PROSPECTUS SUPPLEMENT
(To Prospectus Dated October 28, 2004)
U.S. $15,000,000,000
[CIT LOGO]
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
Global Medium-Term Note Program
Due 9 Months or More
From Date of Issue
TERMS OF NOTES
We may offer notes at one or more times up to an aggregate initial
offering price of U.S.$15,000,000,000 under our Global Medium-Term Note Program.
A pricing supplement will reflect the specific terms of the notes. The following
are the terms or possible terms of the notes.
o The notes will mature 9 months or later from the date they are issued.
o The notes may be issued as "Senior Notes" or "Senior Subordinated Notes."
o The interest rate on the notes may be fixed or floating. Floating rate
interest will be based on:
o Federal Funds Rate;
o LIBOR;
o EURIBOR;
o Prime Rate;
o Treasury Rate;
o Any other rate specified in a pricing supplement; or
o Adjustments to the rate by the Spread and/or Spread Multiplier.
o We may issue notes whose interest rate or interest rate formula may be
adjusted on specific dates.
o Fixed rate interest is payable on January 15 and July 15, generally,
accruing from the date we issue the notes.
o Floating rate interest is payable as stated in the pricing supplement.
o Global securities are held by The Depository Trust Company, generally.
o We may issue one or more notes that are denominated in a currency or
currency unit (the "Specified Currency") other than U.S. dollars. For more
details, see "Foreign Currency Risks" and "Special Provisions Relating to
Foreign Currency Notes."
o We may issue notes at a discount from the principal amount payable at the
maturity of the notes.
o We may issue notes that do not pay periodic interest.
o For more details, see "Description of the Notes" in this prospectus
supplement, "Description of Debt Securities" in the prospectus, and the
pricing or other supplements.
o Pricing or other supplements may alter the note terms described above.
TERMS OF SALE
o Unless the pricing supplement specifies otherwise, we would receive between
U.S. $14,887,500,000 and U.S. $14,992,500,000 or the equivalent thereof in
other currencies, of the proceeds from the sale of all of the notes offered
by this prospectus supplement, before expenses, after paying the agents
commissions at rates ranging between 0.05% and 0.75% of the principal
amount of the notes sold (between U.S. $7,500,000 and U.S. $112,500,000),
or the equivalent thereof in other currencies. If the maturity of the notes
exceeds 30 years, the commission rate may be higher.
o There is currently no established trading market for the notes and there is
no assurance that an established market will develop for the notes. We have
applied to have the notes listed under the program on the Luxembourg Stock
Exchange in accordance with the rules of the Luxembourg Stock Exchange. We
will specify in the applicable pricing supplement whether the notes will be
listed on the Luxembourg Stock Exchange or any other exchange.
o We may sell the notes to one or more agents (each an "Agent" and,
collectively, the "Agents"), including the Agents listed below, as
principals for resale at varying or fixed offering prices or through one or
more Agents, using their reasonable best efforts to sell the notes on our
behalf.
o We may also sell the notes using any Agent.
This prospectus supplement shall, for the purposes of notes listed on
the Luxembourg Stock Exchange, be updated annually. We may issue notes under
this prospectus supplement that are listed on the Luxembourg Stock Exchange for
a period of twelve months from the date of this prospectus supplement.
CIT accepts full responsibility for the accuracy of the information
contained or incorporated by reference in this prospectus supplement and
confirms, having made all reasonable inquiries that, to the best of CIT's
knowledge and belief, there are no other facts the omission of which would make
any statement herein misleading in any material respect.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved the notes. None of those
authorities has determined that the prospectus, this prospectus supplement or
any pricing supplement or other supplement is accurate or complete. Any
representation to the contrary is a criminal offense.
The Luxembourg Stock Exchange takes no responsibility for the contents
of this prospectus supplement, makes no representation as to its accuracy or
completeness, and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents
of this prospectus supplement and the prospectus.
Lehman Brothers ABN AMRO Incorporated
Banc of America Securities LLC Barclays Capital
Bear, Stearns & Co. Inc. BNP PARIBAS
Citigroup Credit Suisse First Boston
Deutsche Bank Securities Goldman, Sachs & Co.
HSBC JPMorgan
Merrill Lynch & Co. Morgan Stanley
UBS Investment Bank Wachovia Securities
The date of this Prospectus Supplement is October 29, 2004.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the prospectus and the pricing
supplement. We and the Agents have not authorized anyone else to provide you
with different or additional information. We are not making an offer of these
notes in any jurisdiction where the offer is not permitted. You should not
assume that the information contained or incorporated by reference in this
prospectus supplement, the prospectus or the pricing supplement is accurate as
of any date other than the date on the front of that document.
----------
TABLE OF CONTENTS
Prospectus Supplement
Page
----
About this Prospectus Supplement and the Pricing Supplements.................S-3
Description of CIT Group Inc.................................................S-4
Incorporation by Reference...................................................S-4
Selected Consolidated Financial Information of CIT Group Inc.................S-5
Directors and Principal Executive Officers of CIT Group Inc..................S-8
Description of the Notes....................................................S-10
Special Provisions Relating to Foreign Currency Notes.......................S-28
Foreign Currency Risks......................................................S-31
Material U.S. Federal Income Tax Consequences...............................S-33
Use of Proceeds.............................................................S-40
Capitalization of CIT Group Inc.............................................S-41
Plan of Distribution........................................................S-42
Offering Restrictions.......................................................S-44
Luxembourg Listing and Other General Information............................S-47
Form of Applicable Pricing Supplement.......................................S-48
Prospectus
About this Prospectus..........................................................3
Where You Can Find More Information............................................4
Forward-Looking Statements.....................................................5
Prospectus Summary.............................................................6
Use of Proceeds................................................................7
Description of Debt Securities.................................................8
Description of Capital Stock..................................................18
Description of Depositary Shares..............................................19
Description of Warrants.......................................................22
Description of Stock Purchase Contracts and Stock Purchase Units..............23
Plan of Distribution..........................................................24
Legal Matters.................................................................25
Experts.......................................................................26
S-2
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
Except as the context otherwise requires, or as otherwise specified or used
in this prospectus supplement or the accompanying prospectus, the terms "we,"
"our," "us," "the company," "CIT," "CIT Group" and "CIT Group Inc." refer to CIT
Group Inc. References in this prospectus supplement to "U.S. dollars" or "U.S.
$" or "$" are to the currency of the United States of America.
We may use this prospectus supplement, together with the prospectus and a
pricing supplement, to offer Senior Notes or Senior Subordinated Notes, from
time to time. The total initial public offering price of notes that may be
offered by use of this prospectus supplement is $15,000,000,000 (or the
equivalent in foreign or composite currencies).
This prospectus supplement sets forth certain terms of the notes that we
may offer. It supplements the description of the notes contained in the
prospectus, under "Description of Debt Securities." If information in this
prospectus supplement is inconsistent with the prospectus, this prospectus
supplement will apply and you should not rely on the information in the
prospectus.
Each time we issue notes, we will attach a pricing supplement to this
prospectus supplement. The pricing supplement will contain the specific
description of the notes being offered and the terms of the offering. The
pricing supplement may also add, update or change information in this prospectus
supplement or the prospectus. Information in the pricing supplement will replace
any inconsistent information in this prospectus supplement, including any
changes in the method of calculating interest on any note.
When we refer to the prospectus, we mean the prospectus that accompanies
this prospectus supplement. When we refer to a pricing supplement, we mean the
pricing supplement that we attach to this prospectus supplement with respect to
a particular series of notes being issued.
You should read and consider all information contained or incorporated by
reference in this prospectus supplement, the prospectus and the pricing
supplement before making your investment decision.
S-3
DESCRIPTION OF CIT GROUP INC.
CIT Group Inc., a Delaware corporation, is a leading global commercial and
consumer finance company. CIT was incorporated on March 12, 2001 and the
original predecessor to CIT commenced operations on February 11, 1908. We
provide financing and leasing capital for companies in a wide variety of
industries, including many of today's leading industries and emerging
businesses. We offer vendor, equipment, commercial, factoring, consumer and
structured financing products. We have broad access to customers and markets
through our "franchise" businesses. Each business focuses on specific
industries, asset types and markets, with portfolios diversified by client,
industry and geography. At June 30, 2004, our managed assets were $49.9 billion,
owned financing and leasing assets were $41.5 billion and stockholders' equity
was $5.7 billion.
Our principal executive offices are located at 1 CIT Drive, Livingston, New
Jersey 07039. Our telephone number is (973) 740-5000.
INCORPORATION BY REFERENCE
The U.S. Securities and Exchange Commission (the "SEC") allows us to
incorporate by reference the information we file with it into the accompanying
prospectus and this prospectus supplement, which means that we can disclose
important information to you by referring you to those documents that are
already on file with the SEC. The information incorporated by reference is
considered to be part of this prospectus supplement, and information that we
file later with the SEC will automatically update and supersede the previously
filed information.
So long as the notes are listed on the Luxembourg Stock Exchange, you can
obtain these documents, free of charge, at the offices of BNP Paribas Securities
Services, Luxembourg Branch, CIT's Luxembourg listing and paying agent. Until we
have sold all of the debt securities which we are offering for sale under this
prospectus supplement and the prospectus, we will also incorporate by reference
all documents which we may file in the future pursuant to Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934, as amended, other than any
portions of the respective filings that were furnished, under applicable SEC
rules, rather than filed:
o our Annual Report on Form 10-K for the year ended December 31, 2003;
o our Definitive Proxy Statement filed with the SEC on April 5, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended June
30, 2004;
o our Current Reports on Form 8-K filed with the SEC on January 22,
2004, April 22, 2004, July 22, 2004, August 17, 2004, September 9,
2004, September 14, 2004, September 21, 2004 and October 21, 2004; and
o the description of our common stock contained in Form 8-A filed on
June 26, 2002, and any amendment or report filed under the Exchange
Act for the purpose of updating such description..
S-4
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF CIT GROUP INC.
On June 1, 2001, CIT was acquired by Tyco Capital Holding, Inc. ("TCH"), a
wholly owned subsidiary of an affiliate of Tyco International Ltd. ("Tyco"), in
a purchase business combination recorded under the "push-down" method of
accounting, resulting in a new basis of accounting for the "successor" period
beginning June 2, 2001. Information relating to all "predecessor" periods prior
to the acquisition is presented using CIT's historical basis of accounting.
Following the Tyco acquisition, we adopted Tyco's fiscal year ending September
30. To assist in the comparability of our financial results and discussions,
results of operations for the nine months ended September 30, 2001 include
results for five months of the predecessor and four months of the successor and
are designated in the following tables as "combined."
On July 8, 2002, our former parent, Tyco, completed a sale of 100% of CIT's
outstanding common stock in an initial public offering. Immediately prior to the
offering, CIT was merged with its parent TCH, a company used to acquire CIT. As
a result of the reorganization, the historical financial statements of TCH are
included in the historical consolidated CIT financial statements. Prior to the
offering on July 8, 2002, the activity of TCH consisted primarily of interest
expense to an affiliate of Tyco, and the TCH accumulated net deficit was
eliminated via a capital contribution from Tyco. There was no TCH activity
subsequent to June 30, 2002. The results for both the periods ended September
30, 2002 and September 30, 2001 include activity of TCH. Therefore, certain
previously reported CIT data may differ from the data presented below due
primarily to the inter-company debt and related interest expense of TCH.
On November 5, 2002, the CIT board of directors approved returning to a
calendar year-end from a September 30 fiscal year-end. As a result, the three
months ended December 31, 2002 constitutes a transitional fiscal period.
The following tables set forth selected consolidated financial information
regarding CIT's results of operations and balance sheets. The financial data at
December 31, 2003, December 31, 2002, September 30, 2002 and September 30, 2001,
and for the year ended December 31, 2003, the three months ended December 31,
2002, the year ended September 30, 2002, the period from June 2, 2001 through
September 30, 2001, the period from January 1, 2001 through June 1, 2001 and the
year ended December 31, 2000, were derived from the audited Consolidated
Financial Statements of CIT incorporated by reference in this prospectus
supplement. The financial data at December 31, 2000 and 1999 and for the year
ended December 31, 1999 was derived from audited financial statements that are
not incorporated by reference in this prospectus supplement. The financial data
at June 30, 2004 and June 30, 2003 and for the six month periods then ended is
derived from the unaudited consolidated financial statements of CIT that are
incorporated by reference in this prospectus supplement. In the opinion of
management, such unaudited consolidated financial statements reflect all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the information included therein. Certain prior period balances
have been conformed to present period presentation. To assist in the
comparability of our financial results, the financial information in the
following tables combines the "predecessor period" (January 1, 2001 through June
1, 2001) with the "successor period" (June 2, 2001 through September 30, 2001)
to present "combined" results for the nine months ended September 30, 2001. You
should read the selected consolidated financial data below in conjunction with
our consolidated financial statements. See "Where You Can Find More Information"
in the prospectus.
Three
Six Months Months
Ended Year Ended Ended
June 30, December December
($ in millions, except ------------------------- 31, 31,
per share data) 2004 2003 2003 2002
----------------------------------- ----------- ----------- ----------- -----------
(successor) (successor) (successor) (successor)
Results of Operations
Net finance margin ................ $ 749.3 $638.2 $1,327.8 $344.9
Provision for credit losses ....... 151.3 203.6 387.3 133.4
Operating margin .................. 1,065.6 887.7 1,799.8 468.6
Salaries and general operating
expenses ....................... 507.6 446.3 912.9 232.6
Goodwill impairment ............... -- -- -- --
Goodwill amortization ............. -- -- -- --
Acquisition related costs ......... -- -- -- --
Interest expense--TCH ............. -- -- -- --
Gain on redemption of debt ........ 41.8 -- 50.4 --
Nine
Months
Year Ended Ended
September September Years Ended December 31,
($ in millions, except 30, 30, -----------------------------
per share data) 2002 2001 2000 1999
----------------------------------- ----------- ---------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Results of Operations
Net finance margin ................ $1,637.1 $1,301.7 $1,447.9 $ 906.0
Provision for credit losses ....... 788.3 332.5 255.2 110.3
Operating margin .................. 1,781.2 1,541.8 2,104.7 1,146.5
Salaries and general operating
expenses ....................... 921.1 777.4 1,013.7 504.6
Goodwill impairment ............... 6,511.7 -- -- --
Goodwill amortization ............. -- 97.6 86.3 25.7
Acquisition related costs ......... -- 54.0 -- --
Interest expense--TCH ............. 662.6 98.8 -- --
Gain on redemption of debt ........ -- -- -- --
S-5
Three
Six Months Months
Ended Year Ended Ended
June 30, December December
($ in millions, except ------------------------- 31, 31,
per share data) 2004 2003 2003 2002
----------------------------------- ----------- ----------- ----------- -----------
(successor) (successor) (successor) (successor)
Net income (loss) ................. 365.9 263.9 566.9 141.3
Net income (loss) per
share(1)--basic ................ 1.73 1.25 2.68 0.67
Net income (loss) per
share(1)--diluted .............. 1.70 1.24 2.66 0.67
Dividends per share(1) ............ 0.26 0.24 0.48 0.12
Nine
Months
Year Ended Ended
September September Years Ended December 31,
($ in millions, except 30, 30, -----------------------------
per share data) 2002 2001 2000 1999
----------------------------------- ----------- ---------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Net income (loss) ................. (6,698.7) 263.3 611.6 389.4
Net income (loss) per
share(1)--basic ................ (31.66) 1.24 2.89 1.84
Net income (loss) per
share(1)--diluted .............. (31.66) 1.24 2.89 1.84
Dividends per share(1) ............ -- 0.25 0.50 0.31
At At At
June 30 December December
------------------------- 31, 31,
($ in millions) 2004 2003 2003 2002
----------------------------------- ----------- ----------- ----------- -----------
(successor) (successor) (successor) (successor)
Balance Sheet Data
Total finance receivables.......... $31,828.6 $28,413.6 $31,300.2 $27,621.3
Reserve for credit losses ......... 621.0 754.9 643.7 760.8
Operating lease equipment, net..... 7,838.8 7,560.0 7,615.5 6,704.6
Goodwill and intangible assets..... 516.4 404.1 487.7 400.9
Total assets ...................... 46,682.5 43,184.7 46,342.8 41,932.4
Commercial paper .................. 4,170.4 4,576.7 4,173.9 4,974.6
Variable-rate bank credit
facilities ..................... -- -- -- 2,118.0
Variable-rate senior notes ........ 10,931.6 6,637.3 9,408.4 4,906.9
Fixed-rate senior notes ........... 19,330.3 21,216.8 19,830.8 19,681.8
Subordinated fixed-rate notes ..... -- -- -- --
Preferred capital securities....... 254.6 256.4 255.5 257.2
Stockholders' equity .............. 5,691.8 5,057.6 5,394.2 4,870.7
Tangible stockholders' equity ..... 5,175.4 4,653.5 4,906.5 4,469.8
At At
September September At December 31,
30, 30, -----------------------------
($ in millions) 2002 2001 2000 1999
----------------------------------- ----------- ----------- ------------- -------------
(successor) (successor) (predecessor) (predecessor)
Balance Sheet Data
Total finance receivables.......... $28,459.0 $31,879.4 $33,497.5 $31,007.1
Reserve for credit losses ......... 777.8 492.9 468.5 446.9
Operating lease equipment, net..... 6,567.4 6,402.8 7,190.6 6,125.9
Goodwill and intangible assets..... 402.0 6,547.5 1,971.5 1,850.5
Total assets ...................... 42,710.5 51,349.3 48,689.8 45,081.1
Commercial paper .................. 4,654.2 8,869.2 9,603.5 8,974.0
Variable-rate bank credit
facilities ..................... 4,037.4 -- -- --
Variable-rate senior notes ........ 5,379.0 9,614.6 11,130.5 7,147.2
Fixed-rate senior notes ........... 18,385.4 17,113.9 17,571.1 19,052.3
Subordinated fixed-rate notes ..... -- 100.0 200.0 200.0
Preferred capital securities....... 257.7 260.0 250.0 250.0
Stockholders' equity .............. 4,757.8 5,947.6(2) 6,007.2 5,554.4
Tangible stockholders' equity ..... 4,355.8 4,028.5(2) 4,035.7 3,703.9
----------
(1) Net income (loss) and dividend per share calculations for the periods
preceding September 30, 2002 are based on the number of common shares
outstanding (basic and diluted of 211.6 million and 211.7 million,
respectively) upon the completion of the July 2002 initial public offering.
