FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-72912
PROSPECTUS SUPPLEMENT
FEBRUARY 10, 2003
(TO PROSPECTUS DATED NOVEMBER 21, 2001)
$500,000,000
[FLEET BOSTON FINANCIAL LOGO]
FLEETBOSTON FINANCIAL CORPORATION
3.85% SENIOR NOTES DUE 2008
------------------------
The 3.85% senior notes will mature on February 15, 2008. Interest on the
senior notes is payable semiannually on February 15 and August 15 of each year,
beginning August 15, 2003. The senior notes are not redeemable prior to
maturity. There is no sinking fund. The senior notes are unsecured.
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.
------------------------
PER NOTE TOTAL
---------------- ----------------
Price to Public(1).......................................... 99.896% $499,480,000
Underwriting Discounts and Commissions...................... 0.350% $1,750,000
Proceeds (before expenses) to FleetBoston................... 99.546% $497,730,000
------------
(1) Plus accrued interest, if any, from February 13, 2003.
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.
Delivery of the senior notes, in book-entry form only, will be made through
the facilities of The Depository Trust Company on or about February 13, 2003.
------------------------
Joint Book Running Managers
BANC OF AMERICA SECURITIES LLC GOLDMAN, SACHS & CO. FLEET SECURITIES, INC.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Updating Information........................................ S-1
Where You Can Find More Information......................... S-1
Forward-looking Statements.................................. S-3
FleetBoston Financial Corporation........................... S-4
Recent Developments......................................... S-4
Selected Consolidated Financial Data of FleetBoston
Financial Corporation..................................... S-5
Use of Proceeds............................................. S-9
Certain Terms of the Senior Notes........................... S-9
Material United States Tax Considerations................... S-11
Underwriting................................................ S-15
Legal Opinions.............................................. S-16
Experts..................................................... S-16
PROSPECTUS
PAGE
----
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
The GLB Act............................................... 7
Future Legislation........................................ 7
Description of Debt Securities.............................. 7
General................................................... 8
Registration and Transfer................................. 9
Payment and Place of Payment.............................. 10
Global Securities......................................... 10
Events of Default......................................... 10
Modification and Waiver................................... 12
Consolidation, Merger and Sale of Assets.................. 13
Regarding the Trustee..................................... 13
International Offering.................................... 13
Senior Debt Securities...................................... 14
Restrictive Covenants..................................... 14
Defeasance................................................ 15
Subordinated Debt Securities................................ 15
Subordination............................................. 15
Restrictive Covenants..................................... 17
Description of Warrants..................................... 17
Offered Warrants.......................................... 17
Further Information in Prospectus Supplement.............. 18
Significant Provisions of the Warrant Agreements.......... 19
Plan of Distribution........................................ 20
Experts..................................................... 21
Legal Opinions.............................................. 21
---------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE 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 CONTAINED OR INCORPORATED BY REFERENCE IN THIS DOCUMENT MAY ONLY BE
ACCURATE ON THE DATE OF THIS DOCUMENT OR AS OF ITS DATE, AS APPLICABLE.
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.
UPDATING INFORMATION
Information contained in this prospectus supplement updates and supersedes
information in the accompanying prospectus.
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 SEC's public reference room at the following address:
Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
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, 17th Floor,
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
(other than information in such documents that is deemed not to have been filed
in accordance with the SEC's rules). They contain important information about us
and our financial condition.
