder to a refund, provided that the required information is
furnished to the IRS.
S-21
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement, dated
November , 2001 (the "Underwriting Agreement"), among us and the underwriters,
for whom Credit Suisse First Boston Corporation, Bear Stearns & Co. Inc. and
Fleet Securities, Inc. are acting as Joint Book Runners and representatives
(collectively, the "Underwriters"), we have agreed to sell to each of the
Underwriters, and each of the Underwriters has severally agree to purchase, the
respective principal amount of senior notes set forth after their names below.
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
Credit Suisse First Boston Corporation...................... $
Bear, Stearns & Co. Inc. ...................................
Fleet Securities, Inc. .....................................
Keefe, Bruyette & Woods, Inc................................
Sandler O'Neill & Partners, L.P. ...........................
Blaylock & Partners, L.P. ..................................
Guzman & Company............................................
Muriel Siebert & Co., Inc. .................................
Utendahl Capital Partners, L.P. ............................
The Williams Capital Group, L.P. ..........................
--------------
Total............................................. $1,000,000,000
==============
We have been advised by the Underwriters that they propose initially to
offer the senior notes to the public at the public offering price set forth on
the cover page of this prospectus supplement, and to certain dealers at that
price less a concession not in excess of % of the principal amount of the
senior notes. The Underwriters may allow, and these dealers may reallow, a
concession to certain other dealers not in excess of % of the principal
amount of the senior notes. After the initial public offering, the public
offering price and these concessions may be changed from time to time.
Although application will be made to list the senior notes on the
Luxembourg Stock Exchange, the senior notes are a new issue of securities with
no established trading market. The Underwriters have advised us that they intend
to make a market in the senior notes, but the Underwriters are not obligated to
do so and may discontinue any market making at any time without notice. The
trading market for the senior notes may not be liquid.
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all the senior notes if any are purchased.
In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Syndicate covering transactions involve purchases of the senior notes in
the open market after the distribution has been completed in order to
cover syndicate short positions. A short position is more likely to be
created if the underwriters are concerned that there may be downward
pressure on the price of the senior notes in the open market after
pricing that could adversely affect investors who purchase in the
offering.
- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the senior notes originally sold by the
syndicate member are purchased in a stabilizing transaction or a
syndicate covering transaction to cover syndicate short positions.
S-22
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the senior
notes or preventing or retarding a decline in the market price of the senior
notes. As a result the price of the senior notes may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on the Luxembourg Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.
The Underwriters and their respective associates and affiliates may be
customers of, engage in transactions with, and perform investment banking and
other financial services (including commercial lending) for us and our
subsidiaries in the ordinary course of business. Fleet Securities, Inc., one of
our wholly-owned subsidiaries, is acting as one of the Underwriters. When a
member of the National Association of Securities Dealers, Inc. ("NASD") such as
Fleet Securities participates in the distribution of an affiliated company's
securities, the offering must be conducted in accordance with applicable
provisions of the NASD's Conduct Rule 2720 ("CR 2720"). We are considered to be
an "affiliate" (as such term is defined in CR 2720) of Fleet Securities. Our
offer and sale of the senior notes will comply with the applicable requirements
of CR 2720 regarding the underwriting of securities of affiliates. No NASD
member participating in the offering of the senior notes will execute a
transaction in the senior notes in a discretionary account without the prior
written specific approval of the member's customer.
This prospectus supplement and the accompanying prospectus may be used by
Fleet Securities in connection with offers and sales related to secondary market
transactions in the senior notes. Fleet Securities may act as principal or agent
in those transactions. Those sales will be made at prices related to prevailing
market prices at the time of sale or otherwise.
The Underwriting Agreement provides that we will indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, or contribute to payments the Underwriters may be required to make in
respect of those liabilities.
OFFERING RESTRICTIONS
The senior notes are offered for sale in the United States and in
jurisdictions outside the United States, subject to applicable law.
Each of the Underwriters has agreed that it will not offer, sell, or
deliver any of the senior notes, directly or indirectly, or distribute this
prospectus supplement or the accompanying prospectus or any other offering
material relating to the senior notes, in or from any jurisdiction except under
circumstances that will, to the best of the Underwriters' knowledge and belief,
result in compliance with the applicable laws and regulations and which will not
impose any obligations on us except as set forth in the Underwriting Agreement.
You may be required to pay stamp taxes and other charges in accordance with
the laws and practices of the country in which you purchase the senior notes.
These taxes and charges are in addition to the issue price set forth on the
cover page.
UNITED KINGDOM
Each Underwriter has represented and agreed that it and each of its
affiliates:
- has not offered or sold and, prior to the expiry of the period of six
months from the time of closing, will not offer or sell any of the senior
notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing, or disposing of
investments (as principal or agent) for the purposes of their businesses
or otherwise in circumstances which have not resulted and will not result
in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, as amended;
- has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the senior notes in, from or otherwise involving the United
Kingdom; and
S-23
- has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
senior notes to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996, as amended, or is a person to whom those documents may
otherwise lawfully be issued or passed on.
GERMANY
In connection with the initial placement of senior notes in Germany, each
of the Underwriters has represented and agreed that it has not offered or sold
and it will not offer or sell senior notes in Germany other than in compliance
with the Securities Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of 13th
December, 1990 as amended or any other law applicable in Germany governing the
issue, offering and sale of securities.
THE NETHERLANDS
Each of the Underwriters has represented and agreed that it has not,
directly or indirectly, offered or sold and will not, directly or indirectly,
offer or sell in the Netherlands any senior notes other than to persons who
trade or invest in securities in the conduct of a profession or business (which
include banks, stockbrokers, insurance companies, pension funds, other
institutional investors and finance companies and treasury departments of large
enterprises).
THE REPUBLIC OF FRANCE
Each of the Underwriters has represented and agreed that the senior notes
are being issued outside of France, and that it, in connection with the initial
distribution of the senior notes, has not offered or sold and will not offer or
sell senior notes in France, and that it has not distributed and will not
distribute or cause to be distributed in France this prospectus supplement and
accompanying prospectus or any other offering material relating to the senior
notes.
JAPAN
The senior notes have not been and will not be registered under the
Securities and Exchange Law of Japan and each of the Underwriters and each of
its affiliates has represented and agreed that it has not offered or sold, and
it will not offer or sell, directly or indirectly, any of the senior notes in or
to or for the benefit of residents of Japan or to any persons for reoffering or
resale, directly or indirectly, in Japan or to any resident of Japan, except
pursuant to an exemption from the registration requirements of the Securities
and Exchange Law available thereunder and in compliance with the other relevant
laws and regulations of Japan. The term "resident of Japan" as used in this
paragraph means any person resident in Japan, including any corporation or other
entity organized under the laws of Japan.
HONG KONG
Each of the Underwriters and each of its affiliates has represented and
agreed that: (a) it has not offered or sold, and it will not offer or sell, the
senior notes by means of any document to persons in Hong Kong other than persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent, or otherwise in circumstances which do not constitute an
offer to the public within the meaning of the Hong Kong Companies Ordinance
(Chapter 32 of the Laws of Hong Kong), and (b) unless it is a person permitted
to do so under the securities laws of Hong Kong, it has not issued or had in its
possession and will not issue or have in its possession for the purpose of issue
any advertisement, invitation or document relating to the senior notes other
than with respect to senior notes intended to be disposed of to persons outside
Hong Kong or to be disposed of in Hong Kong only to persons whose business
involves the acquisition, disposal or holding of securities, whether as
principal or agent.
S-24
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the senior notes in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of senior notes are made. Any resale of the senior notes in Canada must
be made under applicable securities laws, which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the senior notes.