(2) Stockholders' equity and tangible stockholder's equity excludes TCH results
due to its temporary status as a Tyco acquisition company with respect to
CIT.
At or for
At or for the At or for the Three
Six Months the Months
Ended Year Ended Ended
June 30, December December
------------------------- 31, 31,
($ in millions) 2004 2003 2003 2002
----------------------------------- ----------- ----------- ----------- -----------
(successor) (successor) (successor) (successor)
Selected Data and Ratios
Profitability
Net finance margin as a
percentage of average earning
assets ("AEA")(1)............... 4.00% 3.63% 3.71% 4.22%
Ratio of earnings to fixed
charges(2)...................... 1.99x 1.61x 1.68x 1.65x
Other Operating Ratios
Salaries and general operating
expenses as a percentage of
average managed assets
("AMA")(3)...................... 2.19% 1.97% 1.99% 2.10%
Efficiency ratio(4)................ 41.7% 40.9% 41.7% 38.6%
Credit Quality
60+ days contractual delinquency
as a percentage of finance
receivables..................... 1.79% 3.26% 2.16% 3.63%
Non-accrual loans as a
percentage of finance
receivables..................... 1.47% 2.83% 1.81% 3.43%
Net credit losses as a
percentage of average finance
receivables..................... 1.15% 1.56% 1.77% 2.32%
Reserve for credit losses as a
percentage of finance
receivables..................... 1.95% 2.66% 2.06% 2.75%
Leverage
Total debt (net of overnight
deposits) to tangible
stockholders' equity(5)(6)...... 6.09x 6.30x 6.14x 6.22x
At or for
At or for the Nine
the Months
Year Ended Ended At or for the
September September Years Ended December 31,
30, 30, -----------------------------
($ in millions) 2002 2001 2000 1999
----------------------------------- ----------- ---------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Selected Data and Ratios
Profitability
Net finance margin as a
percentage of average earning
assets ("AEA")(1)............... 4.57% 4.29% 3.56% 3.54%
Ratio of earnings to fixed
charges(2)...................... (8) 1.30x 1.39x 1.45x
Other Operating Ratios
Salaries and general operating
expenses as a percentage of
average managed assets
("AMA")(3)...................... 1.95% 2.05% 1.97% 1.71%
Efficiency ratio(4)................ 35.8% 41.5% 43.0% 40.1%
Credit Quality
60+ days contractual delinquency
as a percentage of finance
receivables..................... 3.76% 3.46% 2.98% 2.71%
Non-accrual loans as a
percentage of finance
receivables..................... 3.43% 2.67% 2.10% 1.65%
Net credit losses as a
percentage of average finance
receivables..................... 1.67% 1.20% 0.71% 0.42%
Reserve for credit losses as a
percentage of finance
receivables..................... 2.73% 1.55% 1.40% 1.44%
Leverage
Total debt (net of overnight
deposits) to tangible
stockholders' equity(5)(6)...... 6.54x 8.20x 8.78x 8.75x
S-6
At or for
At or for the At or for the Three
Six Months the Months
Ended Year Ended Ended
June 30, December December
------------------------- 31, 31,
($ in millions) 2004 2003 2003 2002
----------------------------------- ----------- ----------- ----------- -----------
(successor) (successor) (successor) (successor)
Tangible stockholders'
equity(5) to managed
assets(7)....................... 10.9% 10.5% 10.4% 10.4%
Other
Total managed assets(7)............ $49,854.5 $47,865.5 $49,735.6 $46,357.1
Employees ......................... 5,705 5,845 5,800 5,835
At or for
At or for the Nine
the Months
Year Ended Ended At or for the
September September Years Ended December 31,
30, 30, -----------------------------
($ in millions) 2002 2001 2000 1999
----------------------------------- ----------- ---------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Tangible stockholders'
equity(5) to managed
assets(7)....................... 9.9% 8.6% 7.8% 7.7%
Other
Total managed assets(7)............ $47,622.3 $50,877.1 $54,900.9 $51,433.3
Employees ......................... 5,850 6,785 7,355 8,255
----------
(1) "AEA" means average earning assets, which is the average of finance
receivables, operating lease equipment, finance receivables held for sale
and certain investments, less credit balances of factoring clients.
(2) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of income before income taxes and fixed charges. Fixed
charges consist of interest on indebtedness, minority interest in
subsidiary trust holding solely debentures of the Company and one-third of
rent expense, which is deemed representative of an interest factor.
(3) "AMA" means average managed assets, which is average earning assets plus
the average of finance receivables previously securitized and still managed
by us.
(4) Efficiency ratio is the percentage of salaries and general operating
expenses to operating margin, excluding the provision for credit losses.
(5) Tangible stockholders' equity excludes goodwill and other intangible assets
and excludes TCH results due to its temporary status as a Tyco acquisition
company with respect to CIT. Tangible stockholders' equity also excludes
certain unrealized losses relating to derivative financial instruments and
other investments, as these losses are not necessarily indicative of
amounts which will be realized.
(6) Total debt excludes, and tangible stockholders' equity includes,
Company-obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely debentures of the Company.
(7) "Managed assets" means assets previously securitized and still managed by
us and include (i) financing and leasing assets, (ii) certain investments
and (iii) off-balance sheet finance receivables.
(8) Earnings were insufficient to cover fixed charges by $6,331.1 million for
the year ended September 30, 2002. Earnings for the year ended September
30, 2002 included a non-cash goodwill impairment charge of $6,511.7 million
in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets."
The ratio of earnings to fixed charges included fixed charges of $1,497.1
million and a loss before provision for income taxes of $6,331.1 million
resulting in a total loss provision for income taxes and fixed charges of
$(4,834.0) million.
S-7
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF CIT GROUP INC.
Board of Directors
Present members of the Board of Directors and their principal occupations are:
Albert R. Gamper, Jr.
Chairman of CIT
Gary C. Butler
President and Chief Operating Officer of Automatic Data Processing, Inc.
William A. Farlinger
Chairman of Ontario Power Generation Inc.
William M. Freeman
Chief Executive Officer of Cricket Communications, Inc.
Hon. Thomas H. Kean
President of Drew University and Former Governor of New Jersey
Edward J. Kelly, III
Chairman, President and Chief Executive Officer of Mercantile Bankshares
Corporation
Marianne Miller Parrs
Executive Vice President of International Paper Company
Jeffrey M. Peek
President and Chief Executive Officer of CIT
John R. Ryan
President of Maritime College, State University of New York
Peter J. Tobin
Special Assistant to the President of St. John's University
Lois M. Van Deusen
Managing Partner of McCarter & English, LLP
Principal Executive Officers
Current principal executive officers of CIT are:
Jeffrey M. Peek
President and Chief Executive Officer
Thomas B. Hallman
Vice Chairman, Specialty Finance
Robert J. Ingato
Executive Vice President, General Counsel and Secretary
Joseph M. Leone
Vice Chairman, Chief Financial Officer
S-8
Lawrence A. Marsiello
Vice Chairman, Chief Lending Officer
Frederick E. Wolfert
Vice Chairman, Commercial Finance
William J. Taylor
Executive Vice President, Controller and Chief Accounting Officer
S-9
DESCRIPTION OF THE NOTES
General
In order to issue notes in the U.S. public markets, an issuer typically
enters into an agreement, referred to as an indenture, with a banking
institution or similar entity organized under the laws of the United States or
of any individual state. The notes offered hereby will be issued pursuant to an
indenture to be entered into between us and J.P. Morgan Trust Company, National
Association, as trustee.
This prospectus supplement summarizes certain terms of the notes. If you
want to know more about the terms of any of the notes, you should refer to the
indenture under which the notes will be issued. We have filed as an exhibit to
our shelf registration statement filed with the SEC (File No. 333-119172) or
incorporated by reference, the relevant indenture pursuant to which the notes
will be issued. If we use a capitalized term in this prospectus supplement that
is not defined, that term will have the same meaning as in the prospectus and/or
the applicable indenture.
Ranking--Senior Notes; Senior Subordinated Notes. The notes will be
unsecured obligations of CIT and will be either senior debt or senior
subordinated debt, as specified in the applicable pricing supplement. We will
issue the Senior Notes as one or more separate, unlimited series of debt
securities constituting superior indebtedness under one or more indentures
(each, a "Senior Indenture," and collectively, the "Senior Indentures"). Each of
the Senior Indentures will be entered into between us and the trustee (each, a
"Senior Trustee," and collectively, the "Senior Trustees"). The Senior Notes
will be senior debt securities as described in the prospectus. The Senior Notes
will have the same rank as all of our other senior debt securities. See
"Description of Debt Securities" in the prospectus.
We will issue the Senior Subordinated Notes as one or more separate,
unlimited series of debt securities constituting senior subordinated
indebtedness under one or more indentures (each, a "Senior Subordinated
Indenture," and collectively, the "Senior Subordinated Indentures"). Each of the
Senior Subordinated Indentures will be entered into between us and the trustee
(each, a "Senior Subordinated Trustee," and collectively, the "Senior
Subordinated Trustees"). The Senior Subordinated Notes will constitute senior
subordinated debt securities, as described in the prospectus. The Senior
Subordinated Notes will have the same rank as all of our other senior
subordinated debt securities, but will be subordinate to our Senior Notes. See
"Description of Debt Securities--Subordination" in the prospectus.
The Senior Indentures and the Senior Subordinated Indentures are
collectively referred to herein as the "Indentures." The Senior Trustees and
Senior Subordinated Trustees are collectively referred to herein as the
"Trustees."
Unless the pricing supplement specifies to the contrary, with respect to
each separate series of notes issued under the Indentures, the Trustee will
serve as securities registrar, paying agent, transfer agent and authenticating
agent (in each such capacity, the "Registrar," "Paying Agent," "Transfer Agent"
and "Authenticating Agent"), and may act as exchange rate agent (in such
capacity, the "Exchange Rate Agent").
None of the Senior Indentures limits the amount of notes that may be issued
under each such Senior Indenture, but the Senior Subordinated Indentures may
limit the amount of debt securities that we may issue. See "Description of Debt
Securities--Negative Pledge" in the prospectus for a description of restrictions
on our ability to issue Senior Subordinated Notes.
Governing Law. The notes are governed by, and are to be construed in
accordance with, the laws of the State of New York and of the United States,
applicable to agreements made and to be performed wholly within those
jurisdictions.
Meeting of Noteholders. The Indentures contain provisions for calling
meetings of the holders of the notes and other debt securities issued pursuant
to the Indentures to consider matters affecting their interests, including,
without limitation, the modification of the terms of the notes or the waiver of
any default under the terms of the notes or the Indentures. CIT or the holders
of at least 10% in aggregate principal amount of the notes then outstanding of
any
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series or all series may request that the Trustee call a meeting of the holders
of the notes of that series or all series, respectively. The quorum for any
meeting of the holders of the notes is the presence of the holders of notes who
are entitled to vote a majority in aggregate principal amount of each relevant
series of notes at the time outstanding. A resolution passed at a duly called
and constituted meeting of debt securityholders will be binding on the holders
of all debt securities issued pursuant to the Indentures, whether or not they
are present at the meeting.
Replacement of Notes. If any mutilated note is surrendered to the Trustee,
we will execute and the Trustee will authenticate and deliver in exchange for
such mutilated note a new note of the same series and principal amount. If the
Trustee and we receive evidence to our satisfaction of the destruction, loss or
theft of any note and such security or indemnity as may be required by them,
then we shall execute and the Trustee shall authenticate and deliver, in lieu of
such destroyed, lost or stolen note, a new note of the same series and principal
amount. All expenses (including counsel fees and expenses) associated with
issuing the new note shall be borne by the owner of the mutilated, destroyed,
lost or stolen note.
Notices. All notices to redeem notes and all other communications to
holders of notes that are registered with and held by The Depository Trust
Company, New York, New York (the "Depositary"), or its nominee will be sent to
the Depositary or its nominee and the Depositary will communicate such notices
to its participants in accordance with its standard procedures. In the case of
notes held by investors through Clearstream Banking, societe anonyme
("Clearstream") or Euroclear S.A./N.V., as operator of the Euroclear System
("Euroclear"), notices will be sent to Clearstream and Euroclear, as
appropriate, for communication with their participants in accordance with their
standard procedures.
In addition to the foregoing (for so long as the notes are listed on the
Luxembourg Stock Exchange and the rules of such stock exchange so require),
notices to redeem notes and all other communications to holders of notes will be
published in a leading daily newspaper with general circulation in Luxembourg
(which is expected to be the Luxemburger Wort).
Neither the failure to give notice nor any defect in any notice given to
any particular holder of a note will affect the sufficiency of any notice with
respect to other notes.
Reopening of Issue. We may, from time to time, without the consent of
existing note holders, reopen an issue of notes and issue additional notes with
the same terms (including maturity and interest payment terms) as notes issued
on an earlier date, except for the issue date, issue price and the first payment
of interest. After such additional notes are issued, they will be fungible with
the previously issued notes to the extent specified in the applicable pricing
supplement.
Maturity. Each note will mature nine months or more from the date of issue,
as determined by agreement between the Agents and us. We will specify the
maturity date of each note on the face of that note and in the pricing
supplement.
Interest Rates. The notes may bear interest at:
o a fixed rate; or
o a floating rate, which may be based on one of the following rates (see
"Description of the Notes--Interest Rates--Floating Rate Notes" for a
further description of each of these floating rates):
o Federal Funds Rate (a note issued with this rate is a "Federal
Funds Rate Note");
o LIBOR (a note issued with this rate is a "LIBOR Note");
o EURIBOR (a note issued with this rate is a "EURIBOR Note");
o Prime Rate (a note issued with this rate is a "Prime Rate Note");
o Treasury Rate (a note issued with this rate is a "Treasury Rate
Note"); and
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o a rate as otherwise specified in the pricing supplement.
We will compute interest on floating rate notes by referring to an interest
rate index, often adjusted by a Spread or Spread Multiplier. Interest on
floating rate notes may be adjusted periodically with changes in the underlying
interest rate index. See "Interest Rates" below for definitions of "Spread" and
"Spread Multiplier."
We may issue notes at prices less than their stated principal amount.
Certain of these discounted notes will be considered Original Issue Discount
Notes (as defined below under "Description of the Notes--Interest Rates").
Original Issue Discount Notes may or may not bear periodic interest. For a
discussion of the U.S. federal income tax consequences relating to Original
Issue Discount Notes, see "Material U.S. Federal Income Tax Consequences" below.
Denomination; Book-Entry System; Calculations. Unless the pricing
supplement specifies otherwise, the notes will be denominated in U.S. dollars
and we will make all payments on the notes in U.S. dollars. Unless the pricing
supplement specifies otherwise, we will issue U.S. dollar notes in a minimum
denomination of U.S. $1,000 and integral multiples of U.S. $1,000 for higher
amounts. However, we may specify notes in the pricing supplement that we will
denominate in another currency or currency unit. We will offer the notes at an
aggregate initial offering price of up to U.S. $15,000,000,000 or the equivalent
thereof in other currency or currency units. See "Special Provisions Relating to
Foreign Currency Notes--Payment Currency." For information on the exchange rate
we will use for non-U.S. dollar notes, see "Special Provisions Relating to
Foreign Currency Notes--Payment Currency."
Unless the pricing supplement specifies otherwise, we will issue each note
in fully registered form without coupons. We will not issue notes under this
prospectus supplement in bearer form. Unless the pricing supplement specifies
otherwise and except for non-U.S. dollar notes, the notes will be represented by
one or more permanent global notes registered in the name of the Depositary, or
its nominee, as described below. Subject to the Depositary's requirements, a
single global note will represent all notes issued on the same day and having
the same terms. The Paying Agent will make all payments on notes represented by
a global note to the Depositary. See "Description of the Notes--Book-Entry
System."
"Business Day" is a day other than a Saturday or Sunday and means:
o with respect to notes denominated in U.S. dollars (other than LIBOR
Notes), any day that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation
(including any executive order) to close in the City of New York;
o with respect to notes denominated in a currency other than U.S.
dollars or Euros, any day that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law or
regulation (including any executive order) to close in either the City
of New York or the principal financial center of the country of such
currency;
o with respect to notes denominated in Euros and EURIBOR Notes, any day
on which the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) System is open; and
o with respect to LIBOR Notes, any day that is neither a legal holiday
nor a day on which banking institutions are authorized or required by
law or regulation (including any executive order) to close in the City
of New York and that is also a London Business Day.
Unless the pricing supplement specifies otherwise, the Trustee will be the
"Calculation Agent" with regard to the notes. As used in this prospectus
supplement, "Calculation Date" means, with respect to any floating rate note
and, where applicable, certain other notes, the earlier of:
o the Business Day immediately preceding the applicable day on which
interest is payable on the note, the date on which the note will
mature (the "Maturity Date") or the date of redemption or repayment,
as the case may be; or
o the fifth Business Day after an Interest Determination Date (as
defined below) relating to the note.
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"Index Maturity" means the period to maturity used in the interest rate
index on which the interest rate for any floating rate note is based.
"Interest Determination Date" means, for any Interest Reset Date (as
defined in "Description of the Notes--Interest Rates--Floating Rate Notes"), the
date for determining the rate of interest that will take effect on the Interest
Reset Date.