S-1
SEC FILINGS PERIOD
----------- ------
Annual Report on Form 10-K.......................... Year ended December 31, 2001, as filed on
March 1, 2002
Quarterly Reports on Form 10-Q...................... Quarter ended March 31, 2002, as filed on May
15, 2002
Quarter ended June 30, 2002, as filed on
August 14, 2002
Quarter ended September 30, 2002, as filed on
November 14, 2002
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 29, 2002
-March 12, 2002
-April 16, 2002
-July 2, 2002
-July 15, 2002
-August 14, 2002
-October 16, 2002
-January 10, 2003
-January 16, 2003
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 (other than information in such documents that is deemed not to have
been filed in accordance with the SEC's rules). 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 10032F
Boston, Massachusetts 02106-2106
(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 or incorporated by reference 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-2
FORWARD-LOOKING STATEMENTS
This prospectus supplement and accompanying 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:
- changes in general political and economic conditions, either domestically
or internationally;
- continued economic, political and social uncertainties in Latin America;
- developments concerning credit quality, including the resultant effect on
the level of our provision for credit losses, nonperforming assets, net
charge-offs and reserve for credit losses;
- continued weakness in domestic commercial loan demand, and the impact of
that weakness on our lending activities;
- interest rate and currency fluctuations, equity and bond market
fluctuations and inflation;
- continued weakness in the capital markets and the impact of that weakness
on our Principal Investing and other capital markets business lines;
- changes in competitive product and pricing pressures among financial
institutions within our markets;
- legislative or regulatory developments, including changes in laws or
regulations concerning taxes, banking, securities, capital requirements
and risk-based capital guidelines, reserve methodologics, deposit
insurance and other aspects of the financial services industry;
- changes in accounting rules, policies, practices and procedures; and
- legal and regulatory proceedings and related matters with respect to the
financial services industry, including those directly involving us and
our subsidiaries.
S-3
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. Our four lines of business are:
- Personal Financial Services -- composed of domestic retail banking,
consumer lending and credit card services, as well as wealth management,
including specialized asset management, estate settlement and deposit and
credit products for high-net-worth customers, proprietary and third party
mutual funds and other investment products for retail and institutional
customers, and retirement planning, large institutional asset management
and not-for-profit investment services, and retail brokerage and
securities clearing;
- Commercial Financial Services -- composed of commercial finance,
including asset-based lending and leasing; corporate banking, including
specialized industry lending and institutional banking; commercial
banking, including middle market commercial lending, trade services and
cash management, as well as government banking services, including cash
management, investment services and municipal, state and national
government agency underwriting; and small business services, including
lending, deposits and cash management;
- International Banking -- includes our international operations,
principally in Latin America; and
- Capital Markets -- includes brokerage market-making and Principal
Investing.
At September 30, 2002, our total assets on a consolidated basis were $187.2
billion, our consolidated total deposits were $121.5 billion and our
consolidated total stockholders' equity was $16.9 billion. Based on total assets
at September 30, 2002, 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.
RECENT DEVELOPMENTS
On January 16, 2003, we reported fourth quarter net income from continuing
operations of $297 million, or $.28 per share, compared with a net loss of $486
million, or $.47 per share, in the fourth quarter of 2001. The improvement from
2001 was mainly due to valuation charges recorded in 2001 related to our
Argentine and Principal Investing businesses, partially offset by higher
provisions for credit losses recorded in 2002 related to commercial credit. For
2002, net income from continuing operations was $1.5 billion, or $1.44 per
share, compared with $968 million, or $.87 per share for 2001.
Including results from discontinued operations (primarily Fleet Trading and
Robertson Stephens in the fourth quarter), net income for the fourth quarter of
2002 was $261 million, or $.24 per share, compared with a net loss of $507
million, or $.49 per share, for the fourth quarter of 2001. Net income for 2002
was $1.2 billion, or $1.12 per share, compared with $931 million, or $.83 per
share, for 2001.
For additional information about fourth quarter and full year 2002 results,
please refer to our Current Reports on Form 8-K filed with the SEC on January 10
and January 16, 2003, both of which are incorporated by reference herein.
S-4
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 nine months ended September 30, 2002
and 2001 and for each of the years in the five-year period ended December 31,
2001. 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. Certain financial
information for the nine months ended September 30, 2001 and for each of the
years in the five-year period ended December 31, 2001 has been restated to
reflect businesses sold or held for sale on a discontinued operations basis.
Information concerning adjusted net income and related earnings per share for
the nine months ended September 30, 2001 and for each of the years in the
five-year period ended December 31, 2001 is presented in accordance with the
disclosure provisions of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," which was adopted on January 1, 2002.
This pro forma information reflects net income and earnings per share without
the amortization of goodwill. The summary for the nine months ended September
30, 2002 and 2001 is based on unaudited consolidated financial statements which
include all adjustments (consisting only of normal, recurring adjustments) that,
in our opinion, are necessary for a fair statement of the results for the
respective interim periods. The results of operations for the nine months ended
September 30, 2002 are not necessarily indicative of the results expected for
2002 or any other interim period. Certain amounts in prior periods have been
reclassified to conform to current-year presentation.