Representations of Purchasers
By purchasing senior notes in Canada and accepting a purchase confirmation
a purchaser is representing to us and the dealer from whom the purchase
confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the senior notes without the benefit of a prospectus qualified
under those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under Resale Restrictions.
Rights of Action (Ontario Purchasers)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
Enforcement of Legal Rights
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgement against the issuer or such persons in Canada
or to enforce a judgement obtained in Canadian courts against such issuer or
persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of senior notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the senior
notes in their particular circumstances and about the eligibility of the senior
notes for investment by the purchaser under relevant Canadian legislation.
LEGAL OPINIONS
The validity of the securities offered by this prospectus supplement and
the accompanying prospectus will be passed upon for us by Edwards & Angell, LLP,
101 Federal Street, Boston, Massachusetts 02110-1800. Certain legal matters will
be passed upon for the Underwriters by Sidley Austin Brown & Wood LLP, 875 Third
Avenue, New York, New York 10022.
S-25
EXPERTS
Our consolidated financial statements incorporated in this prospectus
supplement and the accompanying prospectus by reference to our Current Report on
Form 8-K dated May 4, 2001 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
LISTING AND GENERAL INFORMATION
1. Application will be made to list the senior notes on the Luxembourg
Stock Exchange. In connection with the listing application, the Restated
Articles of Incorporation, as amended, and By-Laws of FleetBoston Financial
Corporation and a legal notice (Notice Legale) relating to the issuance of the
senior notes will have been deposited prior to listing with the Chief Registrar
of the District Court of Luxembourg (Greffier en Chef du Tribunal
d'Arrondissement de et a Luxembourg), where these documents may be examined and
copies may be obtained on request.
2. Copies of the Restated Articles of Incorporation, as amended, and
By-Laws of FleetBoston, annual, quarterly and current reports of FleetBoston and
the indenture governing the terms of the senior notes will be available for
inspection at the office of the Paying Agent in Luxembourg during the term of
the senior notes. In addition, copies of these reports may be obtained at the
Paying Agent's office.
3. The independent certified public accountants of FleetBoston are
PricewaterhouseCoopers LLP.
4. The resolutions relating to the sale and issuance of the senior notes
were adopted by the Board of Directors of FleetBoston on April 18, 2000.
5. Except as disclosed in this prospectus supplement, the accompanying
prospectus, and the documents incorporated by reference, there has been no
material adverse change in the consolidated financial position of FleetBoston
and its subsidiaries since the date of the last audited financial statements.
FleetBoston is not involved in, and has no knowledge of any threat of, any
litigation, administrative proceedings or arbitration which is or may be
material in the context of the issue of the senior notes.
6. The senior notes have been accepted for clearance through Euroclear and
Clearstream, Luxembourg. The common code assigned to the senior notes is
. The International Security Identification Number (ISIN) allocated
to the senior notes is . The CUSIP number assigned to the senior
notes is .
S-26
PROSPECTUS
[FLEET BOSTON FINANCIAL LOGO]
FLEETBOSTON FINANCIAL CORPORATION
FleetBoston Financial Corporation may offer and sell --
-- Debt Securities
-- Warrants
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplements carefully before
you invest.
A security is not a deposit and the securities are not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other governmental agency.
This prospectus may be used to offer and sell securities only if accompanied by
the prospectus supplement for those securities.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE
SECURITIES OR DETERMINED THAT THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is May 30, 2000.
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We may provide information to you about the securities we are offering in
three separate documents that progressively provide more detail:
- This prospectus, which provides general information, some of which may
not apply to your securities;
- the accompanying prospectus supplement, which describes the terms of the
securities, some of which may not apply to your securities; and
- if necessary, a pricing supplement, which describes the specific terms of
your securities.
IF THE TERMS OF YOUR SECURITIES VARY BETWEEN THE PRICING SUPPLEMENT, THE
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE
INFORMATION IN THE FOLLOWING ORDER OF PRIORITY:
- THE PRICING SUPPLEMENT, IF ANY;
- THE PROSPECTUS SUPPLEMENT; AND
- THE PROSPECTUS.
We include cross-references in this prospectus and the accompanying
prospectus supplement to captions in these materials where you can find further
related discussions. The following Table of Contents and the Table of Contents
included in the accompanying prospectus supplement provide the pages on which
these captions are located.
------------------------
Unless indicated in the applicable prospectus supplement, neither we nor
the underwriters have taken any action that would permit us to publicly sell
these securities in any jurisdiction outside the United States. If you are an
investor outside the United States, you should inform yourself about and comply
with any restrictions as to the offering of the securities and the distribution
of this prospectus.
TABLE OF CONTENTS
PAGE
----
About This Prospectus.............. 2
Where You Can Find More Informa-
tion............................. 2
Forward-looking Statements......... 4
FleetBoston Financial
Corporation...................... 5
Consolidated Ratios of Earnings to
Fixed Charges.................... 5
Use of Proceeds.................... 6
Regulation and Supervision......... 6
Recent Legislation............... 7
Future Legislation............... 7
Description of Debt Securities..... 7
General.......................... 8
Registration and Transfer........ 9
Payment and Place of Payment..... 9
Global Securities................ 10
Events of Default................ 10
Modification and Waiver.......... 11
Consolidation, Merger and Sale of
Assets........................ 12
PAGE
----
Regarding the Trustee............ 12
International Offering........... 13
Senior Debt Securities............. 13
Restrictive Covenants............ 13
Defeasance....................... 14
Subordinated Debt Securities....... 15
Subordination.................... 15
Restrictive Covenants............ 16
Description of Warrants............ 17
Offered Warrants................. 17
Further Information in Prospectus
Supplement.................... 17
Significant Provisions of the
Warrant Agreements............ 18
Plan of Distribution............... 20
Experts............................ 21
Legal Opinions..................... 21
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, the "SEC," utilizing a "shelf" registration
process. Under this shelf process, we may from time to time sell any combination
of the debt securities or warrants described in this prospectus in one or more
offerings up to a total dollar amount of $3,951,868,750. We may also sell other
securities under the registration statement that will reduce the total dollar
amount of securities that we may sell under this prospectus. This prospectus
provides you with a general description of the debt securities or warrants we
may offer. Each time we sell debt securities or warrants, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. 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
under the heading "Where You Can Find More Information."
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "FLEETBOSTON," "WE," "US," "OUR" or similar
references mean FleetBoston Financial Corporation.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers, among other securities, the offer and sale of the
securities offered by this prospectus. The registration statement, including the
attached exhibits and schedules, contains additional relevant information about
us. The rules and regulations of the SEC allow us to omit certain information
included in the registration statement from this prospectus.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
Northeast Regional Office
7 World Trade Center
Suite 1300
New York, New York 10048
Midwest Regional Office
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates.
The SEC also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is:
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005 and the Boston Stock Exchange, 100 Franklin Street, Boston,
Massachusetts 02110.
The SEC allows us to "INCORPORATE BY REFERENCE" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any information that is superseded by information that is included directly
in this document or in a more recent incorporated document.
2
This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC. They contain important information about
us and our financial condition.