"Interest Payment Date" means a day on which interest is payable on the
notes.
"Interest Rate" means, at any given time, the rate per annum at which the
notes bear interest.
"London Business Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
Unless the pricing supplement specifies otherwise, we will round all
percentages resulting from any calculation of the rate of interest on floating
rate notes, if necessary, to the nearest one hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)). We will round
all U.S. dollar amounts used in or resulting from that calculation to the
nearest cent (with one-half cent being rounded upward). In the case of floating
rate notes denominated in currency or currency units other than U.S. dollars, we
will round all amounts used in or resulting from that calculation to the
smallest whole unit of that other currency or currency unit.
Pricing Supplement. The pricing supplement relating to each note will
describe or specify, among other things, the following terms:
o if the note is not denominated in U.S. dollars, the Specified Currency
in which the note is denominated;
o whether the note is a fixed rate note or a floating rate note;
o the price (which may be expressed as a percentage of the aggregate
principal amount thereof) at which we will issue the note;
o the Maturity Date;
o if the note is a fixed rate note, the Interest Rate, if any, for the
note;
o if the note is a floating rate note, the Initial Interest Rate, the
Interest Determination Date, the Interest Reset Dates, the Interest
Payment Dates, the Index Maturity, the Maximum Interest Rate and the
Minimum Interest Rate, if any, and the Spread and/or Spread
Multiplier, if any, and any other terms relating to the particular
method of calculating the Interest Rate for the note (see "Description
of the Notes--Interest Rates" for an explanation of the terms relating
to floating rate notes);
o any provisions relating to redemption or repayment of the note not
otherwise described in this prospectus supplement;
o whether the note is a Senior Note or a Senior Subordinated Note and,
if a Senior Subordinated Note, whether the holders or a Trustee of the
note may accelerate the maturity of the note only in the event of
certain circumstances related to our insolvency;
o any provisions relating to extensions of the note;
o the date on which the note will be issued (the "Issue Date");
o whether the note is a global note or a certificated note;
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o the Trustee, Registrar, Paying Agent and Authenticating Agent under
the Indenture pursuant to which the note is to be issued;
o whether the note will be listed on the Luxembourg Stock Exchange or on
any other exchange; and
o any other terms of the note not inconsistent with the provisions of
the applicable Indenture.
Payment and Paying Agents
Unless the pricing supplement specifies otherwise, either we or the Paying
Agent will make all payments on each note which are to be made in U.S. dollars
(including payments which are to be made in U.S. dollars for Foreign Currency
Notes) in the manner described below. For a description of special provisions
relating to payments on a Foreign Currency Note to be made in a Specified
Currency, see "Special Provisions Relating to Foreign Currency Notes--Payment of
Principal and Interest."
Unless the pricing supplement specifies otherwise, either we or the Paying
Agent will pay interest on fixed rate notes semi-annually on each Interest
Payment Date and at maturity (or, if applicable, upon redemption or repayment).
Unless the pricing supplement specifies otherwise, either we or the Paying Agent
will pay interest on the floating rate notes on the Interest Payment Dates set
forth below and at maturity (or, if applicable, upon redemption or repayment).
Either we or the Paying Agent will pay interest on each Interest Payment
Date to the person in whose name the note is registered on the registry books of
the Registrar at the close of business on the applicable record date (a "Record
Date") next preceding each Interest Payment Date. However, either we or the
Paying Agent will pay interest at maturity (whether or not the maturity date is
an Interest Payment Date) or upon earlier redemption or repayment to the person
to whom principal shall be payable. Unless otherwise specified in a pricing
supplement, if a note is originally issued between a Record Date and an Interest
Payment Date, then either we or the Paying Agent will pay the first payment of
interest on that note to the holder of record for the first Interest Payment
Date.
Either we or the Paying Agent will pay interest on each note (other than
global notes and Foreign Currency Notes and other than interest payable to the
holder thereof, if any, on the Maturity Date or upon earlier redemption or
repayment) by check mailed to the person in whose name the note is registered at
the close of business on the applicable Record Date. Except as provided below,
either we or the Paying Agent will make all payments due on the Maturity Date,
or upon earlier redemption or repayment, in immediately available funds upon
surrender of the note at the corporate trust office of the Paying Agent in the
Borough of Manhattan, the City of New York.
If the Paying Agent makes a payment on an Interest Payment Date (other than
interest payable to the holder thereof, if any, on the Maturity Date or upon
earlier redemption or repayment), and if the Paying Agent receives a written
request to make payment by wire transfer from a holder of U.S. $1,000,000 or
more (or its equivalent in the Specified Currency) in aggregate principal amount
of the notes not later than the close of business on the Record Date pertaining
to that Interest Payment Date, the Paying Agent will, subject to applicable laws
and regulations, until it receives notice to the contrary, make all U.S. dollar
payments to this holder by wire transfer to the account designated in such
written request.
If the Paying Agent makes a payment on the Maturity Date or the date of
redemption or repayment, if any, and if the Paying Agent receives a written
request to make payment by wire transfer from a holder of U.S. $1,000,000 or
more (or its equivalent in the Specified Currency, if other than U.S. dollars)
in aggregate principal amount of the notes not later than the close of business
on the fifteenth day prior to the Maturity Date or the date of redemption or
repayment, if any, the Paying Agent will make all U.S. dollar payments to the
holder by wire transfer to the account designated in the holder's written
request. However, the Paying Agent may only make these wire transfer payments
subject to applicable laws and regulations, and only after surrender of the note
or notes in the Borough of Manhattan, the City of New York, not later than one
Business Day prior to the Maturity Date or the date of redemption or repayment,
as the case may be.
Unless the pricing supplement specifies otherwise, the Paying Agent will
make all payments on notes represented by a permanent global note registered in
the name of or held by the Depositary or its nominee to the
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Depositary or its nominee, as the case may be, as the registered owner and
holder of the permanent global note representing the notes.
We may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts.
Interest Rates
Each note, except Zero-Coupon Notes (as defined in "--Fixed Rate Notes"
below), will bear interest from its Issue Date at the fixed rate per annum, or
at the floating rate per annum determined pursuant to the interest rate formula,
stated in the note and in the pricing supplement. We may change Interest Rates
from time to time, but no change will affect any notes theretofore issued or as
to which we have accepted an offer. Interest Rates we may offer with respect to
the notes may differ among different series of debt securities which we offer
within a short time frame depending upon, among other things, changes in overall
economic or market conditions or differences in the aggregate principal amount
of notes purchased by each investor in different series of debt securities.
The Interest Rate on the notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application.
Fixed Rate Notes.
Each fixed rate note, except Zero-Coupon Notes, will bear interest from the
Issue Date at the annual fixed interest rate stated in the note and in the
pricing supplement. Interest on the Fixed Rate Notes, except Zero-Coupon Notes,
will be payable on the Interest Payment Dates specified in the note and in the
pricing supplement. Unless the pricing supplement specifies otherwise, the
Interest Payment Dates for interest on the fixed rate notes will be January 15
and July 15 of each year and on the Maturity Date or upon earlier redemption or
repayment. Unless the pricing supplement specifies otherwise, the Record Dates
for the fixed rate notes will be the fifteenth calendar day next preceding each
Interest Payment Date.
Unless the pricing supplement specifies otherwise, interest on Fixed Rate
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
If an Interest Payment Date or the Maturity Date (or the date of redemption
or repayment) with respect to a fixed rate note falls on a day which is not a
Business Day, the payment will be made on the next Business Day as if it were
made on the date this payment was due, and no additional interest will accrue as
a result of this delayed payment.
Interest payments on each fixed rate note will include the amount of
interest accrued from and including the last Interest Payment Date to which
interest has been paid (or from and including the Issue Date if no interest has
been paid with respect to the note) to, but excluding, the applicable Interest
Payment Date, or Maturity Date, as the case may be.
We may issue notes at prices less than their stated principal amount
("Discounted Notes"). Certain of the Discounted Notes may bear no interest
("Zero-Coupon Notes"), and certain of the Discounted Notes may bear interest at
a rate which at the time of issuance is below market rates. Unless the pricing
supplement specifies otherwise, upon the redemption, repayment, or acceleration
of the maturity of these Discounted Notes, an amount less than the principal
amount of the Discounted Note will become due and payable. For United States
federal income tax purposes, certain of the Discounted Notes would be considered
original issue discount notes ("Original Issue Discount Notes"). Certain
information concerning United States federal income tax aspects of Zero-Coupon
Notes or Original Issue Discount Notes is set forth elsewhere in this prospectus
supplement and may be set forth in the pricing supplement.
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Floating Rate Notes
Unless the pricing supplement specifies otherwise, we will issue floating
rate notes as described below. Each floating rate note will bear interest from
the Issue Date at the floating rate per annum determined pursuant to the
interest rate formula specified in the note and in the pricing supplement.
Unless the pricing supplement specifies otherwise, the Interest Rate on each
floating rate note will be equal to:
o an interest rate determined by reference to the interest rate index
specified in the pricing supplement plus or minus the Spread, if any,
and/or
o an interest rate calculated by reference to the interest rate index
specified in the pricing supplement multiplied by the Spread
Multiplier, if any.
The "Spread" is the number of basis points (one one-hundredth of a
percentage point) specified in the pricing supplement as an adjustment to the
Interest Rate for a floating rate note. The "Spread Multiplier" is the factor
specified in the pricing supplement as an adjustment to the Interest Rate for a
floating rate note.
Any floating rate note may also have either or both of the following terms:
o a maximum limitation, or ceiling, on the rate of interest which may
accrue during any interest period (the "Maximum Interest Rate"); and
o a minimum limitation, or floor, on the rate of interest which may
accrue during any interest period (the "Minimum Interest Rate").
The pricing supplement for a floating rate note will specify the interest
rate index and the Spread or Spread Multiplier, if any, or other interest rate
formula and the Maximum or Minimum Interest Rate, if any.
Unless otherwise specified in the note and in the pricing supplement,
either we or the Paying Agent will pay interest on floating rate notes at
maturity, upon earlier redemption or repayment, if applicable, and on the
following Interest Payment Dates:
o in the case of notes with a daily, weekly or monthly Interest Reset
Date, on the third Wednesday of each month or on the third Wednesday
of March, June, September and December, as specified in the note and
the pricing supplement;
o in the case of notes with a quarterly Interest Reset Date, on the
third Wednesday of March, June, September and December of each year;
o in the case of notes with a semiannual Interest Reset Date, on the
third Wednesday of the two months specified in the note and the
pricing supplement; and
o in the case of notes with an annual Interest Reset Date, on the third
Wednesday of the month specified in the note and the pricing
supplement.
We will calculate interest payments on each floating rate note to include
the amount of interest accrued from and including the last Interest Payment Date
to which interest has been paid (or from and including the Issue Date if no
interest has been paid with respect to the note) to, but excluding, the
applicable Interest Payment Date, or Maturity Date, as the case may be.
The Record Dates for the floating rate notes shall be the fifteenth
calendar day next preceding each Interest Payment Date.
The Calculation Agent will compute interest on floating rate notes in the
manner set forth below.
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If any Interest Payment Date for any floating rate note (other than the
Maturity Date or the date of redemption or repayment) would otherwise be a day
that is not a Business Day, then the Interest Payment Date will be postponed to
the following day which is a Business Day, except that in the case of a LIBOR
Note, if this Business Day falls in the next succeeding calendar month, then the
Interest Payment Date will be the immediately preceding Business Day. If the
Maturity Date (or the date of redemption or repayment) of a floating rate note
falls on a day which is not a Business Day, then we will make the required
payment of principal, premium, if any, and/or interest on the following day
which is a Business Day as if it were made on the date this payment was due, and
no interest shall accrue as a result of this delayed payment.
We will calculate accrued interest on a floating rate note by adding the
Interest Factors (as defined below) calculated for each day in the period for
which we are calculating accrued interest. We will compute the "Interest Factor"
for each day by multiplying the face amount of the floating rate note by the
Interest Rate applicable to the day and dividing the product thereof by 360, or,
in the case of any Treasury Rate Note, by the actual number of days in the year.
We will reset the rate of interest on each floating rate note daily,
weekly, monthly, quarterly, semiannually or annually (the first date on which
the reset interest rate becomes effective, being an "Interest Reset Date"), as
specified in the note and the pricing supplement. Unless otherwise specified in
the note and the pricing supplement, the Interest Reset Date will be:
o in the case of floating rate notes which reset daily, each Business
Day;
o in the case of floating rate notes which reset weekly (other than
Treasury Rate Notes), the Wednesday of each week;
o in the case of Treasury Rate Notes which reset weekly, the Tuesday of
each week;
o in the case of floating rate notes which reset monthly, the third
Wednesday of each month;
o in the case of floating rate notes which reset quarterly, the third
Wednesday of March, June, September and December;
o in the case of floating rate notes which reset semiannually, the third
Wednesday of two months of each year; and
o in the case of floating rate notes which reset annually, the third
Wednesday of one month of each year.
If any Interest Reset Date for any floating rate note is not a Business
Day, the Interest Reset Date for that floating rate note shall be postponed to
the next succeeding Business Day, except that in the case of a LIBOR Note, if
the next succeeding Business Day is in the next succeeding calendar month, that
Interest Reset Date will be the immediately preceding Business Day.
With respect to determining the Interest Determination Date, unless the
pricing supplement specifies to the contrary;
o the Interest Determination Date for a Federal Funds Rate Note or Prime
Rate Note is the second Business Day before the Interest Reset Date;
o the Interest Determination Date for a LIBOR Note is the second London
Business Day before the Interest Reset Date:
o the Interest Determination Date for a EURIBOR Note is the second
TARGET Business Day before the Interest Reset Date; and
o the Interest Determination Date for a Treasury Rate Note is the day of
the week in which such Interest Reset Date falls on which direct
obligations of the United States ("Treasury Bills") would normally be
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auctioned. Treasury Bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the
auction is usually held on Tuesday. The auction, however, may be held
on the preceding Friday. If so, that Friday will be the Interest
Determination Date for the Interest Reset Date occurring in the next
week.
Unless the pricing supplement specifies otherwise, the Interest Rate
determined with respect to any Interest Determination Date for any floating rate
note will become effective on and as of the next succeeding Interest Reset Date.
However, the Interest Rate in effect with respect to any floating rate note for
the period from the Issue Date to the first Interest Reset Date will be the
"Initial Interest Rate" as specified in the pricing supplement. The Interest
Rate for a floating rate note will be applicable from and including the Interest
Reset Date to which it relates to but not including the next Interest Reset Date
or until the Maturity Date, as the case may be.
The Calculation Agent will determine the Interest Rate for a floating rate
note on an Interest Determination Date in accordance with the provisions below.
The Calculation Agent will, upon the request of the holder of any floating rate
note and to the extent available, provide the Interest Rate then in effect for
the note and, if different, the Interest Rate to be in effect as a result of a
determination made on the most recent Interest Determination Date with respect
to the note. With respect to floating rate notes listed on the Luxembourg Stock
Exchange, promptly following each Interest Determination Date, the Calculation
Agent will notify the Luxembourg Stock Exchange of the Interest Rate for the
next succeeding interest period and the amount of interest payable on the next
Interest Payment Date. The Calculation Agent will provide such notice to the
Luxembourg Stock Exchange by the first day of the next succeeding interest
period.
LIBOR Notes
Each LIBOR Note will bear interest at a rate calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any, specified in the note and
in the pricing supplement.
Unless the pricing supplement specifies otherwise, the Calculation Agent
will determine LIBOR with respect to any Interest Reset Date according to the
method specified in the note and the pricing supplement, in accordance with the
following provisions:
o if "LIBOR Telerate" is specified as the reporting service in the
pricing supplement, LIBOR will be the rate for deposits in U.S.
dollars having the Index Maturity designated in the pricing
supplement, commencing on the second London Business Day immediately
following the Interest Determination Date, that appears on the
Designated LIBOR Page as of 11:00 a.m., London time, on that Interest
Determination Date; and
o if "LIBOR Reuters" is specified as the reporting service in the
pricing supplement, LIBOR will be the arithmetic mean of the offered
rates (unless the Designated LIBOR Page by its terms provides only for
a single rate, in which case such single rate shall be used) for
deposits in U.S. dollars having the Index Maturity designated in the
pricing supplement, commencing on the second London Business Day
immediately following such Interest Determination Date, that appear
(or, if only a single rate is required, appears) on the Designated
LIBOR Page as of 11:00 a.m., London time, on that Interest
Determination Date, provided that at least two such offered rates
appear.
If, the Rate Index is "LIBOR Reuters," and fewer than two offered rates
appear, or LIBOR Reuters is not available, or if the Rate Index is "LIBOR
Telerate" and no rate appears, or LIBOR Telerate is not available, then we will
determine LIBOR as follows:
o The Calculation Agent will select the principal London offices of four
major banks in the London interbank market, and will request each bank
to provide its offered quotation for deposits in U.S. dollars for the
period of the Index Maturity designated in the pricing supplement,
commencing on the second London Business Day immediately following the
Interest Determination Date, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on the Interest
Determination Date and in a principal amount equal to an amount that
is representative for a single transaction in the Index Currency in
the market at that time.
S-18
o If at least two of these banks provide a quotation, the Calculation
Agent will compute LIBOR on the Interest Determination Date as the
arithmetic mean of the quotations.
o If fewer than two of these banks provide a quotation, the Calculation
Agent will select three major banks in the City of New York to provide
a rate quote. The Calculation Agent will compute LIBOR on the Interest
Determination Date as the arithmetic mean of these quoted rates at
approximately 3:00 p.m., New York City time, on the Interest
Determination Date in U.S. dollars for loans to leading European
banks, having the Index Maturity designated in the pricing supplement
commencing on the second London Business Day immediately following the
Interest Determination Date and in a principal amount that is
representative for a single transaction in the market at that time.
o If none of these banks provides a quotation as mentioned, the rate of
interest will be the same as that in effect on the Interest
Determination Date.