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
CONSOLIDATED SUMMARY OF
OPERATIONS:
Interest income (fully
taxable equivalent)...... $ 7,799 $ 10,727 $ 13,662 $ 16,153 $ 15,379 $ 14,501 $ 13,313
Interest expense........... 2,880 5,101 6,317 8,324 7,336 6,874 5,986
-------- -------- -------- -------- -------- -------- --------
Net interest income (fully
taxable equivalent)...... 4,919 5,626 7,345 7,829 8,043 7,627 7,327
Provision for credit
losses................... 2,010(a) 951 2,324(d) 1,290 1,056 907 581
-------- -------- -------- -------- -------- -------- --------
Net interest income after
provision for credit
losses (fully taxable
equivalent).............. 2,909 4,675 5,021 6,539 6,987 6,720 6,746
Noninterest income......... 3,752 3,917 4,616 7,767 6,209 5,343 4,376
Noninterest expense........ 4,767 6,177 8,056 8,257 9,179 7,511 6,792
Income from continuing
operations............... 1,226(a) 1,446(c) 957(e) 3,605(f) 2,399(g) 2,795(h) 2,570
(Loss)/income from
discontinued
operations............... (298)(b) (8) (26) 305 77 (24) 36
Net income................. $ 928 $ 1,438 $ 931 $ 3,910 $ 2,476 $ 2,771 $ 2,606
PER COMMON SHARE:
Continuing Operations:
Basic earnings per
share.................. $ 1.16(a) $ 1.31(c) $ .87(e) $ 3.30(f) $ 2.14(g) $ 2.50(h) $ 2.29
Diluted earnings per
share.................. 1.16(a) 1.30(c) .86(e) 3.25(f) 2.09(g) 2.44(h) 2.24
Net Income:
Basic earnings per
share.................. 0.87(b) 1.31 .84 3.58 2.21 2.48 2.32
Diluted earnings per
share.................. 0.87(b) 1.29 .83 3.52 2.16 2.42 2.27
Weighted average basic
shares outstanding (in
millions)................ 1,045.1 1,083.8 1,074.2 1,081.4 1,095.7 1,094.7 1,081.1
Weighted average diluted
shares outstanding (in
millions)................ 1,049.2 1,094.1 1,083.7 1,098.7 1,121.5 1,119.7 1,105.0
Book value................. $ 15.84 $ 18.09 $ 16.61 $ 17.31 $ 15.92 $ 14.78 $ 13.43
Cash dividends declared.... 1.05 .99 1.34 1.23 1.11 1.00 .92
S-5
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
RATIO OF EARNINGS TO FIXED
CHARGES(I):
Excluding interest on
deposits................. 2.42x 2.01x 1.52x 2.49x 2.19x 2.67x 2.98x
Including interest on
deposits................. 1.63 1.46 1.24 1.71 1.53 1.64 1.70
CONSOLIDATED BALANCE
SHEET -- AVERAGE
BALANCES:
Total assets(j)............ $190,887 $210,791 $208,931 $223,895 $223,235 $201,037 $180,769
Securities held to
maturity................. 654 578 577 5,907 7,820 6,636 6,852
Securities available for
sale..................... 27,631 26,407 25,601 29,362 27,329 24,413 20,051
Loans and leases, net of
unearned income.......... 120,320 129,675 128,792 138,609 138,751 130,098 120,140
Due from brokers/dealers... 3,896 4,069 4,117 3,449 3,240 3,766 2,884
Interest bearing deposit
liabilities.............. 92,321 96,658 96,717 100,711 109,336 106,413 99,532
Short-term borrowings...... 14,329 20,462 19,845 22,127 20,035 24,506 20,286
Due to brokers/dealers..... 3,902 3,879 3,849 4,829 4,149 4,503 3,463
Long-term debt(k).......... 23,306 28,863 27,945 31,191 26,198 12,957 8,880
Stockholders' equity....... 17,457 19,571 19,330 18,134 17,479 16,319 14,671
CONSOLIDATED RATIOS:
Net interest margin (fully
taxable equivalent)(l)... 4.05% 4.24% 4.18% 4.26% 4.35% 4.39% 4.62%
Return on average
assets(l)................ .88(a) .94(c) .47(e) 1.68(f) 1.11(g) 1.41 1.43
Return on average common
stockholders'
equity(l)................ 9.43(a) 9.93(c) 4.91(e) 20.30(f) 14.45(g) 17.67 18.47
Average stockholders'
equity to average