SEC FILINGS PERIOD
----------- ------
Annual Report on Form 10-K.......................... Year ended December 31, 1999, as filed on
March 9, 2000
Quarterly Report on Form 10-Q....................... Quarter ended March 31, 2000, as filed on May
15, 2000
The description of FleetBoston common stock set
forth in the FleetBoston registration statement
filed by Industrial National Corporation
(predecessor to FleetBoston) on Form 8-B dated May
29, 1970, and any amendment or report filed for
the purpose of updating that description; and
Current Reports on Form 8-K......................... Filed:
-January 12, 2000
-February 2, 2000, as amended by a Form 8-K/A
filed March 9, 2000
-March 9, 2000
-April 20, 2000
We incorporate by reference additional documents that we may file with the
SEC between the date of this prospectus and the date we sell all of the debt
securities. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us, or from the SEC through the SEC's Internet world wide web
site at the address described above. Documents incorporated by reference are
available from us without charge, excluding any exhibits to those documents,
unless the exhibit is specifically incorporated by reference as an exhibit in
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address:
Investor Relations Department
FleetBoston Financial Corporation
P.O. Box 2016, MA DE 10034F
Boston, Massachusetts 02106-2016
(617) 434-7858
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, those
contained in this prospectus or in any of the materials that we have
incorporated into this prospectus. If anyone does give you information of this
sort, you should not rely on it. If you are in a jurisdiction where offers to
sell, or solicitations of offers to purchase, the securities offered by this
document are unlawful, or if you are a person to whom it is unlawful to direct
these types of activities, then the offer presented in this document does not
extend to you. The information contained in this document speaks only as of the
date of this document unless the information specifically indicates that another
date applies.
3
FORWARD-LOOKING STATEMENTS
This prospectus, including information included or incorporated by
reference, contains certain forward-looking statements with respect to our
financial condition, results of operations, plans, objectives, future
performance and business, including, without limitation, statements preceded by,
followed by or that include the words "believes," "expects," "anticipates,"
"estimates" or similar expressions.
These forward-looking statements involve risks and uncertainties. Actual
results may differ materially from those contemplated by the forward-looking
statements due to many factors, including:
- general political and economic conditions, either domestically or
internationally or in the states in which we are doing business, may be
less favorable than expected;
- interest rate and currency fluctuations, equity and bond market
fluctuations and perceptions, the level of personal and corporate
customers' bankruptcies, and inflation, may be greater than expected;
- competitive product and pricing pressures among financial services
organizations may increase significantly;
- legislative or regulatory developments, including changes in laws
concerning taxes, banking, securities, insurance and other aspects of the
financial services industry, may adversely affect our business;
- technological changes, including the impact of the Internet on our
business, may be more difficult or expensive than anticipated;
- expected cost savings and revenue enhancements from mergers and
acquisitions, including our merger with BankBoston Corporation, may not
be fully realized or may not be realized within the expected time frame;
- the level of costs or difficulties related to the integration of acquired
businesses, including our merger with BankBoston, may be greater than
expected; and
- the negative impact of the divestitures completed or to be completed in
connection with our merger with BankBoston may be greater than expected.
4
FLEETBOSTON FINANCIAL CORPORATION
We are a diversified financial services company offering a comprehensive
array of innovative financial solutions to approximately 20 million customers in
more than 20 countries. Among our key lines of business are:
- Global Banking and Financial Services -- includes investment services,
corporate and investment banking, international banking, principal
investing, retail brokerage and investment banking;
- Commercial and Retail Banking -- includes domestic retail banking to
consumer and small business customers, community development banking, and
domestic commercial banking operations, including middle market and
asset-based lending, leasing, cash management, trade finance and
government banking services; and
- National Consumer Group -- includes mortgage banking, credit card
services and student loan processing.
On October 1, 1999, we completed the merger of BankBoston into us. In
connection with obtaining regulatory approvals for the merger, the Federal
Reserve Board and the United States Department of Justice required us to agree
to divest approximately $13 billion of deposits and $9 billion of loans from the
combined company, which is expected to result in an annualized reduction of net
income of approximately $160 million. On March 24, 2000, we completed the first
phase of these divestitures, involving approximately $4 billion of deposits and
approximately $3.6 billion of loans located primarily in Rhode Island and
Connecticut. We expect to complete the remaining phases of the divestitures
later in 2000.
All financial information set forth in this prospectus and the accompanying
prospectus supplement has been restated for all periods to give effect to the
BankBoston merger. Because the divestitures will not be significant to us, the
financial information has not been adjusted to show the effects of the
divestitures.
At March 31, 2000, our total assets on a consolidated basis were $187.8
billion, our consolidated total deposits were $109.2 billion and our
consolidated total stockholders' equity was $15.0 billion. Based on total
assets, we are the eighth largest financial holding company in the United
States.
Our principal office is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 346-4000.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges were as follows for
the five most recent fiscal years and the three months ended March 31, 2000:
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ------------------------------------
2000 1999 1998 1997 1996 1995
------------------ ---- ---- ---- ---- ----
Ratio of Earnings to Fixed
Charges:
Excluding Interest on
Deposits................... 2.85x 2.18x 2.62x 3.00x 2.79x 1.91x
Including Interest on
Deposits................... 1.91 1.53 1.62 1.72 1.61 1.39
-------------------------
For the purpose of computing the ratio of earnings to fixed charges,
"EARNINGS" consist of income before income taxes plus fixed charges, excluding
capitalized interest. "FIXED CHARGES" consist of interest on short-term debt and
long-term debt, including interest related to capitalized leases and capitalized
interest, and one-third of rent expense, which approximates the interest
component of that expense. In addition, where indicated, fixed charges include
interest on deposits.
5
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities for
general corporate purposes unless otherwise indicated in the prospectus
supplement, pricing supplement or term sheet relating to a specific issue of
securities. Our general corporate purposes may include extending credit to, or
funding investments in, our subsidiaries. The precise amounts and the timing of
our use of the net proceeds will depend upon our subsidiaries' funding
requirements and the availability of other funds. Until we use the net proceeds
from the sale of any of our securities for general corporate purposes, we will
use the net proceeds to reduce our short-term indebtedness or for temporary
investments. We expect that we will, on a recurrent basis, engage in additional
financings as the need arises to finance our growth, through acquisitions or
otherwise, or to fund our subsidiaries.
REGULATION AND SUPERVISION
As a financial holding company, we are subject to inspection, examination
and supervision by the Federal Reserve Board under the Bank Holding Company Act
of 1956, as amended by the Gramm-Leach-Bliley Act (the "GLB Act"), which is
discussed below under "-- Recent Legislation." Our banking subsidiaries are
subject to extensive supervision, examination and regulation by various bank
regulatory authorities and other governmental agencies in the states and
countries where we and our subsidiaries operate. Because we are a holding
company, our rights and the rights of our creditors, including the holders of
the debt securities we are offering under this prospectus, to participate in the
assets of any of our subsidiaries upon the subsidiary's liquidation or
reorganization will be subject to the prior claims of the subsidiary's creditors
except to the extent that we may ourselves be a creditor with recognized claims
against the subsidiary. In addition, there are various statutory and regulatory
limitations on the extent to which our banking subsidiaries can finance or
otherwise transfer funds to us or to our nonbanking subsidiaries, whether in the
form of loans, extensions of credit, investments or asset purchases. Such
transfers by any subsidiary bank to us or a nonbanking subsidiary are limited in
amount to 10% of the bank's capital and surplus and, with respect to us and all
such nonbanking subsidiaries, to an aggregate of 20% of each such bank's capital
and surplus. Furthermore, loans and extensions of credit are required to be
secured in specified amounts and are required to be on terms and conditions
consistent with safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to us from our banking subsidiaries. Under applicable
banking statutes, at December 31, 1999, our banking subsidiaries could have
declared additional dividends of approximately $1.4 billion without prior
regulatory approval. Federal and state regulatory agencies also have the
authority to limit further our banking subsidiaries' payment of dividends based
on other factors, such as the maintenance of adequate capital for such
subsidiary bank.