The "Designated LIBOR Page" means (i) if "LIBOR Telerate" is specified in
the pricing supplement, the display on Moneyline Telerate (or any successor
service) on the page specified in the pricing supplement (or any other page as
may replace this page on that service) for the purpose of displaying the London
interbank offered rates of major banks or (ii) if "LIBOR Reuters" is specified
in the pricing supplement, the display on the Reuters Monitor Money Rates
Service (or any successor service) on the page specified in the pricing
supplement (or any other page as may replace this page on that service) for the
purpose of displaying the London interbank offered rates of major banks.
If neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement, LIBOR will be determined as if LIBOR Telerate had
been specified.
EURIBOR Notes
Each EURIBOR Note will bear interest at a rate calculated with reference to
EURIBOR and the Spread and/or Spread Multiplier, if any, specified in the note
and in the pricing supplement.
Unless the pricing supplement specifies otherwise, EURIBOR means with
respect to any Interest Reset Date, a base rate equal to the interest rate for
deposits in Euros designated as "EURIBOR" and sponsored jointly by the European
Banking Federation and ACI--the Financial Market Association, or any company
established by the joint sponsors for purposes of compiling and publishing that
rate. EURIBOR will be determined in accordance with the following provisions:
o EURIBOR will be the rate for deposits in Euros having the Index
Maturity designated in the pricing supplement, commencing on the
second TARGET Business Day immediately following the Interest
Determination Date, that appears on the display on Moneyline Telerate
(or any successor service) on page 248 (or any other page as may
replace this page on that service) ("Telerate Page 248") as of 11:00
a.m., Brussels time, on that Interest Determination Date.
If the rate described above does not appear on Telerate Page 248, then we
will determine EURIBOR as follows:
o The Calculation Agent will select the principal Euro-zone offices of
four major banks in the Euro-zone interbank market, and will request
each bank to provide its offered quotation for deposits in Euros for
the period of the Index Maturity designated in the pricing supplement,
commencing on the Interest Determination Date, to prime banks in the
Euro-zone interbank market at approximately 11:00 a.m., Brussels time,
on the Interest Determination Date and in a principal amount equal to
an amount that is representative for a single transaction in the Index
Currency in the market at that time.
o If at least two of these banks provide a quotation, the Calculation
Agent will compute EURIBOR on the Interest Determination Date as the
arithmetic mean of the quotations.
o If fewer than two of these banks provide a quotation, the Calculation
Agent will select three major banks in the Euro-zone to provide a rate
quote. The Calculation Agent will compute EURIBOR on the Interest
S-19
Determination Date as the arithmetic mean of these quoted rates at
approximately 11:00 a.m., Brussels time, on the Interest Determination
Date for loans of Euros, having the Index Maturity designated in the
pricing supplement commencing on the Interest Determination Date and
in a principal amount that is representative for a single transaction
in the market at that time.
o If fewer than three of these banks provides a quotation as mentioned,
EURIBOR for the new interest period will be EURIBOR in effect for the
prior interest period. If the initial base rate has been in effect for
the prior interest period, however, it will remain in effect for the
new interest period.
Treasury Rate Notes
Each Treasury Rate Note will bear interest at the rate calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any,
specified in the note and the pricing supplement.
Unless the pricing supplement specifies otherwise, "Treasury Rate" means
the rate for the auction held on the Interest Determination Date of Treasury
Bills having the Index Maturity specified in the pricing supplement as that rate
appears on the display on Moneyline Telerate (or any successor service) on page
56 (or any other page as may replace this page on that service) ("Telerate Page
56") or page 57 (or any other page which replaces this page on that service)
("Telerate Page 57") under the heading "INVESTMENT RATE."
If the rate cannot be set as described above, the Calculation Agent will
use the following methods in succession:
o If the rate is not published as described above by 3:00 p.m., New York
City time, on the Calculation Date, the Treasury Rate will be the
auction average rate of Treasury Bills (expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as the case may be, and
applied on a daily basis) as otherwise announced by the United States
Department of Treasury.
o In the event that the auction rate of Treasury Bills having the Index
Maturity specified in the pricing supplement is not published by 3:00
p.m., New York City time, on the Calculation Date, or if no auction is
held, then the Treasury Rate will be the rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as the case may
be, and applied on a daily basis) on the Interest Determination Date
of Treasury Bills having the Index Maturity specified in the pricing
supplement as published in H.15(519) under the heading "U.S.
Government Securities/Treasury Bills/Secondary Market" or, if not yet
published by 3:00 p.m., New York City time, on the Calculation Date,
the rate on the Interest Determination Date of Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source
used for the purpose of displaying that rate, under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market."
o If the rate is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source, then the Treasury Rate will be
calculated as a yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as the case may be, and
applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 p.m., New York City time,
on the Interest Determination Date, of three leading primary U.S.
government securities dealers in the City of New York selected by the
Calculation Agent for the issue of Treasury Bills with a remaining
maturity closest to the applicable Index Maturity.
o If fewer than three of the dealers are quoting as mentioned, then the
rate of interest will be the same as that in effect on that Interest
Determination Date.
"H.15(519)" means "Statistical Release H.15(519), Selected Interest Rates,"
or any successor publication as published weekly by the Board of Governors of
the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world wide web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication.
S-20
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear interest
at the rate calculated using the Federal Funds Rate and the Spread and/or Spread
Multiplier, if any, specified in the note and the pricing supplement.
Unless the pricing supplement specifies otherwise, "Federal Funds Rate"
means, for an Interest Determination Date, the rate with respect to that date
for Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)," as this rate is displayed on Moneyline Telerate (or any successor
service) on page 120 (or any other page as may replace this page on that
service) ("Telerate Page 120").
If the rate cannot be set as described above, the Calculation Agent will
use the following methods in succession:
o If the rate does not appear on Telerate Page 120 or is not yet
published by 3:00 p.m. New York City time, on the Calculation Date,
then the Federal Funds Rate will be the rate with respect to the
Interest Determination Date as published in the H.15 Daily Update or
another recognized electronic source used for the purpose of
displaying this rate under the heading "Federal Funds (Effective)."
o If the rate does not appear on Telerate Page 120 or is not yet
published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 p.m., New York City time, on the Calculation
Date, then the Federal Funds Rate with respect to the Interest
Determination Date will be the arithmetic mean of the rates, as of
3:00 p.m., New York City time, on the business day following that
Interest Determination Date, for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds
transactions in the City of New York selected by the Calculation
Agent.
o If fewer than three brokers are quoting as mentioned, then the rate of
interest will be the same as that in effect on that Interest
Determination Date.
Prime Rate Notes
Each Prime Rate Note will bear interest at the rate calculated using the
Prime Rate and the Spread and/or Spread Multiplier, if any, specified in the
note and the pricing supplement.
Unless the pricing supplement specifies otherwise, "Prime Rate" means, with
respect to an Interest Determination Date, the rate set forth on that date in
H.15(519) under the heading "Bank Prime Loan" or if not published by 3:00 p.m.,
New York City time, on the Calculation Date, the rate on the Interest
Determination Date as published in H.15 Daily Update, or another recognized
electronic source used for the purpose of displaying this rate, under the
heading "Bank Prime Loan."
If the rate cannot be set as described above, the Calculation Agent will
use the following methods in succession:
o If the rate is not published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 p.m., New York City time,
on the Calculation Date, then the Prime Rate will be the arithmetic
mean of the rates of interest that appear on the Reuters Screen
USPRIME 1 Page (as defined below) as a bank's publicly announced prime
rate or base lending rate in effect as of 3:00 p.m., New York City
time, for that Interest Determination Date.
o If fewer than four rates appear on the Reuters Screen USPRIME 1 Page
on that date, then the Prime Rate will be the arithmetic mean of the
prime rates or base lending rates quoted by three major banks in the
City of New York selected by the Calculation Agent on the basis of the
actual number of days in the year divided by a 360-day year as of the
close of business on the Interest Determination Date.
o If fewer than three banks are quoting as mentioned, then the rate of
interest will be the same as that in effect on the Interest
Determination Date.
S-21
"Reuters Screen USPRIME 1 Page" means the display page designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service (or such other page as
may replace the USPRIME 1 page on that service for the purpose of displaying
prime rates or base lending rates of major U.S. banks).
Foreign Currency, Currency Indexed and Other Indexed Notes
We may, from time to time, offer Foreign Currency Notes. See "Special
Provisions Relating to Foreign Currency Notes" and "Foreign Currency Risks."
We may, from time to time, offer notes ("Currency Indexed Notes") of which
the principal amount payable on the Maturity Date (or upon earlier redemption or
repayment) and/or interest thereon will be determined with reference to the
exchange rate of a Specified Currency relative to another currency or composite
currency (the "Indexed Currency") or to a currency index (the "Currency Index").
Holders of these notes may receive a principal amount on the Maturity Date or
upon earlier redemption or repayment that is greater than or less than the face
amount of these notes depending upon the relative value at maturity of the
Specified Currency compared to the Indexed Currency or Currency Index.
The pricing supplement will describe the Foreign Currency Notes, the
Currency Indexed Notes and the Currency Index and, when appropriate, will also
provide:
o information as to the method for determining the amount of interest
payable and the principal amount payable on the Maturity Date or upon
earlier redemption or repayment;
o the relative value of the Specified Currency compared to the
applicable Indexed Currency or Currency Index;
o any exchange controls applicable to the Specified Currency or Indexed
Currency; and
o certain tax consequences to the holders of the Currency Indexed Notes.
For more information about Foreign Currency Notes and Currency Indexed
Notes, see "Special Provisions Relating to Foreign Currency Notes" and "Foreign
Currency Risks."
We may, from time to time, also offer indexed notes ("Indexed Notes") other
than Currency Indexed Notes. The principal amount of the Indexed Notes which is
payable on the Maturity Date or upon earlier redemption or repayment and/or
interest thereon will be determined by reference to a measure (the "Index"). The
Index will be:
o one or more equity or other indices and/or formulas;
o the price of one or more specified commodities; or
o such other methods or formulas we may specify in the pricing
supplement.
The pricing supplement will describe the Indexed Notes and the Index and
will also provide,
o the method of determination of the amount of interest payable and the
amount of principal payable on the Maturity Date or upon earlier
redemption or repayment in respect of the Indexed Notes;
o certain tax consequences to holders of the Indexed Notes;
o certain risks associated with an investment in the Indexed Notes; and
o other information relating to the Indexed Notes.
Your investment in the Currency Indexed Notes or in other Indexed Notes, as
to principal or interest or both, entails significant risks that are not
associated with similar investments in a conventional fixed-rate debt security.
S-22
The interest rate on Currency Indexed Notes and other Indexed Notes may be less
than that payable on a conventional fixed-rate debt security issued at the same
time.
The possibility exists that no interest will be paid or that negative
interest will accrue, and the principal amount of a Currency Indexed Note or
some other Indexed Note payable at maturity may be less than the original
purchase price of the note. The possibility exists that no principal will be
paid at maturity if the principal amount is utilized to net against accrued
negative interest.
A number of factors affect the secondary market for Currency Indexed Notes
and other Indexed Notes, independent of our creditworthiness and the value of
the applicable Index, the time remaining to the maturity of the notes, the
amount outstanding of the notes and market interest rates. The value of the
applicable Index depends on a number of interrelated factors, including
economic, financial and political events, over which we have no control.
Additionally, if the formula used to determine the principal amount or
interest payable with respect to a Currency Indexed Note contains a multiple or
leverage factor, the effect of any change in the applicable Index will be
increased. You should not view the historical experience of the relevant Index
as an indication of future performance of the Index during the term of any
Currency Indexed Note or any other Indexed Note. Accordingly, you should consult
your own financial and legal advisors about the risk entailed by an investment
in Currency Indexed Notes and other Indexed Notes and the suitability of such
notes in light of their particular circumstances.
Unless the pricing supplement specifies otherwise:
o for the purpose of determining whether holders of the requisite
principal amount of Debt Securities outstanding under the applicable
Indenture have taken any action, the outstanding principal amount of
Currency Indexed Notes or of other Indexed Notes will be deemed to he
the face amount of those notes; and
o in the event of an acceleration of the maturity of a Currency Indexed
Note or any other Indexed Note, the principal amount to be paid to the
holder of that note upon acceleration will be the principal amount
determined by reference to the formula by which the principal amount
of that note would be determined on the Maturity Date of that note, as
if the date of acceleration were the Maturity Date.
Redemption
Unless the pricing supplement specifies otherwise, (i) the notes will not
be redeemable prior to maturity, and (ii) the notes will not be entitled to any
sinking fund.
Prepayment at Option of Holder
Unless the pricing supplement specifies otherwise, a holder of a note will
not have the option to require prepayment of a note prior to maturity.
Book-Entry System
Unless the pricing supplement specifies otherwise and except for Foreign
Currency Notes, the notes when issued will be represented by a permanent global
note or notes. Each permanent global note will be deposited with, or on behalf
of, the Depositary and registered in the name of a nominee of the Depositary.
Investors may elect to hold interests in the global notes through either the
Depositary (in the United States) or Clearstream or Euroclear (outside of the
United States), if they are participants of those systems, or indirectly through
organizations that are participants in those systems. Clearstream and Euroclear
will hold interests on behalf of their participants through customers'
securities accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries, which in turn will hold the interests in customers'
securities accounts in the depositaries' names on the books of the Depositary.
Citibank, N.A. will act as depositary for Clearstream and The Chase Manhattan
Bank will act as depositary for Euroclear (in those capacities, the "U.S.
Depositaries"). Except under the limited circumstances described below,
permanent global notes will not be exchangeable for notes in definitive form and
will not otherwise be issuable in definitive form.
S-23
Ownership of beneficial interests in a permanent global note will be
limited to institutions which have accounts with the Depositary or its nominee
(each a "participant") or persons who may hold interests through participants.
In addition, ownership of beneficial interests by participants in that permanent
global note will be evidenced only by, and the transfer of that ownership
interest will be effected only through, records maintained by the Depositary or
its nominee for that permanent global note. Ownership of beneficial interests in
that permanent global note by persons who hold through participants will be
evidenced only by, and the transfer of that ownership interest within the
participant will be effected only through, records maintained by that
participant. The Depositary has no knowledge of the actual beneficial owners of
the notes. Beneficial owners will not receive written confirmation from the
Depositary of their purchase, but beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participants through which the beneficial
owners entered the transaction. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair your ability to transfer your beneficial
interests in that permanent global note.
We have been advised by the Depositary that upon the issuance of a
permanent global note and the deposit of that permanent global note with the
Depositary, the Depositary will immediately credit on its book-entry
registration and transfer system the respective principal amounts represented by
that permanent global note to the accounts of participants.
The Paying Agent will make all payments on notes represented by a permanent
global note registered in the name of or held by the Depositary or its nominee
to the Depositary or its nominee, as the case may be, as the registered owner
and holder of the permanent global note representing the notes. The Depositary
has advised us that upon receipt of any payment of principal of, or premium or
interest, if any, on a permanent global note, the Depositary will immediately
credit, on its book-entry registration and transfer system, accounts of
participants with payments in amounts proportionate to their respective
beneficial interests in the principal amount of that permanent global note as
shown in the records of the Depositary or its nominee. We expect that payments
by participants to owners of beneficial interests in a permanent global note
held through those participants 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" (i.e., the name of a
securities broker or dealer), and will be the sole responsibility of those
participants, subject to any statutory or regulatory requirements as may be in
effect from time to time.
None of CIT, the Trustee, any agent of CIT, or any agent of the Trustee
will be responsible or liable for any aspect of the records relating to or
payments made on account of beneficial interests in a permanent global note or
for maintaining, supervising, or reviewing any of the records relating to such
beneficial interests.
A permanent global note is exchangeable for definitive notes registered in
the name of, and a transfer of a permanent global note may be registered to, any
person other than the Depositary or its nominee, only if:
o the Depositary notifies us that it is unwilling or unable to continue
as Depositary for that permanent global note or if at any time the
Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and we do not appoint a
successor Depositary within 90 days;
o we, in our sole discretion, determine that the permanent global note
will be exchangeable for definitive notes in registered form; or
o an event of default under the applicable Indenture shall have occurred
and be continuing, as described in the prospectus, and we, the
applicable Trustee, or the applicable Registrar and Paying Agent
notify the Depositary that the global note will be exchangeable for
definitive notes in registered form.
Any permanent global note which is exchangeable will be exchangeable in
whole for definitive notes in registered form, of like tenor and of an equal
aggregate principal amount as the permanent global note, in denominations of
$1,000 and integral multiples thereof. Those definitive notes will be registered
in the name or names of such person or persons as the Depositary shall instruct
the Trustee. We expect that those instructions may be based upon directions
received by the Depositary from its participants with respect to ownership of
beneficial interests in the permanent global note.
S-24
In the event definitive notes are issued, you may transfer the definitive
notes by presenting them for registration to the Registrar at its New York
office or at the office of the transfer agent in Luxembourg (in the case of
notes listed on the Luxembourg Stock Exchange), as the case may be. If you
transfer less than all of your definitive notes, you will receive a definitive
note or notes representing the retained amount from the registrar at its New
York office or at the office of the transfer agent in Luxembourg (in the case of
notes listed on the Luxembourg Stock Exchange), as the case may be, within 30
days of presentation for transfer. Notes presented for registration must be duly
endorsed by the holder or his attorney duly authorized in writing, or
accompanied by a written instrument or instruments of transfer in form
satisfactory to us or the Trustee duly executed by the holder or his attorney
duly authorized in writing. You can obtain a form of written instrument of
transfer from the registrar at its New York office or at the office of the
transfer agent in Luxembourg (in the case of notes listed on the Luxembourg
Stock Exchange), as the case may be. We may require you to pay a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any exchange or registration of transfer of definitive notes, but otherwise
transfers will be without charge. If we issue definitive notes,
o principal of and interest on the notes will be payable in the manner
described below;
o the transfer of the notes will be registrable; and
o the notes will be exchangeable for notes bearing identical terms and
provisions.