assets(j)................ 9.15 9.28 9.25 8.10 7.83 8.12 8.12
Tier 1 risk-based capital
ratio(j)................. 8.24 8.86 7.37 8.08 7.15 7.56 8.15
Total risk-based capital
ratio(j)................. 11.77 12.58 10.95 11.87 11.44 11.65 11.72
Period-end reserve for
credit losses to
period-end loans and
leases, net of unearned
income................... 3.18 2.16 2.86 2.02 1.98 1.98 1.96
Net charge-offs to average
loans and leases, net of
unearned income(l)....... 2.06 .94 1.08 .89 .74 .68 .59
Period-end nonperforming
assets to related
assets................... 3.20 1.23 1.46 .84 .70 .62 .74
ADJUSTED NET INCOME AND
EARNINGS PER SHARE
Reported net income from
continuing operations
available to common
stockholders............. $ 1,423 $ 930 $ 3,566 $ 2,343 $ 2,735 $ 2,476
Add back goodwill
amortization, net of
applicable tax benefit... 190 255 251 235 184 122
-------- -------- -------- -------- -------- --------
Adjusted net income from
continuing operations.... 1,613 1,185 3,817 2,578 2,919 2,598
Net (loss)/income from
discontinued
operations............... (8) (26) 305 77 (24) 36
Add back goodwill
amortization of
discontinued operations,
net of applicable tax
benefit.................. 7 10 8 8 3 --
-------- -------- -------- -------- -------- --------
Adjusted net income........ $ 1,612 $ 1,169 $ 4,130 $ 2,663 $ 2,898 $ 2,634
-------- -------- -------- -------- -------- --------
S-6
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Adjusted Earnings Per
Share -- Continuing
operations
Reported basic earnings
per share.............. $ 1.31 $ .87 $ 3.30 $ 2.14 $ 2.50 $ 2.29
Add back goodwill
amortization........... .18 .23 .23 .21 .17 .11
-------- -------- -------- -------- -------- --------
Adjusted basic earnings
per share.............. $ 1.49 $ 1.10 $ 3.53 $ 2.35 $ 2.67 $ 2.40
-------- -------- -------- -------- -------- --------
Reported diluted earnings
per share.............. $ 1.30 $ .86 $ 3.25 $ 2.09 $ 2.44 $ 2.24
Add back goodwill
amortization........... .17 .23 .22 .21 .16 .11
-------- -------- -------- -------- -------- --------
Adjusted diluted earnings
per share.............. $ 1.47 $ 1.09 $ 3.47 $ 2.30 $ 2.60 $ 2.35
-------- -------- -------- -------- -------- --------
Adjusted Earnings Per
Share -- Net income
Reported basic earnings
per share.............. $ 1.31 $ .84 $ 3.58 $ 2.21 $ 2.48 $ 2.32
Add back goodwill
amortization........... .18 .25 .24 .22 .17 .11
-------- -------- -------- -------- -------- --------
Adjusted basic earnings
per share.............. $ 1.49 $ 1.09 $ 3.82 $ 2.43 $ 2.65 $ 2.43
-------- -------- -------- -------- -------- --------
Reported diluted earnings
per share.............. $ 1.29 $ .83 $ 3.52 $ 2.16 $ 2.42 $ 2.27
Add back goodwill
amortization........... .18 .25 .24 .21 .17 .11
-------- -------- -------- -------- -------- --------
Adjusted basic earnings
per share.............. $ 1.47 $ 1.08 $ 3.76 $ 2.37 $ 2.59 $ 2.38
-------- -------- -------- -------- -------- --------
------------
(a) Includes impact of additional provisions for credit losses related to
Argentina ($300 million pre-tax, $200 million post-tax) and domestic
commercial credit ($582 million pre-tax, $387 million post-tax) recorded in
the second quarter of 2002.
(b) Includes impact of gain from sale of AFSA Data Corporation ($300 million
pre-tax, $173 million post-tax), estimated losses from dispositions of
Robertson Stephens ($638 million pre-tax, $421 million post-tax) and Asia
fixed income business ($50 million pre-tax, $30 million post-tax) recorded
in the second quarter of 2002.