Under the policy of the Federal Reserve Board, we are expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support such subsidiary bank in circumstances where we might not do so absent
such policy. In addition, any subordinated loans by us to any of our subsidiary
banks would also be subordinate in right of payment to depositors and
obligations to other creditors of such subsidiary bank. Further the Crime
Control Act of 1990 amended the federal bankruptcy laws to provide that in the
event of our bankruptcy any commitment by us to our regulators to maintain the
capital of a banking subsidiary will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
For a discussion of the material elements of the regulatory framework
applicable to financial holding companies, bank holding companies and their
subsidiaries, and specific information
6
relevant to us, refer to our Annual Report on Form 10-K for the year ended
December 31, 1999 and any other subsequent reports filed by us with the SEC,
which are incorporated by reference in this prospectus. This regulatory
framework is intended primarily for the protection of depositors and the deposit
insurance funds that insure deposits of banks, rather than for the protection of
security holders. A change in the statutes, regulations or regulatory policies
applicable to us or our subsidiaries may have a material effect on our business.
RECENT LEGISLATION
The GLB Act, enacted in 1999, eliminates many of the restrictions placed on
the activities of certain qualified bank holding companies. A bank holding
company that qualifies as a "financial holding company" can expand into a wide
variety of financial services, including securities activities, insurance, and
merchant banking without the prior approval of the Federal Reserve Board. Our
election to become a "financial holding company," which we filed with the
Federal Reserve Board, became effective on March 13, 2000.
Banks are also authorized by the GLB Act to engage, through "financial
subsidiaries," in certain activities that are permissible for a financial
holding company and other activities that its applicable regulators deem to be
financial in nature or incidental to any such financial activity. The authority
of a bank to invest in a financial subsidiary is subject to a number of
conditions.
The GLB Act also contains a number of other provisions that will affect our
operations and the operations of all financial institutions. At this time we are
unable to predict the impact the GLB Act may have upon our or our subsidiaries'
financial condition or results of operations.
FUTURE LEGISLATION
Changes to the laws and regulations in the states and countries where we
and our subsidiaries do business can affect the operating environment of
financial holding companies and their subsidiaries in substantial and
unpredictable ways. We cannot accurately predict whether legislation will
ultimately be enacted, and, if enacted, the ultimate effect that it, or
implementing regulations, would have upon our or our subsidiaries' financial
condition or results of operations.
DESCRIPTION OF DEBT SECURITIES
We will issue the senior debt securities under an indenture dated as of
December 6, 1999, the "SENIOR INDENTURE," between us and The Bank of New York as
senior trustee. We will issue the subordinated debt securities under an
indenture dated as of December 6, 1999, the "SUBORDINATED INDENTURE," between us
and The Bank of New York as subordinated trustee. A copy of each of the
indentures are exhibits to the registration statement which contains this
prospectus.
In the following summaries, we describe the general terms and provisions of
the debt securities to be offered by any prospectus supplement. The particular
terms of the debt securities offered by any prospectus supplement and the
extent, if any, to which these general provisions may apply to the debt
securities so offered, will be described in the prospectus supplement relating
to those offered securities. The following summaries of all material terms of
the indentures are not complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the respective indentures,
including the definitions of terms.
The senior debt securities will be unsecured and will rank equally with all
of our other unsecured and unsubordinated indebtedness. The subordinated debt
securities will be unsecured and will be subordinated to all of our existing and
future senior indebtedness and other financial obligations, as described under
"Subordinated Debt Securities -- Subordination" beginning on page 15.
7
GENERAL
We may issue the debt securities from time to time, without limitation as
to aggregate principal amount and in one or more series. We expect from time to
time to incur additional indebtedness which may be senior to the debt
securities. Neither the indentures nor the debt securities will limit or
otherwise restrict the amount of other indebtedness which we may incur or other
securities which we or our subsidiaries may issue, including indebtedness which
may rank senior to the debt securities. The debt securities will not be secured.
We may issue debt securities upon the satisfaction of conditions contained
in the indentures, including the delivery to the applicable trustee of a
resolution of our board of directors and a certificate of an authorized officer
that fixes or establishes the terms of the debt securities being issued. Any
resolution or officer's certificate approving the issuance of any issue of debt
securities will include the terms of that issue of debt securities, including:
- the title and series designation;
- the aggregate principal amount and the limit, if any, on the aggregate
principal amount or initial public offering price of the debt securities
which may be issued under the applicable indenture;
- the principal amount payable, whether at maturity or upon earlier
acceleration, whether the principal amount will be determined with
reference to an index, formula or other method which may be calculated,
without limitation, with reference to the value of currencies, securities
or baskets of securities, commodities, indices or other measurements to
which any such amount payable is linked, and whether the debt securities
will be issued as original issue discount securities (as defined below);
- the date or dates on which the principal of the debt securities is
payable;
- any fixed or variable interest rate or rates per annum or the method or
formula for determining an interest rate;
- the date from which any interest will accrue;
- any interest payment dates;
- whether the debt securities are senior or subordinated, and if
subordinated, the terms of the subordination if different from that
summarized in this prospectus;
- the price or prices at which the debt securities will be issued, which
may be expressed as a percentage of the aggregate principal amount of
those debt securities;
- the stated maturity date;
- whether the debt securities are to be issued in global form;
- any sinking fund requirements;
- any provisions for redemption, the redemption price and any remarketing
arrangements;
- the minimum denominations;
- whether the debt securities are denominated or payable in United States
dollars or a foreign currency or units of two or more foreign currencies;
- the form in which we will issue the debt securities, whether registered,
bearer or both, and any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of the debt
securities in either form;
- information with respect to book-entry procedures;
- the place or places where payments or deliveries on the debt securities
will be made and the debt securities may be presented for registration of
transfer or exchange;
- whether any of the debt securities will be subject to defeasance in
advance of the date for redemption or the stated maturity date;
- whether, and the terms and conditions relating to when, we may satisfy
all or part of our obligations with regard to
8
payment upon maturity, or any redemption or required repurchase or in
connection with any exchange provisions, or any interest payment, by
delivering to the holders of the debt securities, other securities, which
may or may not be issued by us, or a combination of cash, securities
and/or property, "MATURITY CONSIDERATION";
- the terms, if any, upon which the debt securities are convertible into
other securities of ours or another issuer and the terms and conditions
upon which any conversion will be effected, including the initial
conversion price or rate, the conversion period and any other provisions
in addition to or instead of those described in this prospectus; and
- any other terms of the debt securities which are not inconsistent with
the provisions of the applicable indenture.
Please see the accompanying prospectus supplement, pricing supplement or
the terms sheet you have received or will receive for the terms of the specific
debt securities we are offering. We may deliver this prospectus before or
concurrently with the delivery of a terms sheet. We may issue debt securities
under the indentures upon the exercise of warrants to purchase debt securities.
See "Description of Warrants." Nothing in the indentures or in the terms of the
debt securities will prohibit the issuance of securities representing
subordinated indebtedness that is senior or junior to the subordinated debt
securities.
Prospective purchasers of debt securities should be aware that special U.S.
Federal income tax, accounting and other considerations may be applicable to
instruments such as the debt securities. The prospectus supplement relating to
an issue of debt securities will describe these considerations, if they apply.
Debt securities may be issued as "ORIGINAL ISSUE DISCOUNT SECURITIES" which
bear no interest or interest at a rate which at the time of issuance is below
market rates and which will be sold at a substantial discount below their
principal amount. In the event that the maturity of any original issue discount
security is accelerated, the amount payable to the holder of the original issue
discount security upon acceleration will be determined in accordance with the
applicable prospectus supplement, the terms of the security and the relevant
indenture, but will be an amount less than the amount payable at the maturity of
the principal of that original issue discount security. Special federal income
tax and other considerations relating to original issue discount securities will
be described in the applicable prospectus supplement.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable prospectus supplement, we will
issue each series of debt securities in registered form only, without coupons.