If we issue definitive notes, we will do so at the office of the Paying
Agent, including any successor Paying Agent and Registrar for the notes,
currently located at 1999 Avenue of the Stars, 26th Floor, Los Angeles,
California 90067 (in the case of Senior Notes) and 101 Barclay Street, New York,
New York 10286 (in the case of Senior Subordinated Notes) and at the office of
BNP Paribas Securities Services. Luxembourg Branch, as the Luxembourg paying
agent (the "Luxembourg Paying Agent"), in the case of notes listed on the
Luxembourg Stock Exchange, currently located at 23 Avenue de la Porte Neuve,
L-2085, Luxembourg. We will maintain a Luxembourg Transfer Agent and Luxembourg
Paying Agent as long as notes are listed on the Luxembourg Stock Exchange.
We may pay interest on definitive notes, other than interest at maturity or
upon redemption, by mailing a check to the address of the person entitled to the
interest as it appears on the security register at the close of business on the
regular record date corresponding to the relevant interest payment date. The
term "record date," as used in the prospectus supplement, means the close of
business on the fifteenth day preceding any interest payment date.
Notwithstanding the foregoing, the Depositary, as holder of the notes, or a
holder of more than $l million in aggregate principal amount of notes in
definitive form, may require the Paying Agent to make payments of interest,
other than interest due at maturity or upon redemption, by wire transfer of
immediately available funds into an account maintained by the holder in the
United States, by sending appropriate wire transfer instructions. The Paying
Agent must receive these instructions not less than ten days prior to the
applicable interest payment date.
The Paying Agent or, in the case of notes listed on the Luxembourg Stock
Exchange, the Luxembourg Paying Agent, as the case may be, will pay the
principal and interest payable at maturity or upon redemption by wire transfer
of immediately available funds against presentation of a note at the office of
the Paying Agent or, in the case of notes listed on the Luxembourg Stock
Exchange, the Luxembourg Paying Agent, as the case may be. We will maintain a
Luxembourg Transfer Agent and Luxembourg Paying Agent as long as notes are
listed on the Luxembourg Stock Exchange. So long as notes are listed on the
Luxembourg Stock Exchange, we will publish notice of any change in the
Luxembourg Transfer Agent or Luxembourg Paying Agent or its address in a leading
daily newspaper with general circulation in Luxembourg (which is expected to be
the Luxemburger Wort).
Except as provided above, owners of beneficial interests in a permanent
global note will not be entitled to receive physical delivery of notes in
definitive form and will not be considered the holders of these notes for any
purpose under the applicable Indenture, and no permanent global note will be
exchangeable, except for another permanent global note of like denomination and
tenor to be registered in the name of the Depositary or its nominee. So, each
person owning a beneficial interest in a permanent global note must rely on the
procedures of the Depositary and, if that person is not a participant, on the
procedures of the participant through which that person owns its interest, to
exercise any rights of a holder under the applicable Indenture.
S-25
We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a
permanent global note desires to give or take any action which a holder is
entitled to give or take under the applicable Indenture, the Depositary would
authorize the participants holding the relevant beneficial interests to give or
take this action, and the participants would authorize beneficial owners owning
through participants to give or take this action or would otherwise act upon the
instructions of beneficial owners owning through them.
The Depository Trust Company. The Depositary has advised us that it is a
limited-purpose trust company organized under the laws of the State of New York,
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 under the Securities Exchange Act of 1934, as amended. The Depositary
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
securities through electronic book-entry changes in accounts of the
participants. By doing so, the Depositary eliminates the need for physical
movement of securities certificates. The Depositary's participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. The Depositary is owned by a number of its
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the Depositary's book-entry system is also available to others, such as
banks, brokers, dealers, and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
rules applicable to the Depositary and its participants are on file with the
SEC.
We believe that the sources from which the information in this section
concerning the Depositary and the Depositary's system has been obtained are
reliable, but we take no responsibility for the accuracy of the information.
Clearstream. Clearstream advises that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream holds securities for its
participating organizations ("Clearstream Participants") and facilitates the
clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream
Participants, thereby eliminating the need for physical movement of
certificates. Clearstream provides to Clearstream Participants, among other
things, services for safekeeping, administration, clearance, and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg
Monetary Institute. Clearstream Participants are recognized financial
institutions around the world, including Agents, securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other organizations
and may include the Agents. Indirect access to Clearstream, is also available to
others, such as banks, brokers, dealers, and trust companies that clear through
or maintain a custodial relationship with a Clearstream Participant either
directly or indirectly.
Distributions with respect to the notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream Participants in
accordance with its rules and procedures, to the extent received by the U.S.
Depositary for Clearstream.
Euroclear. Euroclear advises that it was created in 1968 to hold securities
for participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by the Euroclear S.A./N.V. (the "Euroclear
Operator"), under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers, and other professional financial
intermediaries and may include the Agents. Indirect access to Euroclear is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear Participant, either directly or indirectly.
S-26
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear, the related
Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash within Euroclear, withdrawals of securities and cash from Euroclear, and
receipts of payments with respect to securities in Euroclear. All securities in
Euroclear are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator
acts under the Terms and Conditions only on behalf of Euroclear Participants and
has no record of or relationship with persons holding through Euroclear
Participants.
Distributions with respect to the notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. depositary for
Euroclear.
Global Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between participants in the Depositary will
occur in the ordinary way in accordance with the Depositary's rules and will be
settled in immediately available funds using the Depositary's Same-Day Funds
Settlement System. Secondary market trading between Clearstream Participants
and/or Euroclear Participants will occur in the ordinary way in accordance with
the applicable rules and operating procedures of Clearstream and Euroclear and
will be settled using the procedures applicable to conventional eurobonds in
immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through
Clearstream or Euroclear Participants, on the other, will be effected in the
Depositary in accordance with the depositary rules on behalf of the relevant
European international clearing system by its U.S. Depositary. However, these
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in that system in
accordance with its rules and procedures and within its established deadlines
(European time). If the transaction meets the settlement requirements, the
relevant European international clearing system will deliver instructions to its
U.S. depositary to take action to effect final settlement on its behalf by
delivering or receiving notes in the Depositary and making or receiving payment
in accordance with normal procedures for same-day funds settlement applicable to
the Depositary. Clearstream Participants and Euroclear Participants may not
deliver instructions directly to their respective U.S. depositaries.
Because of time-zone differences, credits of notes received in Clearstream
or Euroclear as a result of a transaction with a participant in the Depositary
will be made during subsequent securities settlement processing and dated the
business day following the Depositary settlement date. Credits or any
transactions in notes settled during this processing will be reported to the
relevant Euroclear or Clearstream Participants on that following business day.
Cash received in Clearstream or Euroclear as a result of sales of notes by or
through a Clearstream Participant or a Euroclear Participant to a participant in
the Depositary will be received with value on the Depositary settlement date but
will be available in the relevant Clearstream or Euroclear cash account only as
of the business day following settlement in the Depositary.
Although the Depositary, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of the Depositary, Clearstream and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.
EU Directive on the Taxation of Savings Income
The European Union has adopted a directive regarding the taxation of
savings income. Subject to a number of important conditions being met, it is
proposed that each of the member states of the European Union (each, a "Member
State," and together, "Member States") will be required from a date not earlier
than January 1, 2005 to provide to the tax authorities of other Member States
details of payments of interest and other similar income paid by a person to an
individual in another Member State, except that Austria, Belgium and Luxembourg
will instead impose a withholding system for a transitional period unless during
such period they elect otherwise.
S-27
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
Terms of the Notes
Unless the pricing supplement specifies otherwise, we will denominate the
notes in U.S. dollars and we will make all payments on the notes in U.S.
dollars. Unless the pricing supplement specifies otherwise, the following
provisions shall apply to Foreign Currency Notes. The following specific
provisions supplement the description of general terms of the notes set forth in
the prospectus and elsewhere in this prospectus supplement and, if the
description of the general terms of the notes is inconsistent, these provisions
override and replace them. We will issue Foreign Currency Notes in registered
form only, without coupons.
No Foreign Currency Notes may be issued which (a) have a minimum
denomination of less than EUR 1000 (or nearly equivalent in another currency),
or (b) carry the right to acquire shares (or transferable securities equivalent
to shares) issued by us or by any entity to whose group we belong. Subject
thereto, the Foreign Currency Notes will be issued in such denominations as may
be specified in the relevant pricing supplement, subject to compliance with all
applicable legal and/or regulatory and/or central bank requirements.
Currencies
Unless the pricing supplement specifies otherwise, you must pay for Foreign
Currency Notes in the Specified Currency. At present, limited facilities are
available in the United States for conversion of U.S. dollars into the Specified
Currencies and vice versa. Banks offer non-U.S. dollar checking or savings
account facilities in the United States only on a limited basis. However, if you
make a request five Business Days or more before the date of delivery of the
notes, or by any other day determined by the applicable Exchange Rate Agent, the
Exchange Rate Agent will arrange for the conversion of U.S. dollars into the
Specified Currency set forth in the pricing supplement to enable you to pay for
the Foreign Currency Notes. The Exchange Rate Agent will make conversions on
terms and subject to the conditions, limitations, and charges as the Exchange
Rate Agent may from time to time establish in accordance with its regular
foreign exchange practices. You will bear all costs of exchange of the Foreign
Currency Notes.
Distribution of Foreign Currency Notes
Unless otherwise specified in the applicable pricing supplement, Foreign
Currency Notes will be issued in global form to the London Paying Agent or its
nominee who will hold such notes as common depositary for Clearstream and
Euroclear. Unless otherwise specified in the applicable pricing supplement,
investors will hold book-entry interests in a foreign currency global note
through organizations that participate, directly or indirectly, in Clearstream
and Euroclear systems, as applicable. Book-entry interests in foreign currency
notes and all transfers relating to foreign currency notes will be reflected
only in the book-entry records of Euroclear and Clearstream.
Payment of Principal and Interest
We will make all payments on Foreign Currency Notes in the Specified
Currency. However, except as provided below or as otherwise specified in the
pricing supplement, you will receive all payments on Foreign Currency Notes in
U.S. dollars as converted by the Exchange Rate Agent we appoint. However, unless
the pricing supplement specifies to the contrary, you may elect to receive
payments in the Specified Currency under the circumstances described below.
The Exchange Rate Agent will base the U.S. dollar amount, if any, you may
receive on a Foreign Currency Note on the highest bid quotation received by the
Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the
second Business Day preceding the applicable Interest Payment Date. The Exchange
Rate Agent must receive bids from three recognized foreign exchange dealers (one
of which may be the Exchange Rate Agent) for the purchase by the quoting dealer
of the Specified Currency for U.S. dollars for settlement on the applicable
payment date, in an amount equal to the aggregate amount of the Specified
Currency payable to all holders of notes not electing to receive the Specified
Currency on the payment date and at which the applicable dealer commits to
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execute a contract. If three bid quotations are not available, payments will be
made in the Specified Currency. You will bear all currency exchange costs and we
will deduct the costs incurred from payments made to you.
Unless the pricing supplement specifies otherwise, you may elect to receive
payments on the Foreign Currency Notes in the Specified Currency by transmitting
a written request to the principal offices of the Paying Agent:
o prior to the Record Date immediately preceding any Interest Payment
Date; or
o at least fifteen days prior to the maturity date or the date of
redemption or repayment, if any, in the case of payments to be made on
the maturity date or upon earlier redemption or repayment.
You may mail or hand deliver your written request or deliver it by cable,
telex, or other form of facsimile transmission. You may elect to receive payment
in the Specified Currency for all payments and need not file a separate election
for each payment. Your election will remain in effect until revoked by written
notice to the Paying Agent, but written notice of any revocation must be
received by the Paying Agent:
o on or prior to the Record Date in the case of any payment of interest;
or
o at least fifteen days prior to the maturity date or the date of
redemption or repayment, if any, in the case of the payment of
principal and premium, if any.
If you hold Foreign Currency Notes in the name of a broker or nominee, you
should contact your broker or nominee to determine whether and how you may elect
to receive payments in the Specified Currency.
Unless the pricing supplement specifies otherwise, we will make payments on
each Foreign Currency Note in U.S. dollars in the manner specified under
"Description of the Notes--Payment and Paying Agents." Unless the pricing
supplement specifies to the contrary, if you elect to receive payments on
Foreign Currency Notes in the Specified Currency, we will make payments to you
as follows:
o We will pay interest (other than interest payable, on the maturity
date or upon earlier redemption or repayment) to you in the Specified
Currency by bank draft mailed to you or your nominee or other
registered holder at the close of business on the applicable Record
Date.
o We will pay the principal of and premium, if any, on the Foreign
Currency Note and any interest payable to you when due by bank draft
upon surrender of the note at the corporate trust office of the Paying
Agent in the Borough of Manhattan, City of New York.
o We will draw the drafts denominated in a Specified Currency on a bank
office located outside the United States.
If the Paying Agent receives a written request to be paid by wire transfer
from a holder of the equivalent of U.S. $1,000,000 or more in aggregate
principal amount of the Foreign Currency Notes not later than the close of
business on a Record Date for an interest payment or the fifteenth day prior to
the maturity date or the date of redemption or repayment, if any, the Paying
Agent will, subject to applicable laws and regulations, until it receives notice
to the contrary (but, in the case of payments to be made on the maturity date or
earlier redemption or repayment, only after the surrender of the note or notes
in the Borough of Manhattan, City of New York, not later than one Business Day
prior to the maturity date or the date of redemption or repayment, as the case
may be), make all payments denominated in the Specified Currency to the
requesting holder by wire transfer to an account designated in the written
request and maintained in the country of the Specified Currency.
Outstanding Foreign Currency Notes
Unless the pricing supplement specifies otherwise, for purposes of
calculating the principal amount of any Foreign Currency Note payable in a
Specified Currency for any purpose under the Indentures, we will deem the
principal amount of the Foreign Currency Note at any time outstanding to be the
U.S. dollar equivalent, determined as of the date of the original issuance of
the Foreign Currency Note.
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Payment Currency
If a Specified Currency is not available for any payment on a Foreign
Currency Note due to circumstances beyond our control, we will be entitled to
meet our obligations to you by making payment in U.S. dollars. Any payment in
U.S. dollars will be on the basis of the noon buying rate in the City of New
York for cable transfers of the Specified Currency as certified for customs
purposes by the Federal Reserve Bank of New York (the "Market Exchange Rate") on
the second day prior to any payment, or if the Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate or
as the pricing supplement otherwise specifies. Under these circumstances, any
payment made in U.S. dollars where required payment is in a Specified Currency
will not constitute a default under the Indentures.
If we are required to make payments on a Foreign Currency Note in Euros,
and Euros are unavailable due to circumstances beyond our control, we will make
all payments due on that date with respect to the Foreign Currency Notes in U.S.
dollars. The Exchange Rate Agent will convert the amount payable in Euros on any
date into U.S. dollars, at a rate determined by the Exchange Rate Agent as of
the second Business Day prior to the date on which payment is due on the
following basis: The equivalent of Euros in U.S. dollars will be calculated by
aggregating the U.S. dollar equivalents of the Components. The Paying Agent will
determine the U.S. dollar equivalent of each of the Components on the basis of
the most recently available Market Exchange Rate, or as otherwise specified in
the applicable pricing supplement. The "Components" for this purpose will he the
currency amounts that were components of the Euro as of the latest date on which
Euros were used in the European Monetary System.
If the official unit of any component currency is altered by way of
combination or subdivision, the Exchange Rate Agent or the Paying Agent, as the
case may be, will multiply or divide the number of units of that currency as a
Component in the same proportion. If two or more component currencies are
consolidated into a single currency, the Exchange Rate Agent or Paying Agent, as
the case may be, will replace the amounts of those currencies as Components by
an amount in such single currency equal to the sum of the amounts of the
consolidated component currencies expressed in the consolidated currency. If any
component currency is divided into two or more currencies, the Exchange Rate
Agent or Paying Agent, as the case may be, will replace the amount of that
currency as a Component with amounts of those currencies, each of which shall
have a value on the date of division equal to the amount of the former component
currency divided by the number of currencies into which that currency was
divided.
All determinations referred to above by the Exchange Rate Agent or Paying
Agent shall be at its sole discretion (except to the extent expressly provided
in this prospectus supplement that any determination is subject to our approval)
and, in the absence of manifest error, shall be conclusive for all purposes and
binding on you. The Exchange Rate Agent or Paying Agent, as the case may be,
shall have no liability for the determination. Any payment made in U.S. dollars
in the circumstances set forth above where required payment is in a Specified
Currency will not constitute a default under the Indentures.
S-30
FOREIGN CURRENCY RISKS
This prospectus supplement, the prospectus and the pricing supplement do
not describe all the risks of an investment in notes that are indexed to or
denominated in currencies other than the U.S. dollar. You should consult your
own financial, tax, and legal advisors as to the risks entailed by an investment
in the notes. The notes may not be an appropriate investment for investors who
are unsophisticated with respect to foreign currency, currency unit or indexed
transactions.
Exchange Rates and Exchange Controls
Notes that are denominated in currencies other than the U.S. dollar, which
we refer to in this prospectus supplement as "Foreign Currency Notes," have
significantly more risk to U.S. residents than a similar investment in a
security denominated in U.S. dollars. Similarly, notes that are effectively
indexed to currencies other than the U.S. dollar, which we refer to in this
prospectus as "Currency Indexed Notes," have significantly more risk to U.S.
residents than a similar investment in a non-Currency Indexed Note. Some of
these risks are:
o the possibility of significant changes in rates of exchange between
the U.S. dollar and the Specified Currency; and
o the possibility of the imposition or modification of foreign exchange
controls by either the U.S. or foreign governments.