(c) Includes impact of merger-related and restructuring charges ($858 million
pre-tax, $541 million post-tax); an aggregate loss from sale of
FleetBoston's mortgage banking business ($428 million pre-tax, $285 million
post-tax); write-downs recorded against the carrying value of the Principal
Investing portfolio ($650 million pre-tax, $399 million post-tax); impact of
gains on branch divestitures associated with the BankBoston merger ($333
million pre-tax, $204 million post-tax) and the sale of FleetBoston's
investment in the NYCE Corporation ($146 million pre-tax, $91 million
post-tax) recorded in the nine months ended September 30, 2001.
(d) Includes impact of provisions for credit losses related to Argentina ($725
million pre-tax, $434 million post-tax), the domestic economic downturn
($175 million pre-tax, $105 million post-tax) and the transfer of problem
credits to accelerated disposition status ($150 million pre-tax, $89 million
post-tax) recorded in 2001.
(e) Includes, in addition to the provisions described in note (d), impact of
merger-related and restructuring charges ($961 million pre-tax, $604 million
post-tax); write-downs recorded against the carrying value of the Principal
Investing portfolio ($1.1 billion pre-tax, $679 million post-tax); charges
related to the estimated impact of Argentine government actions with respect
to FleetBoston's Argentine operations ($200 million pre-tax, $120 million
post-tax); write-downs recorded against the carrying value of Argentine
government bonds ($175 million pre-tax, $105 million post-tax; and a loss
from the sale of the mortgage banking business ($428 million pre-tax, $285
million post-tax) recorded in 2001. Also includes impact of gains on branch
divestitures ($410 million pre-tax, $252 million post-tax) and the sale of
an investment in the NYCE Corporation ($146 million pre-tax, $91 million
post-tax) recorded in 2001.
(f) 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.
(g) Includes impact of merger- and restructuring-related charges and other costs
($1 billion pre-tax, $680 million post-tax) recorded in 1999.
S-7
(h) Includes impact of merger- and restructuring-related charges and other costs
($218 million pre-tax, $135 million post-tax) recorded in 1998.
(i) For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consist of income from continuing operations before income taxes
plus fixed charges, excluding capitalized interest. "Fixed charges" consist
of interest on short- 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.
(j) Includes discontinued operations.
(k) Amounts include guaranteed preferred beneficial interests in our junior
subordinated debentures.
(l) Ratios for the nine-month periods are annualized.
S-8
USE OF PROCEEDS
We anticipate our net proceeds from the sale of the senior notes, after
deducting underwriting commissions but before expenses, to be $497,730,000. 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 14. 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 The City of 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 3.85% per year. Interest
on the senior notes will accrue from and including February 13, 2003 to but
excluding the maturity date. We will pay interest on the senior notes at
maturity and semiannually in arrears on the 15th day of February and August of
each year, beginning August 15, 2003. Interest will be paid to the person in
whose names the senior notes are registered at the close of business on the
preceding February 1 and August 1 (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 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.
The senior notes will mature on February 15, 2008.
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.
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.
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
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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 certificates 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. Ownership of the
senior notes will be limited to institutions that have accounts with the
Depository or its nominee (each, a "participant" and collectively, the
"participants") or persons that may hold interests through participants. In
addition, ownership of the senior notes by participants will only be evidenced
by, and transfers of such ownership interest will be effected only through,
records maintained by the Depository or its nominee. Ownership of the senior
notes by persons that hold through participants will only be evidenced by, and
transfers of such ownership interest within such participants will be effected
only through, records maintained by such participants.
Upon the issuance of the senior notes and the deposit of the global
certificate or certificates representing the senior notes with or on behalf of
the Depository, the Depository will immediately credit, on its book-entry
registration and transfer system, the respective principal amounts of the senior
notes represented by such certificate or certificates to the accounts of the
participants. The accounts to be credited will be designated by the underwriters
of the offering of the senior notes.
The senior notes will initially be represented by one or more permanent
global certificates registered in the name of the Depository or its nominee.