The indentures, however, provide that we may also issue debt securities in
bearer form only, or in both registered and bearer form. If debt securities are
issued in bearer form, the prospectus supplement will contain additional
provisions that apply to those debt securities.
Holders may present debt securities in registered form for transfer or
exchange for other debt securities of the same series at the offices of the
trustee according to the terms of the applicable indenture. In no event,
however, will debt securities in registered form be exchangeable for debt
securities in bearer form.
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities issued in fully registered form will be issued without coupons
and in denominations of $1,000 or integral multiples of $1,000.
No service charge will be made for any transfer or exchange of the debt
securities but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with any transfer or exchange.
PAYMENT AND PLACE OF PAYMENT
We will pay or deliver principal, maturity consideration and any premium
and interest in the manner, at the places and subject to the restrictions set
forth in the applicable indenture,
9
the debt securities and the applicable prospectus supplement. However, at our
option, we may pay any interest by check mailed to the holders of registered
debt securities at their registered addresses.
GLOBAL SECURITIES
Each indenture provides that we may issue debt securities in global form.
If any series of debt securities is issued in global form, the prospectus
supplement will describe any circumstances under which beneficial owners of
interests in any of those global debt securities may exchange their interests
for debt securities of that series and of like tenor and principal amount in any
authorized form and denomination.
EVENTS OF DEFAULT
The following are events of default under the indentures with respect to
debt securities of any series:
- default in the payment of any principal or premium on debt securities of
that series when due;
- default in the payment of any interest on debt securities of that series
when due, which continues for 30 days;
- default in the delivery or payment of the maturity consideration on debt
securities of that series when due;
- default in the deposit of any sinking fund payment on debt securities of
that series when due;
- default in the performance of any other obligation contained in the
applicable indenture for the benefit of that series or in the debt
securities of that series, which continues for 60 days after written
notice;
- specified events in bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to debt securities of
that series.
If an event of default occurs and is continuing for any series of senior
debt securities, the senior trustee or the holders of at least 25% in aggregate
principal amount or issue price of the outstanding securities of that series may
declare all amounts, or any lesser amount provided for in the debt securities of
that series, to be due and payable or deliverable immediately.
The subordinated trustee and the holders of subordinated debt securities
will not be entitled to accelerate the maturity of the subordinated debt
securities upon the occurrence of any of the events of default described above
except in the case of certain events relating to bankruptcy, insolvency or
reorganization. There is no right of acceleration in the case of a default in
the performance of any covenant with respect to the subordinated debt
securities, including the payment of interest and principal or the delivery of
the maturity consideration.
At any time after the trustee or the holders have accelerated a series of
debt securities, but before the senior trustee has obtained a judgment or decree
for payment of money due or delivery of the maturity consideration, the holders
of a majority in aggregate principal amount or issue price of outstanding debt
securities of that series may rescind and annul that acceleration and its
consequences, provided that all payments and/or deliveries due, other than those
due as a result of acceleration, have been made and all events of default have
been remedied or waived.
The holders of a majority in principal amount or aggregate issue price of
the outstanding debt securities of any series may waive any default with respect
to that series, except a default:
- in the payment of any amounts due and payable or deliverable under the
debt securities of that series; or
- in an obligation contained in, or a provision of, an indenture which
cannot be modified under the terms of that indenture without the consent
of each holder of each series of debt securities affected.
The holders of a majority in principal amount or issue price of the
outstanding debt
10
securities of a series may direct the time, method and place of conducting any
proceeding for any remedy available to the applicable trustee or exercising any
trust or power conferred on the trustee with respect to debt securities of that
series, provided that any direction is not in conflict with any rule of law or
the indenture. Subject to the provisions of the indenture relating to the duties
of the trustee, before proceeding to exercise any right or power under the
indenture at the direction of the holders, the trustee is entitled to receive
from those holders reasonable security or indemnity against the costs, expenses
and liabilities which it might incur in complying with any direction.
Unless otherwise stated in the applicable prospectus supplement, any series
of debt securities issued under any indenture will not have the benefit of any
cross-default provisions with any of our other indebtedness.
A holder of any debt security of any series will have the right to
institute a proceeding with respect to the indenture or for any remedy under the
indenture, if:
- that holder previously gives to the trustee written notice of a
continuing event of default with respect to debt securities of that
series;
- the holders of not less than 25% in aggregate principal amount or issue
price of the outstanding debt securities of that series also will have
made written request and offered the trustee indemnity satisfactory to
the trustee to institute that proceeding as trustee;
- the trustee will not have received from the holders of a majority in
principal amount or issue price of the outstanding debt securities of
that series a direction inconsistent with the request; and
- the trustee will have failed to institute the proceeding within 60 days.
However, any holder of a debt security has the absolute right to institute
suit for any defaulted payment after the due dates for payment under that debt
security.
We are required to furnish to the trustees annually a statement as to the
performance of our obligations under the indentures and as to any default in
that performance.
MODIFICATION AND WAIVER
We and the applicable trustee may amend and modify each indenture with the
consent of holders of at least 66 2/3% in principal amount or issue price of
each series of debt securities issued under that indenture affected. However,
without the consent of each holder of any debt security issued under the
applicable indenture, we may not amend or modify that indenture to:
- change the stated maturity date of the principal or maturity
consideration of, or any installment of principal or interest on, any
debt security issued under that indenture;
- reduce the principal amount or maturity consideration of, the rate of
interest on, or any premium payable upon the redemption of any debt
security issued under that indenture;
- reduce the amount of principal or maturity consideration of an original
issue discount security issued under that indenture payable upon
acceleration of its maturity;
- change the place or currency of payment of principal or maturity
consideration of, or any premium or interest on, any debt security issued
under that indenture;
- impair the right to institute suit for the enforcement of any payment or
delivery on or with respect to any debt security issued under that
indenture;
- reduce the percentage in principal amount or issue price of debt
securities of any series issued under that indenture, the consent of
whose holders is required to modify or amend the indenture or to waive
compliance with certain provisions of the indenture; or
- reduce the percentage in principal amount or issue price of debt
securities of any series issued under that indenture,
11
the consent of whose holders is required to waive any past default.
The holders of at least a majority in principal amount or issue price of
the outstanding debt securities of any series issued under that indenture may,
with respect to that series, waive past defaults under the indenture, except as
described under "-- Events of Default" beginning on page 10.
We and the trustee may also amend and modify each indenture without the
consent of any holder for any of the following purposes:
- to evidence the succession of another person to us;
- to add to our covenants for the benefit of the holders of all or any
series of securities;
- to add events of default;
- to add or change any provisions of the indentures to facilitate the
issuance of bearer securities;
- to change or eliminate any of the provisions of the applicable indenture,
so long as any such change or elimination will become effective only when
there is no outstanding security of any series which is entitled to the
benefit of that provision;
- to establish the form or terms of debt securities of any series;
- to evidence and provide for the acceptance of appointment by a successor
trustee;
- to cure any ambiguity, to correct or supplement any provision in the
applicable indenture, or to make any other provisions with respect to
matters or questions arising under that indenture, so long as the
interests of holders of debt securities of any series are not adversely
affected in any material respect under that indenture;
- to convey, transfer, assign, mortgage or pledge any property to or with
the trustee; or
- to provide for conversion rights of the holders of the debt securities of
any series to enable those holders to convert those securities into other
securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise indicated in the applicable prospectus supplement, we may
consolidate or merge with or into any other corporation, and we may sell, lease
or convey all or substantially all of our assets to any corporation, provided
that:
- the resulting corporation, if other than us, is a corporation organized
and existing under the laws of the United States of America or any U.S.
state and assumes all of our obligations to:
- pay or deliver the principal or maturity consideration of, and any
premium, or interest on, the debt securities; and
- perform and observe all of our other obligations under the
indentures, and
- we are not, or any successor corporation, as the case may be, is not,
immediately after any consolidation or merger, in default under the
indentures.