These risks generally depend on economic and political events over which we
have no control. In recent years, rates of exchange between the U.S. dollar and
some foreign currencies have been highly volatile and you should expect
volatility in the future. The exchange rate between the U.S. dollar and a
foreign currency or currency unit is in most cases established principally by
the supply of and demand for those currencies. Changes in the exchange rate
result over time from the interaction of many factors, including:
o rates of inflation;
o interest rate levels:
o balances of payments; and
o the extent of governmental surpluses or deficits in the countries
issuing currencies.
These factors are in turn sensitive to, among other things, the monetary,
fiscal and trade policies pursued by governments and those of other countries
important to international trade and finance. Fluctuations in any particular
exchange rate that have occurred in the past are not necessarily indicative of
fluctuations in the exchange rate that may occur during the term of any note.
You may receive a yield on U.S. dollar-equivalent Foreign Currency Notes below
their coupon rate, and, in some circumstances, you could suffer a loss if the
Specified Currency depreciates against the U.S. dollar. Similarly, if the
Specified Currency depreciates against the Indexed Currency you may receive a
return of principal in an amount less than the face amount of a Currency Indexed
Note, which would also result in an effective yield below the stated interest
rate.
Foreign exchange rates can either be fixed by sovereign governments or
floating. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. National governments generally
do not allow their currencies to float freely at all times. Sovereign
governments use a variety of techniques to affect the exchange rate of their
currencies including:
o intervention by a country's central bank;
o imposition of regulatory controls or taxes;
o issuance of a new currency to replace an existing currency; or
S-31
o alteration of the exchange rate or relative exchange characteristics
by devaluation or revaluation of a currency.
As a result, your U.S. dollar equivalent yields could be affected by
governmental actions, which could change or interfere with previously freely
determined currency valuations, fluctuations in response to other market forces,
and the movement of currencies across borders. We will not adjust or change the
terms of any notes in the event that exchange rates become fixed, or in the
event of any devaluation or revaluation or imposition of exchange or other
regulatory controls or taxes, or in the event of other developments, affecting
the U.S. dollar or any applicable currency or currency unit.
Governments have imposed from time to time, and may in the future impose,
exchange controls which could affect exchange rates as well as the availability
of a specified foreign currency at a note's maturity. Even if there are no
actual exchange controls, it is possible that the Specified Currency for any
particular note that would otherwise be payable in the Specified Currency would
not be available at the note's maturity. In that event, we will make required
payments in U.S. dollars on the basis of the Market Exchange Rate on the second
day prior to the payment, or if the current Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate. See
"Special Provisions Relating to Foreign Currency Notes--Payment Currency."
The information set forth in this section of the prospectus supplement is
directed primarily to prospective purchasers who are U.S. residents. We disclaim
any responsibility to advise prospective purchasers who are residents of
countries other than the United States with respect to any matters that may
affect the purchase, holding, or receipt of payments of principal of and premium
and interest, if any, on the notes. You should consult your own counsel with
regard to these matters.
Judgments
Courts in the United States generally would grant or enforce a judgment
relating to an action based on Foreign Currency Notes and Currency Indexed Notes
only in U.S. dollars, and the date used to determine the rate of conversion of
foreign currencies into U.S. dollars will depend on various factors, including
which court rendered the judgment. Section 27 of the Judiciary Law of the State
of New York provides that a New York State court would be required to enter a
judgment in the Specified Currency of the underlying obligation. This judgment
would then be converted into U.S. dollars at the rate of exchange prevailing on
the date of entry of the judgment.
S-32
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes material U.S. federal income tax
consequences and in the case of Non-U.S. Holders (as defined below), certain
U.S. federal state tax consequences of the ownership and disposition of notes as
of the date of this prospectus supplement. Except where indicated, it deals only
with notes held by initial purchasers as capital assets for U.S. federal income
tax purposes (generally properly held for investment) and does not deal with
special situations, such as those of banks or dealers in securities or financial
institutions, life insurance companies, U.S. Holders (as defined below) whose
"functional currency" is not the U.S. dollar, partnerships or other flow-through
entities for U.S. federal income tax purposes, persons holding notes in
connection with a hedging transaction, "straddle," conversion transaction or
other integrated transaction, traders in securities that elect to mark to market
their securities holdings or holders liable for the alternative minimum tax. In
addition, with respect to a particular series of notes, the discussion below
must be read with the discussion of material U.S. federal income tax
consequences that may appear in the pricing supplement for that series. The
discussion below also is based upon the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations ("Treasury Regulations"),
rulings, and judicial decisions thereunder as of the date of this prospectus
supplement. Those authorities may be repealed, revoked, modified, or otherwise
changed so as to result in U.S. federal income tax consequences different from
those discussed below. Persons considering the purchase, ownership, or
disposition of notes should consult their own tax advisors concerning the U.S.
federal income tax consequences in light of their particular situations as well
as any consequences arising under the laws of any other taxing jurisdiction.
U.S. Holders
A "U.S. Holder" is a beneficial owner of a note, as defined for U.S.
federal income tax purposes, that is:
o a citizen or resident of the United States;
o a corporation created or organized in or under the laws of the United
States, any state of the United States, or the District of Columbia;
o an estate the income of which is subject to U.S. federal income
taxation regardless of its source; or
o a trust if (i) 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 and (ii) it has made a valid
election under applicable Treasury regulations to be treated as a U.S.
person.
A "Non-U.S. Holder" is a beneficial owner of a note, as defined for U.S.
federal income tax purposes, that is neither a U.S. Holder or a flow-through
entity for U.S. federal income tax purposes.
If a note is held by an entity that is a flow-through entity for U.S.
federal income tax purposes (e.g., a partnership or disregarded entity), the
beneficial owner of the note is generally the owner of an interest in the
flow-through entity (unless such owner is itself a flow-through entity). The
treatment of the owner of an interest in a flow-through entity will generally
depend upon the status of the owner and upon the activities of the flow-through
entity. Holders of notes who are flow-through entities for U.S. federal income
tax purposes, and owners of interests in such flow-through entities, should
consult their tax advisors about the U.S. federal income tax consequences of
holding and disposing of notes.
Payments of Interest. Except as set forth below, interest on a note will
generally be taxable to a U.S. Holder as ordinary income from domestic sources
at the time it is paid or accrued in accordance with the U.S. Holder's regular
method of accounting for U.S. federal income tax purposes
Original Issue Discount. The following is a summary of the principal U.S.
federal income tax consequences of the ownership of Original Issue Discount
Notes by U.S. Holders. Additional rules applicable to Original Issue Discount
Notes that are denominated in or determined by reference to a Specified Currency
are described under "Foreign Currency Notes" below.
S-33
A note may be issued for an amount that is less than its stated redemption
price at maturity (i.e., the sum of all payments to be made on the note other
than "qualified stated interest" payments). The difference between the stated
redemption price at maturity of the note and its "issue price," if such
difference is at least 0.25 percent of the stated redemption price at maturity
multiplied by the number of complete years to maturity, will be "original issue
discount" ("OID"). The "issue price" of each note will be the initial offering
price to the public at which a substantial amount of the particular offering is
sold for cash. A "qualified stated interest" payment is stated interest that is
unconditionally payable at least annually at a single fixed rate or, generally,
at a rate (a "Variable Rate") that varies among payment periods:
o if that rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds or
o that is based upon the changes in the yield or price of certain
actively traded personal property.
Interest is payable at a single fixed rate only if the rate appropriately
takes into account the length of the interval between payments. Notes that may
be redeemed prior to their maturity date at the option of the issuer will be
treated from the time of issuance as having a maturity date for U.S. federal
income tax purposes on such redemption date if such redemption would result in a
lower yield to maturity. Notes that may be redeemed prior to their maturity date
at the option of the holder will be treated from the time of issuance as having
a maturity date for U.S. federal income tax purposes on such redemption date if
such redemption would result in a higher yield to maturity. The pricing
supplement will specify if we issue notes that are redeemable prior to maturity
and if we determine that the notes will be deemed to have a maturity date for
U.S. federal income tax purposes prior to their maturity date.
In certain cases (such as where interest payments are deemed not to be
qualified stated interest payments), notes that bear interest may be deemed to
be Original Issue Discount Notes for U.S. federal income tax purposes. As a
result, the inclusion of interest in income for U.S. federal income tax purposes
may vary from the actual cash payments of interest made on those notes,
generally accelerating the recognition of income for cash method taxpayers. For
those purposes, the Treasury Regulations provide rules for determining whether
payments pursuant to a note with a Variable Rate will be treated as payments of
qualified stated interest. The pricing supplement for any series of notes will
specify whether they are Original Issue Discount Notes and, in the case of notes
with a Variable Rate, will describe the applicable rules for inclusion of OID in
gross income of a U.S. Holder.
U.S. Holders of Original Issue Discount Notes having a maturity upon
issuance of more than one year must, in general, include OID in income in
advance of the receipt of some or all of the related cash payments. The amount
of OID includible in gross income by the U.S. Holder of an Original Issue
Discount Note is the sum of the "daily portions" of OID with respect to the note
for each day during the taxable year in which such U.S. Holder held such note
("accrued OID"). The daily portion is determined by allocating to each day in
any "accrual period" a pro rata portion of the OID allocable to that accrual
period. The accrual period for an Original Issue Discount Note may be of any
length and may vary in length over the term of the note provided that each
accrual period is no longer than one year and each scheduled payment of
principal or interest occurs at the beginning or the end of an accrual period.
The amount of OID allocable to any accrual period is an amount equal to the
excess (if any) of:
o the product of the note's "adjusted issue price" at the beginning of
such accrual period and its yield to maturity, as determined on the
basis of compounding at the close of each accrual period and properly
adjusted for the length of the accrual period, over
o the sum of any qualified stated interest payments allocable to the
accrual period.
The following rules apply to determine OID allocable to an accrual period:
o if an interval between payments of qualified stated interest contains
more than one accrual period, the amount of qualified stated interest
payable at the end of the interval is allocated on a pro rata basis to
each accrual period in the interval and the adjusted issue price at
the beginning of each accrual period in the interval must be increased
by the amount of any qualified stated interest that has accrued prior
to the beginning of the first day of the accrual period but is not
payable until the end of the interval:
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o if the accrual period is the final accrual period, the amount of OID
allocable to the final accrual period is the difference between the
amount payable at maturity (other than a payment of qualified stated
interest) and the adjusted issue price of the note at the beginning of
the final accrual period: and
o if all accrual periods are of equal length, except for an initial
short accrual period, the amount of OID allocable to the initial short
accrual period may be computed under any reasonable method.
The adjusted issue price of the note at the start of any accrual period is
equal to its issue price, increased by the accrued OID for each prior accrual
period, and reduced by any prior payments with respect to that note that were
not qualified stated interest payments. Under these rules, a U.S. Holder
generally will have to include in income increasingly greater amounts of OID in
successive accrual periods. We are required to report to the IRS the amount of
OID accrued on notes held of record by persons other than corporations and other
exempt holders.
If a U.S. Holder acquires a note for an amount greater than the note's
adjusted issue price but less than the sum of all amounts (other than qualified
stated interest) payable with respect to the note after the date of acquisition,
the note will be treated as acquired at an acquisition premium. If a U.S. Holder
acquires a note at an acquisition premium, the U.S. Holder's daily portions of
OID with respect to the note will be reduced by an allocable portion of the
amount by which the price paid by such holder exceeds the note's adjusted issue
price.
In the case of Original Issue Discount Notes having a term of one year or
less ("Short-Term Original Issue Discount Notes"), OID is included in income
currently either on a straight-line basis or, if the U.S. Holder so elects,
under the constant yield method used generally for OID as described above.
However, U.S. Holders that are individuals or other cash method taxpayers are
not required to include accrued OID on Short-term Original Issue Discount Notes
in their income currently unless they elect to do so. If Such a U.S. Holder that
does not elect to currently include the OID in income subsequently recognizes a
gain upon the disposition of the note, such gain will be treated as ordinary
interest income to the extent of the accrued OID. Furthermore, a non-electing
U.S. Holder of a Short-Term Original Issue Discount Note may be required to
defer deductions for a portion of the U.S. Holder's interest expense with
respect to any indebtedness incurred or maintained to purchase or carry the
note.
Market Discount. If a U.S. Holder acquires a note, other than in an
original issue, at a greater than de minimis market discount and thereafter
recognizes gain upon a disposition of the note, the lesser of:
o such gain, or
o the portion of the market discount which accrued on a straight line
basis, or, if the U.S. Holder so elects, on a constant yield basis,
while the note was held by such U.S. Holder,
will be treated as ordinary income at the time of the disposition or gift.
For these purposes, market discount means the amount by which the
purchaser's tax basis in the note immediately after its acquisition
o is exceeded by the sum of all amounts (other than qualified stated
interest) payable with respect to the note after the date of
acquisition, or
o in the case of an Original Issue Discount Note, is exceeded by the
adjusted issue price of the note at the time of its acquisition by the
U.S. Holder.
Market discount is considered de minimis if it is less than 0.25 percent,
multiplied by the number of remaining complete years to maturity, and multiplied
by the sum of all amounts (other than qualified interest) payable with respect
to the note (or, in the case of an Original Issue Discount Note, the adjusted
issue price). The market discount rules do not apply to a note with a maturity
of one year or less.
A U.S. Holder may elect to include accrued market discount in income
currently, which would correspondingly increase the U.S. Holder's basis in the
notes, rather than upon disposition of the notes. This election once made
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applies to all market discount obligations acquired on or after the first
taxable year to which the election applies, and may not be revoked without the
consent of the IRS.
A U.S. Holder of notes acquired at a market discount generally will be
required to defer the deduction of a portion of the interest on any indebtedness
incurred or maintained to purchase or carry such notes until the market discount
is recognized upon a subsequent disposition of such notes. Such a deferral is
not required, however, if the U.S. Holder elects to include accrued market
discount in income currently.
Amortization of Premium. A note may be considered to have been issued at a
"premium" to the extent that the U.S. Holder's tax basis in the note exceeds the
note's outstanding stated redemption price at maturity. A U.S. Holder generally
may elect to amortize any premium on a note by offsetting payments of qualified
stated interest on the note with the premium allocable to the accrual period or
periods to which the qualified stated interest relates. The offset occurs at the
time the holder of the note includes the qualified stated interest in its gross
income in accordance with its regular method of tax accounting. The amount of
premium allocable to each accrual period is determined using a constant yield
method. In the case of instruments that provide for alternative payment
schedules, the amount of premium is generally determined by assuming that the
holder will exercise or not exercise options in a manner that maximizes the
holder's yield and we will exercise or not exercise options in a manner that
minimizes the holder's yield. Any election would apply to all debt securities
(other than debt securities the interest on which is excludable from gross
income) held or subsequently acquired by the U.S. Holder on or after the first
day of the first taxable year to which the election applies and is irrevocable
without the consent of the IRS.
Election to Treat All Interest as OID. U.S. Holders may elect to treat all
interest on any note as OID and calculate the amount includible in gross income
under the constant yield method described above. For the purposes of this
election, interest includes stated interest, acquisition discount, OID, de
minimis OID, market discount, de minimis market discount, and unstated interest,
as adjusted by any amortizable bond premium or acquisition premium. If a U.S.
Holder makes this election for a note with amortizable bond premium, the
election is treated as an election under the amortizable bond premium provisions
described above and the electing U.S. Holder will be required to amortize bond
premium for all of the holder's other debt instruments with amortizable bond
premium. The U.S. Holder must make the election for the taxable year in which it
acquires the note, and the election may not be revoked without the consent of
the IRS. U.S. Holders should consult with their own tax advisors about this
election.
Sale, Exchange, or Retirement of Notes. A U.S. Holder's tax basis in a note
will, in general, be the U.S. Holder's cost therefor, increased by all accrued
OID or market discount previously included in income and reduced by any
amortized premium and any cash payments on the note other than qualified stated
interest payments. Upon the sale, exchange, or retirement of a note, a U.S.
Holder will recognize gain or loss equal to the difference between the amount
realized upon the sale, exchange, or retirement and the adjusted tax basis of
the note. Except as described above with respect to certain Short-Term Original
Issue Discount Notes and notes with market discount, and except with respect to
gain or loss attributable to changes in exchange rates as described below with
respect to certain Foreign Currency Notes, such gain or loss will be capital
gain or loss and will be long-term capital gain or loss if at the time of sale,
exchange, or retirement the note has been held for more than one year. For
individual U.S. Holders, long-tern capital gains are, under certain
circumstances, taxed at lower rates than ordinary income. The deductibility of
capital losses is subject to limitations.
Foreign Currency Notes. The following is a summary of the principal U.S.
federal income tax consequences to a U.S. Holder of the ownership of a note
denominated in a Specified Currency other than the U.S. dollar and deals only
with Foreign Currency Notes that are not treated, for U.S. federal income tax
purposes, as an integrated economic transaction in conjunction with one or more
spot contracts, futures contracts or similar financial instruments. Persons
considering the purchase of Foreign Currency Notes should consult their own tax
advisors with regard to the application of the U.S. federal income tax laws to
their particular situations, as well as any consequences arising under the laws
of any other taxing jurisdiction.
If interest payments are made in a Specified Currency to a U.S. Holder who
is not required to accrue such interest prior to its receipt, the holder will be
required to include in income the U.S. dollar value of the amount received
(determined by translating the Specified Currency received at the "spot rate"
for the Specified Currency on
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the date that payment is received), regardless of whether the payment is in fact
converted into U.S. dollars. The holder does not recognize any exchange gain or
loss with respect to the receipt of payment.