Owners of beneficial interests in the global certificates will not be entitled
to receive certificated senior notes in registered form and will not be
considered holders of senior notes unless (i) the Depository notifies us in
writing that it is no longer willing or able to continue to act as a depository
or if the Depository ceases to be a clearing agency registered under the
Exchange Act, and we do not appoint a successor depository within 90 days, (ii)
we execute and deliver to the trustee a company order to the effect that the
global certificates shall be exchangeable for senior notes in certificated form
or (iii) an Event of Default has occurred and is continuing with respect to the
senior notes. In the event of such occurrences, upon surrender by the Depository
or a successor depository of the global certificates, senior notes in
certificated form will be issued to each person that the Depository or a
successor depository identifies as the beneficial owner of the related senior
notes. Upon such issuance, the trustee is required to register such senior notes
in the name of, and cause the same to be delivered to, such person or persons
(or the nominee thereof). Such senior notes would be issued in fully registered
form, without coupons, in minimum denominations of $1,000 or any amount in
excess thereof that is an integral multiple of $1,000. Such senior notes may not
subsequently be exchanged by a holder for senior notes in denominations of less
than $1,000 or any amount in excess thereof that is an integral multiple of
$1,000.
Payments of principal of and interest on the senior notes registered in the
name of the Depository's nominee will be made to the Depository's nominee as the
sole registered owner of the global certificates. Under the terms of the senior
indenture, we and the trustee may treat the persons in whose names the senior
notes are registered as the absolute owners of such senior notes for the purpose
of receiving payment of principal of and interest on such senior notes and for
all other purposes whatsoever. Therefore, neither we nor the trustee has any
direct responsibility or liability for the records relating to or payments made
on account of beneficial ownership interests in the senior notes or for
maintaining, supervising or reviewing any records relating to the senior notes.
The Depository's current practice is to credit the accounts of the participants
with payments of principal or interest on the date payable in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in the global certificates as shown in the records of the Depository,
unless the Depository has reason to believe that it will not receive payment on
such date. Payments by participants and indirect participants to owners of
beneficial interests in the global certificates will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of the participants or indirect participants.
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Except as provided above, owners of the senior notes will not be entitled
to receive physical delivery of senior notes in certificated form and no global
certificate representing the senior notes shall be exchangeable, except for
another global certificate of like denomination and tenor to be registered in
the name of the Depository or its nominee. Accordingly, each person owning a
senior note must rely on the procedures of the Depository and, if such person is
not a participant, on the procedures of the participant through which such
person owns its beneficial interest, to exercise any rights under the senior
notes. We understand that, under existing industry practices, in the event that
(i) we request any action of holders or (ii) an owner of a senior note desires
to take any action which a holder is entitled to give or take under the senior
notes in accordance with the terms of the senior notes, the Depository would
authorize the participants owning the relevant senior notes to give or take such
action, and such participants would authorize beneficial owners owning through
such participants to give or take such actions or would otherwise act upon the
instructions of beneficial owners.
DTC, which has been appointed as the Depository for the senior notes, is a
limited-purpose trust company organized under New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC holds securities that its
participants ("Direct Participants") deposit with it. DTC also facilitates the
settlement among Direct Participants of securities transactions among its
participants in deposited securities through electronic computerized book-entry
changes in Direct Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust and Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a
number of Direct Participants of DTC and by members of the National Securities
Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation, as well as by the New
York Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc. Access to the DTC's system is also
available to others such as banks, securities brokers and dealers and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Direct and Indirect Participants are on file with the
SEC. DTC agrees with and represents to its participants that it will administer
its book-entry system in accordance with its rules and by-laws and applicable
requirements of law. The information contained herein concerning DTC and its
book-entry system has been obtained from sources we believe to be reliable. More
information about DTC can be found at its world wide web site at
http://www.dtcc.com.
According to DTC, the above information has been provided to its
participants and other members of the financial community for informational
purposes only and is not intended to serve as a representation, warranty, or
contract modification of any kind. We take no responsibility for the accuracy of
such information.
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
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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.
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
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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 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
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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.
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UNDERWRITING
Subject to the terms and conditions of an underwriting agreement, dated
February 10, 2003 (the "Underwriting Agreement"), among us and the underwriters,
for whom Banc of America Securities LLC, Goldman, Sachs & Co. and Fleet
Securities, Inc. are acting as 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.