Neither of the indentures provides for any right of acceleration in the
event of a consolidation, merger, sale of all or substantially all of the
assets, recapitalization or change in our stock ownership. In addition, the
indentures do not contain any provision which would protect the holders of debt
securities against a sudden and dramatic decline in credit quality resulting
from takeovers, recapitalizations or similar restructurings.
REGARDING THE TRUSTEE
We maintain banking relations with the trustee. In addition, our banking
subsidiaries maintain deposit accounts and correspondent banking relations with
the trustee.
The occurrence of any default under either the senior indenture, the
subordinated indenture or the indenture between us and the trustee
12
relating to our junior subordinated debentures, which may also be issued under
the registration statement, could create a conflicting interest for the trustee
under the Trust Indenture Act. If such default has not been cured or waived
within 90 days after the trustee has or acquired a conflicting interest, the
trustee would generally be required by the Trust Indenture Act to eliminate such
conflicting interest or resign as trustee with respect to the debt securities
issued under the senior indenture or the subordinated indenture, or with respect
to the junior subordinated debentures issued to certain Delaware statutory
business trusts of ours under a separate indenture. In the event of the
trustee's resignation, we are required to promptly appoint a successor trustee
with respect to the affected securities.
The Trust Indenture Act also imposes certain limitations on the right of
the trustee, as a creditor of us, to obtain payment of claims in certain cases,
or to realize on certain property received in respect to any cash claim or
otherwise. The trustee will be permitted to engage in other transactions with
us, provided that if it acquires a conflicting interest within the meaning of
Section 310 of the Trust Indenture Act, it must generally either eliminate such
conflict or resign.
INTERNATIONAL OFFERING
If specified in the applicable prospectus supplement, we may issue debt
securities outside the United States. Those debt securities may be issued in
bearer form and will be described in the applicable prospectus supplement. In
connection with any offering outside the United States, we will designate paying
agents, registrars or other agents with respect to the debt securities, as
specified in the applicable prospectus supplement.
We will describe in the applicable prospectus supplement whether our debt
securities issued outside the United States (1) may be subject to certain
selling restrictions, (2) may be listed on one or more foreign stock exchanges
and (3) may have special United States tax and other considerations applicable
to an offering outside the United States.
SENIOR DEBT SECURITIES
The senior debt securities will be our direct, unsecured obligations and
will rank pari passu with all of our other outstanding senior indebtedness.
RESTRICTIVE COVENANTS
DISPOSITION OF VOTING STOCK OF CERTAIN SUBSIDIARIES. We may not sell or
otherwise dispose of, or permit the issuance of, any voting stock or any
security convertible or exercisable into voting stock of a "principal
constituent bank" of ours or any subsidiary of ours which owns a controlling
interest in a principal constituent bank. A "PRINCIPAL CONSTITUENT BANK" is
defined in the senior indenture as Fleet National Bank and any other of our
majority-owned banking subsidiaries designated as a principal constituent bank.
Any designation of a banking subsidiary as a principal constituent bank with
respect to senior debt securities of any series will remain effective until the
senior debt securities of that series have been repaid. As of the date of this
prospectus, no banking subsidiaries other than Fleet National Bank have been
designated as principal constituent banks with respect to any series of debt
securities.
This restriction does not apply to dispositions made by us or any
subsidiary:
- acting in a fiduciary capacity for any person other than us or any
subsidiary;
- to us or any of our wholly-owned subsidiaries;
- if required by law for the qualification of directors;
- to comply with an order of a court or regulatory authority;
- in connection with a merger of, or consolidation of, a principal
constituent bank with or into a wholly-owned subsidiary or a
majority-owned banking subsid-
13
iary, as long as we hold, directly or indirectly, in the entity surviving
that merger or consolidation, not less than the percentage of voting
stock we held in the principal constituent bank prior to that action;
- if that disposition or issuance is for fair market value as determined by
our board of directors, and, if after giving effect to that disposition
or issuance and any potential dilution, we and our wholly-owned
subsidiaries will own directly not less than 80% of the voting stock of
that principal constituent bank or any subsidiary which owns a principal
constituent bank;
- if a principal constituent bank sells additional shares of voting stock
to its stockholders at any price, if, after that sale, we hold directly
or indirectly not less than the percentage of voting stock of that
principal constituent bank we owned prior to that sale; or
- if we or a subsidiary pledges or creates a lien on the voting stock of a
principal constituent bank to secure a loan or other extension of credit
by a majority-owned banking subsidiary subject to Section 23A of the
Federal Reserve Act.
LIMITATION UPON LIENS ON CERTAIN CAPITAL STOCK. We may not at any time,
directly or indirectly, create, assume, incur or permit to exist any mortgage,
pledge, encumbrance or lien or charge of any kind upon:
- any shares of capital stock of any principal constituent bank, other than
directors' qualifying shares; or
- any shares of capital stock of a subsidiary which owns capital stock of
any principal constituent bank.
This restriction does not apply to:
- liens for taxes, assessments or other governmental charges or levies
which are not yet due or are payable without penalty or which we are
contesting in good faith by appropriate proceedings so long as we have
set aside on our books adequate reserves to cover the contested amount;
or
- the lien of any judgment, if that judgment is discharged, or stayed on
appeal or otherwise, within 60 days.
DEFEASANCE
We may terminate or "defease" our obligations under the senior indenture
with respect to the senior debt securities of any series by taking the following
steps:
- depositing irrevocably with the senior trustee an amount which through
the payment of interest, principal or premium, if any, will provide an
amount sufficient to pay the entire amount of the senior debt securities:
- in the case of senior debt securities denominated in U.S.
dollars, U.S. dollars or U.S. government obligations;
- in the case of senior debt securities denominated in a foreign
currency, money in that foreign currency or foreign government
obligations of the foreign government or governments issuing
that foreign currency; or
- a combination of money and U.S. government obligations or
foreign government obligations;
- delivering:
- an opinion of independent counsel that the holders of the
senior debt securities of that series will have no federal
income tax consequences as a result of that deposit and
termination;
- if the senior debt securities of that series are then listed on
the New York Stock Exchange, an opinion of counsel that those
senior debt securities will not be delisted as a result of the
14
exercise of this defeasance option;
- an opinion of counsel as to certain other matters; and
- officers' certificates certifying as to compliance with the
senior indenture and other matters;
- no event of default under the senior indenture may exist or be caused by
the defeasance;
- the defeasance will not cause an event of default under any of our other
agreements or instruments; and
- we will have paid all other amounts due and owing under the senior
indenture.
SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be our direct, unsecured obligations.
Unless otherwise specified in the applicable prospectus supplement, the
subordinated debt securities will rank equal with all of our outstanding
subordinated indebtedness that is not specifically stated to be junior to the
subordinated debt securities.