A U.S. Holder who is required to accrue interest on a Foreign Currency Note
prior to receipt of interest will be required to include in income for each
taxable year the U.S. dollar value of the interest that has accrued during each
year, determined by translating interest at the average rate of exchange for the
period or periods during which interest accrued. The average rate of exchange
for an interest accrual period is generally the simple average of the exchange
rates for each business day of the application period (or other average that is
reasonably derived and consistently applied by the holder). An accrual basis
holder may, however, elect to translate interest income at the spot rate on the
last day of the accrual period (or last day of the taxable year in the case of
an accrual period that straddles the holder's taxable year) or on the date the
interest payment is received if that date is within five business days of the
end of the accrual period. Any election would apply to all debt securities held
or subsequently acquired by the U.S. Holder on or after the first day of the
first taxable year to which the election applies and is irrevocable without the
consent of the IRS. Upon receipt of an interest payment on a note, the holder
will recognize exchange gain or loss in an amount equal to the difference
between the U.S. dollar value of the payment (determined by translating any
Specified Currency received at the spot rate for such Specified Currency on the
date received) and the U.S. dollar value of the interest income that holder has
previously included in income with respect to the payment. Any gain or loss
generally will not be treated as interest income or expense, except to the
extent provided in Treasury Regulations or administrative pronouncements of the
IRS.
OID on a Foreign Currency Note will be determined for any accrual period in
the applicable Specified Currency and then translated into U.S. dollars in the
same manner as interest income accrued by a U.S. Holder on the accrual basis, as
described above. Likewise, a U.S. Holder will recognize exchange gain or loss
when the OID is paid to the extent of the difference between the U.S. dollar
value of the accrued OID (determined in the same manner as for accrued interest)
and the U.S. dollar value of the payment (determined by translating any
Specified Currency received at the spot rate for the Specified Currency on the
date of payment). For this purpose, all receipts on a note will be viewed:
o first as the receipt of any periodic interest payments called for
under the terms of the note;
o second as receipts of previously accrued OID (to the extent of such
OID), with payments considered made for the earliest accrual periods
first; and
o thereafter as the receipt of principal.
A U.S. Holder's tax basis in a Foreign Currency Note will be the U.S.
dollar value of the Specified Currency amount paid for that Foreign Currency
Note determined at the time of purchase. In the case of a note that is
denominated in a foreign currency and is traded on an established securities
market, a cash basis taxpayer (or, if it elects, an accrual basis taxpayer) will
determine the U.S. dollar value of the cost of the note by translating the
amount paid at the spot rate of exchange on the settlement date of the purchase.
A U.S. Holder who purchases a note with the applicable previously owned
Specified Currency will recognize exchange gain or loss at the time of purchase
attributable to the difference at the time of purchase, if any, between the tax
basis in the Specified Currency and the fair market value of the note in U.S.
dollars on the date of purchase. The gain or loss will be ordinary income or
loss.
For purposes of determining the amount of any gain or loss recognized by a
U.S. Holder on the sale, exchange, or retirement of a Foreign Currency Note, the
amount realized will be the U.S. dollar value of the amount realized in the
Specified Currency (other than amounts attributable to accrued but unpaid
interest not previously included in the holder's income), determined at the time
of the sale, exchange, or retirement and in accordance with the applicable
method of accounting. In the case of a note which is denominated in a foreign
currency and is traded on an established securities market, a cash basis
taxpayer (or, if it elects, an accrual basis taxpayer) will determine the U.S.
dollar value of the amount realized by translating that amount at the spot rate
of exchange on the settlement date of the sale.
A U.S. Holder will recognize exchange gain or loss attributable to the
movement in exchange rates between the time of purchase and the time of
disposition (including the sale, exchange, or retirement) of a Foreign Currency
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Note. This gain or loss will be treated as ordinary income or loss. This gain or
loss may be required to be netted against any non-exchange gain or loss in
calculating overall gain or loss on a note. If a Foreign Currency Note is
denominated in one of certain hyperinflationary currencies, generally exchange
gain or loss would be realized with respect to movements in the exchange rate
between the beginning and end of each taxable year (or such shorter period) that
the note was held and the exchange gain or loss would be treated as an addition
or offset, respectively, to the accrued interest income on (and an adjustment to
the holder's tax basis in) the Foreign Currency Note.
A U.S. Holder's tax basis in any Specified Currency received as interest on
(or OID with respect to), or received on the sale or retirement of, a Foreign
Currency Note will be the U.S. dollar value thereof at the spot rate at the time
the holder received the Specified Currency. Any gain or loss recognized by a
U.S. Holder on a sale, exchange, or other disposition of Specified Currency will
be ordinary income or loss and will not be treated as interest income or
expense, except to the extent provided in Treasury Regulations or administrative
pronouncements of the IRS.
Indexed Notes. The tax treatment of a U.S. Holder of an Indexed Note will
depend on factors including the specific index or indices used to determine
indexed payments on the note and the amount and timing of any contingent
payments of principal and interest. You should carefully examine the pricing
supplement and should consult your own tax advisors regarding the U.S. federal
income tax consequences of the holding and disposition of such notes before
deciding to purchase an Indexed Note.
Non-U.S. Holders
Under present U.S. federal tax law, and subject to the discussion below
concerning backup withholding:
(a) payments of principal, interest (including OID, if any) and
premium on the notes by CIT or our paying agent to any Non-U.S. Holder will
be exempt from the 30% U.S. federal withholding tax, provided that:
o the holder does not own, actually or constructively, 10% or more
of the total combined voting power of all classes of stock of CIT
entitled to vote;
o the holder is not a controlled foreign corporation related,
directly or indirectly, to CIT through stock ownership or a bank
receiving interest described in section 881(c)(3)(A) of the Code;
and
o 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 Non-U.S. Holder generally will not be subject to U.S. federal
income tax on gain realized on the sale, exchange, or retirement of the
note, unless:
o the holder is an individual who is present in the U.S. for 183
days or more in the taxable year of the disposition and certain
other conditions are met; or
o the gain is effectively connected with the holder's conduct of a
trade or business in the U.S.; and
(c) a note held by an individual who is not, for U.S. estate tax
purposes, a resident or citizen of the U.S. at the time of his death will
not be subject to U.S. 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 stock of CIT entitled to vote and, at the
time of the individual's death, payments with respect to the note would not
have been effectively connected to the conduct by the individual of a trade
or business in the U.S..
The certification requirement referred to in subparagraph (a) will be
fulfilled if the beneficial owner of a note certifies on Internal Revenue
Service ("IRS") Form W-8BEN or other successor form, under penalties of perjury,
that it is not a U.S. 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 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
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copy thereof; provided that a foreign financial institution will fulfill the
certification requirement by filing IRS Form W-8IMY if it has entered into an
agreement with the IRS to be treated as a qualified intermediary. With respect
to notes held by a foreign partnership, unless the foreign partnership has
entered into a withholding agreement with the IRS, the foreign partnership will
generally be required to provide an IRS Form W-8IMY or other successor form and
to associate with such form an appropriate certification or other appropriate
documentation from each partner. Prospective investors, including foreign
partnerships and their partners, should consult their tax advisers regarding
possible additional reporting requirements.
If a Non-U.S. Holder of a note is engaged in a trade or business in the
United States, and if premium (if any) or interest (including OID) on the note
(or gain realized on its sale, exchange, or other disposition) is effectively
connected with the conduct of such trade or business, the Non-U.S. Holder,
although exempt from the withholding tax discussed in the preceding paragraphs,
will be subject to regular U.S. income tax on its effectively connected income,
generally in the same manner as if it were a U.S. Holder. See "U.S. Holders"
above. In lieu of the certificates 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 Non-U.S. 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 U.S. federal income tax law, information reporting
requirements apply to certain payments of principal, premium, and interest
(including OID) made to, and to the proceeds of sales before maturity by,
non-corporate U.S. Holders. In addition, a backup withholding tax will apply if
the non-corporate U.S. 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. The backup
withholding rate is currently 28%. 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 note to Non-U.S. Holders if the certifications required by the Code
sections 871(h) and 881(c) as described above are received, provided that CIT or
our paying agent, as the case may be, does not have actual knowledge or reason
to know that the payee is a U.S. person.
Under current Treasury Regulations, payments on the sale, exchange, or
other disposition of a note made to or through a non-U.S. office of a broker
generally will not be subject to information reporting or backup withholding.
However, if the broker is (i) a U.S. person, (ii) a controlled foreign
corporation for U.S. federal income tax purposes, (iii) a foreign person 50% or
more of whose gross income is effectively connected with a U.S. trade or
business for a specified three-year period, or (iv) a foreign partnership with
certain connections to the U.S., then information reporting will he required
unless the broker has in its records documentary evidence that the beneficial
owner is not a U.S. person and certain other conditions are met or the
beneficial owner otherwise establishes an exemption. Backup withholding may
apply to any payment that such broker is required to report if such broker has
actual knowledge that the payee is a U.S. person. Payment to or through the U.S.
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 U.S. person or otherwise establishes an exemption.
Non-U.S. Holders of notes should consult their tax advisers regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption therefrom, and the procedure for
obtaining an exemption, if available.
Any amounts withheld under the backup withholding rules will be allowed as
a credit against the holder's U.S. federal income tax liability and may entitle
that holder to a refund, provided that the required information is timely
furnished to the IRS.
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USE OF PROCEEDS
We intend to use the net proceeds from the sale of the notes to provide
additional working funds for us and our subsidiaries. Generally, we use the
proceeds of our short-term borrowings primarily to originate and purchase
receivables in the ordinary course of our business. We have not yet determined
the amounts which we may use in connection with our business or which we may
furnish to our subsidiaries. From time to time, we may also use the proceeds to
finance bulk purchases of receivables and/or the acquisition of other
finance-related businesses.
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CAPITALIZATION OF CIT GROUP INC.
The following table sets forth our capitalization as of June 30, 2004. This
table should be read in conjunction with "Selected Consolidated Financial
Information of CIT Group Inc.," which is included elsewhere in this prospectus
supplement.
June 30, 2004
(in millions of
U.S. Dollars)
---------------
Commercial paper ............................................................... $ 4,170.4
Term debt ...................................................................... 30,261.9
Preferred capital securities ................................................... 254.6
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 authorized; none issued
and outstanding .......................................................... --
Common stock, $0.01 par value, 600,000,000 authorized; 212,092,592 issued and
211,195,862 outstanding .................................................. 2.1
Additional paid in capital .................................................. 10,672.2
Accumulated deficit ......................................................... (4,831.8)
Accumulated other comprehensive loss ........................................ (118.1)
Treasury stock, 896,730 shares, at cost ..................................... (32.6)
---------
Total stockholders' equity .................................................. 5,691.8
---------
Total capitalization ........................................................... 40,378.7
Goodwill and other intangible assets ........................................... (516.4)
---------
Total tangible capitalization .................................................. $39,862.3
=========
Total tangible stockholders' equity ............................................ $ 5,175.4
=========
Other than as disclosed or contemplated in this prospectus supplement or in
the documents incorporated in this prospectus supplement by reference, since
June 30, 2004, there has been no material change in the capitalization of CIT
and its consolidated subsidiaries.
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PLAN OF DISTRIBUTION
We are offering the notes on a continuing basis for sale directly by us in
those jurisdictions where we are authorized to do so. In addition, subject to
the terms and conditions set forth in the Global Selling Agency Agreement among
us and the Agents, we may offer the notes through any of the Agents, Lehman
Brothers Inc., ABN AMRO Incorporated, Banc of America Securities LLC, Barclays
Capital Inc., Bear, Stearns & Co. Inc., BNP Paribas Securities Corp., Citigroup
Global Markets Inc., Credit Suisse First Boston LLC, Deutsche Bank Securities
Inc., Goldman, Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, UBS Securities LLC, Wachovia Capital Markets, LLC or one or more
other Agents we appoint from time to time, who have separately agreed to use
their reasonable best efforts to solicit offers to purchase the notes. We may
also sell notes to any Agent, as principal, at a discount for resale to one or
more investors or other purchasers at varying prices related to prevailing
market prices at the time of resale, as determined by that Agent or, if so
agreed, on a fixed public offering price basis. Unless otherwise specified in
the pricing supplement, we will pay each Agent a commission, in the form of a
discount which, depending on the maturity of the notes placed by such Agent,
will range from .05% to .75% of the principal amount of the notes, except that
the commission we may pay to the Agents with respect to notes with maturities of
greater than thirty years will be negotiated at the time we issue those notes.
We will not pay a commission to the Agents on the notes we sell directly to
purchasers. Payment of the purchase price of the notes will be required to be
made in immediately available funds.
The Agents may offer the notes they have purchased as principal to other
dealers. The Agents may sell notes to any dealer at a discount and, unless the
pricing supplement specifies to the contrary, a discount allowed to any dealer
will not be in excess of the discount we allow the Agent. Unless the pricing
supplement specifies to the contrary, an Agent purchasing a note as principal
will pay a price equal to 100% of the principal amount thereof less a percentage
equal to the commission applicable to any agency sale of a note of identical
maturity, and the Agent may resell this note to investors and other purchasers
as described above. After the initial public offering of notes to be resold to
investors and other purchasers, the public offering price (in the case of a
fixed price public offering), concession and discount may change.
We will have the sole right to accept offers to purchase notes and may, in
our absolute discretion, reject any proposed purchase of notes in whole or in
part. Each Agent will have the right, in its discretion reasonably exercised, to
reject in whole or in part any offer to purchase the notes.
If one or more Agents purchase notes in an offering as principal on a fixed
price basis, the Agent or Agents may engage in certain transactions that
stabilize the price of those notes. Those transactions may consist of bids or
purchases for the purpose of pegging, fixing, or maintaining the price of those
notes. If the Agent or Agents create a short position in those notes (i.e., if
it sells notes in an aggregate principal amount exceeding that set forth in the
pricing supplement), that Agent or Agents may reduce that short position by
purchasing notes in the open market.
In general, the purchase of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might otherwise be in the absence of those purchases.
We and the Agents make no representation or prediction as to the direction
or magnitude of any effect that the transactions described above may have on the
price of the notes. In addition, we and the Agents make no representations that
anyone will engage in such transactions or that those transactions, once
commenced, will continue.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended. We have agreed to indemnify each Agent
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments each Agent may be required to make in respect thereof.
We have been advised by the Agents that each of the Agents may from time to
time purchase and sell notes in the secondary market, but is not obligated to do
so and may discontinue making a market in the notes at any time without notice.
No assurance can be given as to the existence or liquidity of any secondary
market for the notes.
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Some of the Agents or their affiliates have in the past, and may from time
to time in the future, provide investment banking and/or commercial banking
services to us and may from time to time engage in transactions with and/or
perform other services for us in the ordinary course of business. In addition,
the trustee, J.P. Morgan Trust Company, National Association, is an affiliate of
J.P. Morgan Securities Inc., one of the Agents.
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OFFERING RESTRICTIONS
The notes will be offered for sale in the United States and, from time to
time, in jurisdictions outside the United States, subject to applicable law.
Each Agent has agreed that it will not offer, sell, or deliver any of the
notes, directly or indirectly, or distribute this prospectus supplement, the
prospectus, any pricing supplement or any other offering material relating to
the notes, in or from any jurisdiction except under circumstances that will, to
the best of the Agent's knowledge and belief, result in compliance with the
applicable laws and regulations and which will not impose any obligations on us
except as set forth in the Global Selling Agency Agreement.
You may be required to pay stamp taxes and other charges in accordance with
the laws and practices of the country in which you purchase the notes. These
taxes and charges are in addition to the issue prices set forth on the cover
page.
United Kingdom
Each Agent has represented and agreed that:
1. No offer to public: with respect to notes which have a maturity of one
year or more and which are not to be admitted to the Official List of the UK
Listing Authority, it has not offered or sold and prior to the expiry of a
period of six months from the issue date of such notes will not offer or sell
any such notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995;
2. No deposit taking: in relation to any notes to be issued which have a
maturity of less than one year, (a) it is a person whose ordinary activities
involve it in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (b) it has not offered
or sold and will not offer or sell any notes other than to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or who
it is reasonable to expect will acquire, hold, manage or dispose of investments
(as principal or agent) for the purposes of their businesses where the issue of
the notes would otherwise constitute a contravention of section 19 of the
Financial Services and Markets Act of 2000 (the "FSMA") by the Issuer.
3. Financial Promotion: it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the FMSA) received by it in connection with the issue or sale of
any notes in circumstances in which Section 21(1) of the FSMA does not, or in
the case of the Company, would not, if it was not an authorized institution,
apply to the Company; and
4. General Compliance: it has complied and will comply with all applicable
provisions of Part VI of the FSMA with respect to anything done by it in
relation to any notes in, from or otherwise involving the United Kingdom.
Germany
Each Agent confirms that it is aware of the fact that no German sales
prospectus (Verkaufsprospekt) within the meaning of the Securities Sales
Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of the Federal Republic of
Germany has been or will be published with respect to the notes and that it will
comply with the Securities Sales Prospectus Act and any other laws and legal and
regulatory requirements applicable in the Federal Republic of Germany with
respect to the issue, sale and offering of securities. In particular, each of
the Agents represents that it has not engaged and agrees that it will not engage
in a public offering (offentliches Angebot) within the meaning of
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the Securities Sales Prospectus Act with respect to any notes otherwise in
accordance with the Securities Sales Prospectus Act.
The Netherlands
Each Agent agrees that it has not, directly or indirectly, offered or sold
and will not, directly or indirectly, offer or sell in The Netherlands any notes
with a denomination of less than 'E' 50,000 (or its foreign currency
equivalent) other than to persons who trade or invest in securities in the
conduct of a profession or business (which includes banks, stockbrokers,
insurance companies, pension funds, other institutional investors and finance
companies and treasury departments of large enterprises) unless one of the other
exemptions or exceptions to the prohibition contained in Article 3 of the Dutch
Securities Transactions Supervision Act 1995 ("Wet toezicht effectenverkeer
1995") is applicable and the conditions attached to such exemption or exception
are complied with.