PRINCIPAL AMOUNT
UNDERWRITER OF SENIOR NOTES
----------- ----------------
Banc of America Securities LLC.............................. $175,000,000
Goldman, Sachs & Co. ....................................... 175,000,000
Fleet Securities, Inc. ..................................... 112,500,000
Keefe, Bruyette & Woods, Inc. .............................. 12,500,000
Sandler O'Neill & Partners, L.P. ........................... 12,500,000
Blaylock & Partners, L.P. .................................. 2,500,000
Guzman & Company............................................ 2,500,000
Muriel Siebert & Co., Inc. ................................. 2,500,000
Utendahl Capital Partners, L.P. ............................ 2,500,000
The Williams Capital Group, L.P. ........................... 2,500,000
------------
Total............................................. $500,000,000
============
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 0.200% 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 0.125% 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.
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. The
underwriting agreement also provides that, if an Underwriter defaults, the
purchase commitments of the non-defaulting Underwriters may be increased or the
offering of the senior notes may be terminated.
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.
- Over-allotment involves sales by the Underwriters of senior notes in
excess of the principal amount of the senior notes the Underwriters are
obligated to purchase, which creates a syndicate short position.
- 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.
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
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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.
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.
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, 787
Seventh Avenue, New York, New York 10019.
EXPERTS
Our consolidated financial statements incorporated in this prospectus
supplement and the accompanying prospectus by reference to our Annual Report on
Form 10-K for the year ended December 31, 2001 have been audited by
PricewaterhouseCoopers LLP, independent accountants, as stated in their report
appearing therein, given on the authority of that firm as experts in accounting
and auditing.
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PROSPECTUS
[FLEETBOSTON 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 OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED IF 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 November 21, 2001.
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.
i
TABLE OF CONTENTS
PAGE
----
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
The GLB Act....................... 7
Future Legislation................ 7
Description of Debt Securities...... 7
General........................... 8
Registration and Transfer......... 9
Payment and Place of Payment...... 10
Global Securities................. 10
Events of Default................. 10
Modification and Waiver........... 12
Consolidation, Merger and Sale of
Assets......................... 13
PAGE
----
Regarding the Trustee............. 13
International Offering............ 13
Senior Debt Securities.............. 14
Restrictive Covenants............. 14
Defeasance........................ 15
Subordinated Debt Securities........ 15
Subordination..................... 15
Restrictive Covenants............. 17
Description of Warrants............. 17
Offered Warrants.................. 17
Further Information in Prospectus
Supplement..................... 18
Significant Provisions of the
Warrant Agreements............. 19
Plan of Distribution................ 20
Experts............................. 21
Legal Opinions...................... 21
ii
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 $4,131,868,750. 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
233 Broadway
New York, New York 10007
Midwest Regional Office
500 West Madison Street
Suite 1400
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. 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, 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
Quarter ended September 30, 2001, as filed on
November 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
-November 19, 2001
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 02106-2106
(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;
- the adverse economic effects of the recent terrorist attacks against the
United States and the response of the United States to those attacks may
be greater than expected;
- Latin American economies, particularly the economy of Argentina, may
continue to exhibit weakness and may also adversely impact the economies
of other countries;
- credit quality may continue to deteriorate, resulting in an increase in
the level of our nonperforming assets and chargeoffs;
- interest rate and currency fluctuations, equity and bond market
fluctuations and perceptions, and inflation may be greater than expected;
- global capital markets in general, and the technology and
telecommunication industries in particular, may continue to exhibit
weakness, adversely affecting our principal investing and other capital
markets businesses;
- competitive product and pricing pressures among financial institutions
within our markets may increase significantly;
- legislative or regulatory developments, including regulations adopted
under the Gramm-Leach-Bliley Act and other 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 from mergers, acquisitions and integrations of
acquired businesses and cost saving initiatives may not be fully realized
or may not be realized within the expected time frames; and
- the level of costs or difficulties related to the integration of acquired
businesses may be greater than expected.
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 and the accompanying prospectus
supplement has been restated for all periods to give effect to the Summit
acquisition.
At September 30, 2001, our total assets on a consolidated basis were $201.9
billion, our consolidated total deposits were $126.4 billion and our
consolidated total stockholders' equity was $19.8 billion. Based on total
assets, we are the seventh largest financial holding company in the United
States.