SUBORDINATION
The subordinated debt securities will be subordinated in right of payment
to all "senior indebtedness," as defined below. In certain events of insolvency,
payments on the subordinated debt securities will also be effectively
subordinated in right of payment to all "other financial obligations," as
defined below. In certain circumstances relating to our liquidation,
dissolution, winding up, reorganization, insolvency or similar proceedings, the
holders of all senior indebtedness will first be entitled to receive payment in
full before the holders of the subordinated debt securities will be entitled to
receive any payment on the subordinated debt securities. If, after all payments
have been made to the holders of senior indebtedness, (A) there are amounts
available for payment on the subordinated debt securities and (B) any person
entitled to payment according to the terms of our other financial obligations,
as defined on page 16, has not received full payment, then amounts available for
payments on the subordinated debt securities will first be used to pay in full
those other financial obligations before we may make any payment on the
subordinated debt securities. This obligation to pay over these excess amounts
does not exist for any of our "EXISTING SUBORDINATED INDEBTEDNESS" issued prior
to November 30, 1992.
In the event of the acceleration of the maturity of any debt securities, we
will have to repay all senior indebtedness and other financial obligations
before we can make any payment on the subordinated debt securities.
In addition, we may make no payment on the subordinated debt securities in
the event:
- there is a default in any payment or delivery with respect to any senior
indebtedness; or
- there is an event of default with respect to any senior indebtedness
which permits the holders of that senior indebtedness to accelerate the
maturity of the senior indebtedness.
By reason of this subordination in favor of the holders of senior
indebtedness, in the event of an insolvency, our creditors who are not holders
of senior indebtedness or the subordinated debt securities may recover less,
proportionately, than holders of senior indebtedness and may recover more,
proportionately, than holders of the subordinated debt securities. By reason of
the obligation of the holders of subordinated debt securities to pay over any
amount remaining after payment of senior indebtedness to persons in respect of
our other financial obligations, in the event of insolvency, holders of our
existing subordinated indebtedness may recover more, ratably, than the holders
of subordinated debt securities.
Unless otherwise specified in the prospectus supplement relating to the
particular series of subordinated debt securities, "SENIOR INDEBT-
15
EDNESS" is defined in the subordinated indenture as:
- the principal of, premium, if any, and interest on all of our
"indebtedness for money borrowed," as defined below, except (A) existing
subordinated indebtedness and other subordinated debt securities issued
under the subordinated indenture, (B) any indebtedness which is expressly
stated to be junior in right of payment to the subordinated debt
securities and (C) indebtedness which is expressly stated to rank equal
with the subordinated debt securities; and
- any deferrals, renewals or extensions of any senior indebtedness.
The term "INDEBTEDNESS FOR MONEY BORROWED" means:
- any of our obligations or any obligation we have guaranteed for the
repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments; and
- any of our deferred payment obligations or any such obligation we have
guaranteed for the payment of the purchase price of property or assets
evidenced by a note or similar instrument.
Unless otherwise specified in the prospectus supplement relating to the
particular series of subordinated debt securities offered by that prospectus
supplement, "OTHER FINANCIAL OBLIGATIONS" means all of our obligations to make
payment pursuant to the terms of financial instruments, such as:
- securities contracts and foreign currency exchange contracts;
- derivative instruments, such as swap agreements, including interest rate
and foreign exchange rate swap agreements, cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign exchange
rate agreements, options, commodity futures contracts, commodity option
contracts; and
- similar financial instruments, other than obligations on account of
senior indebtedness and obligations on account of indebtedness for money
borrowed ranking equal with or subordinate to the subordinated debt
securities.
As of March 31, 2000, we had an aggregate of $4.3 billion in subordinated
debt outstanding at the parent company level, of which $868 million is
subordinated to our senior indebtedness and $3.4 billion is subordinated to our
senior indebtedness and other financial obligations.
The subordinated indenture does not limit or prohibit the incurrence of
additional senior indebtedness or other financial obligations, which may include
indebtedness that is senior to the subordinated debt securities, but subordinate
to our other obligations. Any prospectus supplement relating to a particular
series of subordinated debt securities will set forth the aggregate amount of
our indebtedness senior to the subordinated debt securities as of a recent
practicable date.
The subordinated debt securities will rank equal in right of payment with
each other and with the existing subordinated indebtedness, subject to the
obligations of the holders of subordinated debt securities to pay over amounts
remaining after payment of senior indebtedness to persons in respect of other
financial obligations.
The prospectus supplement may further describe the provisions, if any,
which may apply to the subordination of the subordinated debt securities of a
particular series.
RESTRICTIVE COVENANTS
The subordinated indenture does not contain any significant restrictive
covenants. The prospectus supplement relating to a series of subordinated debt
securities may describe certain restrictive covenants, if any, to which we may
be bound under the subordinated indenture.
16
DESCRIPTION OF WARRANTS
OFFERED WARRANTS
We may issue warrants that are debt warrants or universal warrants. We may
offer warrants separately or together with one or more additional warrants or
debt securities or any combination of those securities in the form of units, as
described in the applicable prospectus supplement. If we issue warrants as part
of a unit, the accompanying prospectus supplement will specify whether those
warrants may be separated from the other securities in the unit prior to the
warrants' expiration date. Universal warrants issued in the United States may
not be so separated prior to the 91st day after the issuance of the unit, unless
otherwise specified in the applicable prospectus supplement.
Debt Warrants. We may issue, together with debt securities or separately,
warrants for the purchase of debt securities on terms to be determined at the
time of sale. We refer to this type of warrant as a "DEBT WARRANT."
Universal Warrants. We may also issue warrants to purchase or sell, on
terms to be determined at the time of sale:
- securities of an entity not affiliated with us, a basket of those
securities, an index or indices of those securities or any combination of
the above;
- currencies; or
- commodities.
We refer to the property in the above clauses as "WARRANT PROPERTY." We
refer to this type of warrant as a "UNIVERSAL WARRANT." We may satisfy our
obligations, if any, with respect to any universal warrants by delivering the
warrant property or, in the case of warrants to purchase or sell securities or
commodities, the cash value of the securities or commodities, as described in
the applicable prospectus supplement.
FURTHER INFORMATION IN PROSPECTUS SUPPLEMENT
General Terms of Warrants. The applicable prospectus supplement will
contain, where applicable, the following terms of and other information relating
to the warrants:
- the specific designation and aggregate number of, and the price at which
we will issue, the warrants;
- the currency with which the warrants may be purchased;
- the date on which the right to exercise the warrants will begin and the
date on which that right will expire or, if you may not continuously
exercise the warrants throughout that period, the specific date or dates
on which you may exercise the warrants;
- whether the warrants will be issued in fully registered form or bearer
form, in definitive or global form or in any combination of these forms,
although, in any case, the form of a warrant included in a unit will
correspond to the form of the unit and of any debt security included in
that unit;
- any applicable material United States federal income tax consequences;
- the identity of the warrant agent for the warrants and of any other
depositaries, execution or paying agents, transfer agents, registrars,
determination, or other agents;
- the proposed listing, if any, of the warrants or any securities
purchasable upon exercise of the warrants on any securities exchange;
- if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;
- information with respect to book-entry procedures, if any;
- the antidilution provisions of the warrants, if any;
- any redemption or call provisions;
17
- whether the warrants are to be sold separately or with other securities
as part of units; and
- any other terms of the warrants.
Additional Terms of Debt Warrants. The prospectus supplement will contain,
where applicable, the following terms of and other information relating to any
debt warrants:
- the designation, aggregate principal amount, currency and terms of the
debt securities that may be purchased upon exercise of the debt warrants;
- if applicable, the designation and terms of the debt securities with
which the debt warrants are issued and the number of the debt warrants
issued with each of the debt securities;
- if applicable, the date on and after which the debt warrants and the
related debt securities will be separately transferable; and
- the principal amount of debt securities purchasable upon exercise of each
debt warrant, the price at which and the currency in which the debt
securities may be purchased and the method of exercise.
Additional Terms of Universal Warrants. The applicable prospectus
supplement will contain, where applicable, the following terms of and other
information relating to any universal warrants:
- whether the universal warrants are put warrants or call warrants and
whether you or we will be entitled to exercise the warrants;
- the specific warrant property, and the amount or the method for
determining the amount of the warrant property, purchasable or saleable
upon exercise of each universal warrant;
- the price at which and the currency with which the underlying securities,
currencies or commodities may be purchased or sold upon the exercise of
each universal warrant, or the method of determining that price;
- whether the exercise price may be paid in cash, by the exchange of any
other security offered with the universal warrants or both and the method
of exercising the universal warrants; and
- whether the exercise of the universal warrants is to be settled in cash
or by delivery of the underlying securities, commodities, or both.
SIGNIFICANT PROVISIONS OF THE WARRANT AGREEMENTS
We will issue the warrants under one or more warrant agreements to be
entered into between us and a bank or trust company, as warrant agent, in one or
more series, which will be described in the prospectus supplement for the
warrants. The forms of warrant agreements are filed as exhibits to the
registration statement. The following summaries of significant provisions of the
warrant agreements and the warrants are not intended to be comprehensive and
holders of warrants should review the detailed provisions of the relevant
warrant agreement for a full description and for other information regarding the
warrants.
Modifications without Consent of Warrantholders. We and the warrant agent
may amend the terms of the warrants and the warrant certificates without the
consent of the holders to:
- cure any ambiguity;
- cure, correct or supplement any defective or inconsistent provision; or
- amend the terms in any other manner which we may deem necessary or
desirable and which will not adversely affect the interests of the
affected holders in any material respect.
18
Enforceability of Rights of Warrantholders. The warrant agents will act
solely as our agents in connection with the warrant certificates and will not
assume any obligation or relationship of agency or trust for or with any holders
of warrant certificates or beneficial owners of warrants. Any holder of warrant
certificates and any beneficial owner of warrants may, without the consent of
any other person, enforce by appropriate legal action, on its own behalf, its
right to exercise the warrants evidenced by the warrant certificates in the
manner provided for in that series of warrants or pursuant to the applicable
warrant agreement. No holder of any warrant certificate or beneficial owner of
any warrants will be entitled to any of the rights of a holder of the debt
securities or any other warrant property, if any, purchasable upon exercise of
the warrants, including, without limitation, the right to receive the payments
on those debt securities or other warrant property or to enforce any of the
covenants or rights in the relevant indenture or any other similar agreement.
Registration and Transfer of Warrants. Subject to the terms of the
applicable warrant agreement, warrants in registered, definitive form may be
presented for exchange and for registration of transfer at the corporate trust
office of the warrant agent for that series of warrants, or at any other office
indicated in the prospectus supplement relating to that series of warrants,
without service charge. However, the holder will be required to pay any taxes
and other governmental charges as described in the warrant agreement. The
transfer or exchange will be effected only if the warrant agent for the series
of warrants is satisfied with the documents of title and identity of the person
making the request.
New York Law to Govern. The warrants and each warrant agreement will be
governed by, and construed in accordance with, the laws of the State of New
York.
19
PLAN OF DISTRIBUTION
FleetBoston may sell securities:
- to the public through a group of underwriters managed or co-managed by
one or more underwriters, which may include FleetBoston Robertson
Stephens Inc. ("FRS"), Fleet Securities Inc. ("FSI"), or other
affiliates;
- through one or more agents, which may include FRS, FSI or other
affiliates; or
- directly to purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions:
- at a fixed price, or prices, which may be changed from time to time;
- at market prices prevailing at the time of sale;
- at prices related to those prevailing market prices; or
- at negotiated prices.
Each prospectus supplement will describe the method of distribution of the
securities and any applicable restrictions.
The prospectus supplement with respect to the securities of a particular
series will describe the terms of the offering of the securities, including the
following:
- the name of the agent or the name or names of any underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agent or
underwriters;
- all other items constituting underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- any exchanges on which the securities will be listed.
We may agree to enter into an agreement to indemnify the agents and the
several underwriters against certain civil liabilities, including liabilities
under the Securities Act or to contribute to payments the agents or the
underwriters may be required to make.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase debt securities or warrants from us pursuant to delayed
delivery contracts providing for payment and delivery on the date stated in the
prospectus supplement. Each contract will be for an amount not less than, and
the aggregate amount of securities sold pursuant to those contracts will be
equal to, the respective amounts stated in the prospectus supplement.
Institutions with whom the contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
will in all cases be subject to our approval. Delayed delivery contracts will
not be subject to any conditions except that:
- the purchase by an institution of the debt securities or warrants covered
under that contract will not at the time of delivery be prohibited under
the laws of the jurisdiction to which that institution is subject; and
- if the debt securities or warrants are also being sold to underwriters
acting as principals for their own account, the underwriters will have
purchased those debt securities or warrants not sold for delayed
delivery. The underwriters and other persons acting as our agents will
not have any responsibility in respect of the validity or performance of
delayed delivery contracts.
Certain of the underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for, us or
one or more of our affiliates in the ordinary course of business.
20
FRS and FSI are our wholly-owned subsidiaries. Accordingly, the
distribution of securities by FRS and/or FSI will conform to the requirements
set forth in Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. In accordance with Rule 2720, no member of the NASD
participating in an underwriting will be permitted to confirm sales to accounts
over which it exercises discretionary authority without prior specific written
approval of the customer.
Certain of the underwriters may use this prospectus and the accompanying
prospectus supplement for offers and sales related to market-making transactions
in the securities. These underwriters may act as principal or agent in these
transactions, and the sales will be made at prices related to prevailing market
prices at the time of sale.
EXPERTS
Our consolidated financial statements incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31, 1999
have been so incorporated by reference in this document in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given upon the
authority of that firm as experts in accounting and auditing.
LEGAL OPINIONS
The validity of the securities offered hereby will be passed upon for us by
Edwards & Angell, LLP, 101 Federal Street, Boston, Massachusetts 02110-1800. V.
Duncan Johnson, a partner of Edwards & Angell, LLP, is a director of Fleet Bank
(RI), National Association, one of our wholly-owned subsidiaries, and
beneficially owns 9,856 shares of our common stock. Unless otherwise specified
in the applicable prospectus supplement, Brown & Wood LLP, One World Trade
Center, New York, New York 10048-0557, will pass upon certain matters for the
underwriters.
21
PRINCIPAL OFFICE OF
FLEETBOSTON FINANCIAL CORPORATION
100 Federal Street
Boston, MA 02110
REGISTERED OFFICE OF
FLEETBOSTON FINANCIAL CORPORATION
CT Corp. System
10 Weybosset Street
Providence, RI 02903
PRINCIPAL PAYING AGENT, REGISTRAR AND TRUSTEE
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10005
PAYING AGENTS
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10005
BANQUE INTERNATIONALE A LUXEMBOURG S.A.
69, route dEsch
L-2953 Luxembourg
Attention: Fiscal and Listing Agencies
LEGAL ADVISORS TO LEGAL ADVISORS TO
FLEETBOSTON FINANCIAL CORPORATION THE UNDERWRITERS
(as to United States Law) (as to United States Law)
EDWARDS & ANGELL, LLP SIDLEY AUSTIN BROWN & WOOD LLP
101 Federal Street 875 Third Avenue
Boston, MA 02110-1800 New York, NY 10022
INDEPENDENT ACCOUNTANTS TO
FLEETBOSTON FINANCIAL CORPORATION
PRICEWATERHOUSECOOPERS LLP
160 Federal Street
Boston, MA 02110
LISTING AGENT
BANQUE INTERNATIONALE A LUXEMBOURG S.A.
69, route dEsch
L-2953 Luxembourg
Attention: Fiscal and Listing Agencies
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