Our principal office is located at 100 Federal Street, Boston,
Massachusetts 02110, telephone number (617) 434-2200.
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 nine months ended September 30, 2001:
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------- ------------------------------------
2001 2000 1999 1998 1997 1996
----------------- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed
Charges:
Excluding Interest on
Deposits.................... 2.00x 2.58x 2.23x 2.65x 3.01x 2.81x
Including Interest on
Deposits.................... 1.45 1.75 1.54 1.63 1.70 1.59
-------------------------
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 "-- The GLB Act." 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. Those 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 September 30, 2001, our banking subsidiaries could have
declared additional dividends of approximately $786 million 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, 2000 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.
THE GLB ACT
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 do
not believe that the GLB Act will have a material adverse impact 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 those changes in laws
and regulations will occur, and, if those changes occur, the ultimate effect
they 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) $1,000 or integral multiples of $1,000 for any
senior debt security and (2) $100,000 or any integral multiple of $1,000 in
excess of $100,000 for any subordinated debt security.
We will not impose a service charge for any transfer or exchange of the
debt securities but may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with any transfer or exchange.
9
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, 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 senior indenture with respect
to senior debt securities of any series:
- default in the payment of any principal or premium on senior debt
securities of that series when due;
- default in the payment of any interest on senior debt securities of that
series when due, which continues for 30 days;
- default in the delivery or payment of the maturity consideration on
senior debt securities of that series when due;
- default in the deposit of any sinking fund payment on senior 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 senior 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 senior debt
securities of that series.
The following are the only events of default under the subordinated
indenture with respect to subordinated debt securities of any series:
- specified events in bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to subordinated debt
securities of that series.
If an event of default occurs and is continuing for any series of debt
securities, the 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 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. However, if a
default occurs and is continuing under the subordinated indenture, the
subordinated trustee may, in its discretion and subject to certain conditions,
seek to enforce its rights and the rights of the holders of the subordinated
debt securities by appropriate judicial proceedings.
The following are defaults under the subordinated indenture with respect to
subordinated debt securities of any series:
- any event of default with respect to subordinated debt securities of that
series;
- default in the payment of any principal or premium on subordinated debt
securities of that series when due;
10
- default in the payment of any interest on subordinated debt securities of
that series when due, which continues for 30 days;
- default in the delivery or payment of the maturity consideration on
subordinated 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
subordinated debt securities of that series, which continues for 60 days
after written notice; and
- any other default provided with respect to subordinated debt securities
of that series.
At any time after the trustee or the holders have accelerated a series of
debt securities, but before the 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 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% for any senior debt security, or a
majority for any subordinated debt security, 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.
11
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, 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
12
- 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 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 that 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 that
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. If the trustee resigns, 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 that
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.
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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 subsidiary, 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
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- 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
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
15
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.
If the maturity of any debt securities is accelerated, 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 INDEBTEDNESS" 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
16
- 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 September 30, 2001, we had an aggregate of approximately $4 billion
in subordinated debt outstanding at the parent company level (excluding junior
subordinated debentures issued to and held by certain of our statutory business
trusts), of which $.5 billion is subordinated to our senior indebtedness and
$3.5 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.
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
17
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;
- 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;
18
- 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.
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.
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PLAN OF DISTRIBUTION
We may sell securities:
- to the public through a group of underwriters managed or co-managed by
one or more underwriters, which may include Robertson Stephens, Inc.,
Fleet Securities, Inc., or other affiliates;
- through one or more agents, which may include Robertson Stephens, Fleet
Securities 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.
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Robertson Stephens and Fleet Securities are our wholly-owned subsidiaries.
Accordingly, the distribution of securities by Robertson Stephens and/or Fleet
Securities 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 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.
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.
Unless otherwise specified in the applicable prospectus supplement, Sidley
Austin Brown & Wood LLP, 875 Third Avenue, New York, New York 10022, will pass
upon certain matters for the underwriters.
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$500,000,000
[FLEET BOSTON FINANCIAL LOGO]
FLEETBOSTON FINANCIAL CORPORATION
3.85% SENIOR NOTES DUE 2008
-------------------------------------------
PROSPECTUS SUPPLEMENT
FEBRUARY 10, 2003
-------------------------------------------
BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
FLEET SECURITIES, INC.
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