The Republic of France
Each Agent agrees that it has not offered or sold and will not offer or
sell, directly or indirectly, the notes in France, except in compliance with the
relevant regulations issued from time to time by the Commission des Operations
de Bourse and to (i) qualified investors (investisseurs qualifies) and/or (ii) a
limited number of investors (cercle restreint d'investisseurs), all as defined
in and in accordance with Articles L 411-1 and L 411-2 of the French Code
Montetaire et Financier and decret no. 98-880 dated October 1, 1998.
The Republic of Italy
Each Agent has represented and agreed that the offering of the notes has
not been cleared by CONSOB (the Italian Securities and Exchange Commission)
pursuant to Italian securities legislation and, accordingly, no notes may be
offered, sold or delivered, nor may copies of this pricing supplement or of any
other document relating to the notes be distributed, in the Republic of Italy,
except (i) to professional investors (operatori qualificati), as defined in
Article 31, second paragraph, of CONSOB Regulation No. 11522 of July 1, 1998, as
amended, or (ii) in circumstances which are exempted from the rules on
solicitation of investments pursuant to Article 100 of Legislative Decree No. 58
of February 24, 1998 (the "Financial Services Act") and Article 33, first
paragraph, of CONSOB Regulation No. 11971 of May 14, 1999, as amended.
Each Agent has further represented and agreed that any offer, sale or
delivery of the notes or distribution of copies of this pricing supplement or
other document relating to the notes in the Republic of Italy under (i) or (ii)
above must be:
(a) made by an investment firm, bank or financial intermediary
permitted to conduct such activities in the Republic of Italy in
accordance with the Financial Services act and Legislative Decree
No. 385 of September 1, 1993 (the "Banking Act"), as amended; and
(b) in compliance with Article 129 of the Banking Act and the
implementing guidelines of the Bank of Italy pursuant to which
the issue on the offer of securities in the Republic of Italy may
need to be preceded and followed by an appropriate notice to be
filed with the Bank of Italy depending, among other things, on
the aggregate value of the securities issued or offered in the
Republic of Italy and their characteristics; and
(c) in accordance with any other applicable laws and regulations.
Japan
No series of notes has been nor will be registered under the Securities and
Exchange Law of Japan and each of the Agents has represented and agreed that it
and its affiliates have not offered or sold, and will not offer or sell,
directly or indirectly, any of the notes by it in or to residents of Japan or to
any persons for reoffering or resale, directly or indirectly, in Japan or to any
resident of Japan, except pursuant to an exemption from the registration
S-45
requirements of the Securities and Exchange Law of Japan available thereunder
and otherwise in compliance with the Securities and Exchange Law of Japan and
the other relevant laws, regulations and ministerial guidelines of Japan.
Hong Kong
Each Agent and its affiliates have represented and agreed that they have
not offered or sold, and they will not offer or sell, the notes by means of any
document to persons in Hong Kong other than persons whose ordinary business it
is to buy or sell shares or debentures, whether as principal or agent, or
otherwise in circumstances which do not constitute an offer to the public within
the meaning of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of Hong
Kong).
S-46
LUXEMBOURG LISTING AND OTHER GENERAL INFORMATION
We have applied to list the notes under the program on the Luxembourg Stock
Exchange in accordance with the rules of the Luxembourg Stock Exchange. In
connection with the listing application, we have deposited the Certificate of
Incorporation and the By-laws of CIT and a legal notice relating to the issuance
of the notes prior to listing with the Commercial Register in Luxembourg
(Registre de Commerce et des Societes de Luxembourg), where you may obtain
copies of these documents upon request. So long as any of the notes are
outstanding, we will make available, at the office of BNP Paribas Securities
Services, Luxembourg Branch, copies of these documents, this prospectus
supplement, the prospectus, the Indentures, and our current annual and quarterly
reports, as well as all future annual reports and quarterly reports, all of
which will be available for collection, except the Indentures, which will be
available for inspection. We will prepare our next annual report, which will
cover a twelve-month period ending December 31, 2004, within 75 days of
December 31, 2004 or any shorter period as required by applicable law. BNP
Paribas Securities Services, Luxembourg Branch, will act as intermediary
between CIT and the holders of the notes. In addition, you may obtain free
copies of the annual reports and quarterly reports of CIT at this office.
The Luxembourg Stock Exchange has allocated to the Global Medium Term Note
Program the number [12845] for listing purposes.
Other than as disclosed or contemplated in this prospectus supplement or in
the documents incorporated in this prospectus supplement by reference, there has
been no material adverse change in the financial position of CIT since June 30,
2004.
Other than as disclosed or contemplated in this prospectus supplement or in
the documents incorporated in this prospectus supplement by reference, neither
CIT nor any of its subsidiaries is involved in, or aware of any pending or
threatened, litigation, arbitration, or administrative proceedings relating to
claims or amounts that are material in the context of the issuance of the notes.
CIT's board of directors adopted resolutions authorizing the issuance and
sale of the notes on August 25, 2004. We undertake that each issuance of notes
from time to time under this prospectus supplement will be authorized by all
necessary corporate action on our part.
The notes, the Indentures, and the Global Selling Agency Agreement are
governed by, and are to be construed in accordance with, the laws of the State
of New York and of the United States, applicable to agreements made and to be
performed wholly within those jurisdictions.
This prospectus supplement and the accompanying prospectus may be used only
for the purposes for which they were published. This prospectus supplement and
the accompanying prospectus together represent an offer to sell the notes but
only under circumstances and in jurisdictions where it is lawful to do so.
We will identify in the applicable pricing supplement whether the notes
have been accepted for clearance through the Depositary, Euroclear and
Clearstream systems. The CUSIP, Common Code, the International Securities
Identification Number (ISIN) or the identification number for any other relevant
clearing system for each series of notes will be set out in the relevant pricing
supplement.
We have undertaken, in connection with the listing of the notes, that if,
while notes are outstanding and listed on the Luxembourg Stock Exchange, there
shall occur any adverse change in our business or financial position that is
material in the context of the issuance of the notes which is not reflected in
this prospectus supplement (or any of the documents incorporated by reference in
this prospectus supplement) and if so required by the Luxembourg Stock Exchange,
we will prepare or procure the preparation of an amendment or supplement of this
prospectus supplement or, as the case may be, publish a new prospectus
supplement for use in connection with any subsequent offering by us of notes to
be listed on the Luxembourg Stock Exchange. Because the prospectus supplement
supersedes the attached prospectus to the extent that they are inconsistent, we
undertake to revise the attached prospectus only where changes in our business
or financial condition cannot be addressed through amendments to this prospectus
supplement.
S-47
FORM OF APPLICABLE PRICING SUPPLEMENT
Set out below is substantially the form of pricing supplement to be
completed for each series of notes listed on the Luxembourg Stock Exchange and
offered and sold pursuant to this prospectus supplement and the accompanying
prospectus. The notes may be issued in one or more series as we may authorize
from time to time. Prospective investors should refer to this prospectus
supplement and the accompanying prospectus for a description of the specific
terms and conditions of the particular series of notes.
Rule 424(b)(2)
Registration Statement No. 333-119172
CUSIP/Common Code/ISIN:
PRICING SUPPLEMENT NO. [____________]
Dated [___________] to
Prospectus, dated October 28, 2004 and
Prospectus Supplement, dated October 29, 2004
CIT GROUP INC.
GLOBAL MEDIUM-TERM [FIXED] [FLOATING] RATE NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(________) Senior Note (________) Senior Subordinated Note
Principal Amount: [________]%
Proceeds to Corporation: [________]% or $[__________].
Discounts and Commissions: [________]% or $[__________].
Issue Price: [_____________].
Original Issue Date: [_____________].
Maturity Date: [_____________].
Interest Rate Basis (if floating rate note): [_____________].
Index Maturity (if floating rate note): [_____________].
Spread (if floating rate note): [_____________].
Interest Rate Calculation (if floating rate note): [_____________].
Interest Rate (if fixed rate note): [_____________].
Initial Interest Rate (if floating rate note): [_____________].
Specified Currency: [_____________].
It is expected that the Notes will be ready for delivery in book-entry form on
or about [_____________, ____].
S-48
[Names of Agents]
Form: Global Note.
Interest Reset Date (if floating rate note): [_____________].
Rate Cut-Off Date (if floating rate note): [_____________].
Interest Payment Dates: [_____________].
Accrual of Interest: [_____________].
Interest Determination Date (if floating rate note): [_____________].
Calculation Date (if floating rate note): [_____________].
Maximum Interest Rate (if floating rate note): Maximum Rate permitted by New
York law.
Minimum Interest Rate (if floating rate note): 0.0%.
Calculation Agent (if floating rate note): [_____________].
Exchange Listing: [_____________].
Other Provisions: [_____________].
Trustee, Registrar, Authenticating and Paying Agent: [_____________].
Agents: [_____________].
Additional Paying Agents: [_____________].
CUSIP: [_____________].
Common Code: [_____________].
ISIN: [_____________].
Depositaries: [_____________].
Responsibility
We accept responsibility for the information contained in this pricing
supplement.
Signed on behalf of CIT Group Inc.:
By:
------------------------------------
Duly Authorized
S-49
Registered Office of the Issuer
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
Auditors of the Issuer
PricewaterhouseCoopers LLP
PricewaterhouseCoopers Center
300 Madison Avenue
New York, New York 10017
Trustee, Paying Agent and Registrar
J.P. Morgan Trust Company, National Association
1999 Avenue of the Stars
26th Floor
Los Angeles, California 90067
London Paying Agent
J.P. Morgan Chase Bank
Crosby Court
38 Bishopsgate
London EC2N 4AJ
Legal Advisers
To the Issuer: To the Agents as to United States law:
Robert J. Ingato, Esq. Wilmer Cutler Pickering Hale and Dorr LLP
1 CIT Drive 2445 M Street, N.W.
Livingston, New Jersey 07039 Washington, D.C. 20037
To the Issuer as to United States law and United States tax law:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Luxembourg Listing Agent, Luxembourg Paying Agent, and Luxembourg Transfer Agent
BNP PARIBAS SECURITIES SERVICES, LUXEMBOURG BRANCH
23, Avenue de la Porte Neuve
L-2085, Luxembourg
================================================================================
********************************************************************************
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities in any state where the offer and sale is not permitted.
********************************************************************************
================================================================================
PROSPECTUS
[CIT Group Inc. LOGO]
$15,000,000,000
Common Stock
Preferred Stock
Depositary Shares
Senior Debt Securities
Subordinated Debt Securities
Warrants
Stock Purchase Contracts
Stock Purchase Units
----------
The securities covered by this prospectus may be sold from time to time by
CIT Group Inc. We may offer the securities independently or together in any
combination, called "units," for sale directly to purchasers or through
underwriters, dealers or agents to be designated at a future date.
We will provide the specific terms and prices of these securities in
supplements to this prospectus. The prospectus supplements may also add to,
update or change information contained in this prospectus. This prospectus may
not be used to offer or sell any securities unless accompanied by a prospectus
supplement. You should read this prospectus and the applicable prospectus
supplement carefully before you invest in the securities.
Our common stock is listed on the New York Stock Exchange under the symbol
"CIT."
----------
We may sell securities to or through underwriters, dealers or agents. For
additional information on the method of sale, you should refer to the section
entitled "Plan of Distribution." The names of any underwriters, dealers or
agents involved in the sale of any securities and the specific manner in which
they may be offered will be set forth in the prospectus supplement covering the
sale of those securities.
----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS OCTOBER 28, 2004.
TABLE OF CONTENTS
Page
----
About this Prospectus.........................................................3
Where You Can Find More Information...........................................4
Forward-Looking Statements....................................................5
Prospectus Summary............................................................6
Use of Proceeds...............................................................7
Description of Debt Securities................................................8
Description of Capital Stock.................................................18
Description of Depositary Shares.............................................19
Description of Warrants......................................................22
Description of Stock Purchase Contracts and Stock Purchase Units.............23
Plan of Distribution.........................................................24
Legal Matters................................................................25
Experts......................................................................26
2
ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and may be
changed. You should rely only on the information provided in or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of any securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front cover of
those documents and that any information we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by
reference or such other date referred to in such document, regardless of the
time of delivery of this prospectus or any sale or issuance of a security.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC") using a "shelf" registration
process. Under this shelf registration process, we may sell or issue, in one or
more offerings up to a total amount of $15,000,000,000 of our:
o common stock;
o preferred stock;
o depositary shares;
o debt securities, in one or more series, which may be senior debt
securities or subordinated debt securities;
o warrants;
o stock purchase contracts;
o stock purchase units; and
o units consisting of any combination of these securities.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell or issue securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that specific offering of securities and the specific manner in which they may
be offered. The prospectus supplement may also add to, update or change any of
the information contained in this prospectus. The prospectus supplement may also
contain information about any material federal income tax considerations
relating to the securities described in the prospectus supplement. You should
read both this prospectus and the applicable prospectus supplement together with
the additional information described under "Where You Can Find More
Information." This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
This prospectus contains summaries of provisions of certain documents that
are described herein, but reference is made to the actual documents for complete
information. All of the summaries are qualified in their entirety by the actual
documents. Copies of some of the documents referred to herein have been filed or
will be filed or incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those
documents as described below under "Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC web site (www.sec.gov) or at the SEC offices mentioned
under the heading "Where You Can Find More Information."
3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Such information may also be inspected
at The New York Stock Exchange, 20 Broad Street, New York, New York 10005. You
can also find information about us by visiting our website at www.cit.com. We
have included our web site address as an inactive textual reference only.
Information on our web site is not incorporated by reference into and does not
form a part of this prospectus.
The SEC allows us to incorporate by reference into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents that have been filed with
the SEC. The information incorporated by reference is considered to be part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede the previously filed information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), other than any portions
of the respective filings that were furnished, under applicable SEC rules,
rather than filed, until we complete our offerings of the securities registered
under this registration statement:
o our Annual Report on Form 10-K for the year ended December 31, 2003;
o our Definitive Proxy Statement filed with the SEC on April 5, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2004;
o our Current Reports on Form 8-K filed with the SEC on January 22,
2004, April 22, 2004, July 22, 2004, August 17, 2004, September 9,
2004, September 14, 2004, September 21, 2004 and October 21, 2004;
and
o the description of our common stock contained in Form 8-A filed on
June 26, 2002, and any amendment or report filed under the Exchange
Act for the purpose of updating such description.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address or phone number:
Glenn Votek
Executive Vice President and Treasurer
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
(973) 740-5000
4
FORWARD-LOOKING STATEMENTS
This prospectus, prospectus supplements to this prospectus, the documents
incorporated by reference in this prospectus and other written reports and oral
statements made from time to time by the company may contain "forward-looking
statements" within the meaning of the Securities Litigation Reform Act of 1995.
Forward-looking statements relate to expectations or forecasts of future events.
They use words such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "project," "intend," "plan," "potential," "will," and other words
and terms of similar meaning in connection with a discussion of potential future
events, circumstances or future operating or financial performance. You can also
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts. Any forward-looking statements contained in this
prospectus, prospectus supplements to this prospectus and the documents
incorporated by reference in this prospectus are subject to unknown risks,
uncertainties and contingencies. Forward-looking statements are included, for
example, in the discussions about:
o our liquidity risk management;
o our credit risk management;
o our funding, borrowing costs and net finance margin;
o our capital, leverage and credit ratings;
o our operational and legal risks;
o our commitments to extend credit or purchase equipment; and
o how we may be affected by legal proceedings.
All forward-looking statements involve risks and uncertainties, many of
which are beyond our control, which may cause actual results, performance or
achievements to differ materially from anticipated results, performance or
achievements. Also, forward-looking statements are based upon management's
estimates of fair values and of future costs, using currently available
information. Therefore, actual results may differ materially from those
expressed or implied in those statements. Factors that could cause such
differences include, but are not limited to:
o risks of economic slowdown, downturn or recession;
o industry cycles and trends;
o risks inherent in changes in market interest rates and quality
spreads;
o funding opportunities and borrowing costs;
o changes in funding markets, including commercial paper, term debt and
the asset-backed securitization markets;
o uncertainties associated with risk management, including credit
prepayment, asset/liability, interest rate and currency risks;
o adequacy of reserves for credit losses;
o risks associated with the value and recoverability of leased equipment
and lease residual values;
o changes in laws or regulations governing our business and operations;
o changes in competitive factors; and
o future acquisitions and dispositions of businesses or asset
portfolios.
Any or all of our forward-looking statements here or in other publications
may turn out to be wrong, and there are no guarantees about the performance of
the company. The company does not assume the obligation to update any
forward-looking statement for any reason.
5
--------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus.
Because this is a summary, it may not contain all the information that is
important to you. You should read the entire prospectus and the applicable
prospectus supplement, including the information incorporated by reference,
before making an investment decision. As used in this prospectus, the terms "CIT
Group Inc.," "CIT Group," "we," "us," "our" and "the company" refer to CIT Group
Inc., unless the context clearly indicates otherwise.
CIT Group Inc.
CIT Group Inc., a Delaware corporation, is a leading global commercial and
consumer finance company. Founded in 1908, we provide financing and leasing
capital for companies in a wide variety of industries, including many of today's
leading industries and emerging businesses. We offer factoring and vendor,
equipment, commercial, consumer and structured financing products.
We have broad access to customers and markets through our "franchise"
businesses. Each business focuses on specific industries, asset types and
markets, with portfolios diversified by client, industry and geography. Managed
assets were $49.9 billion, owned financing and leasing assets were $41.5 billion
and stockholders' equity was $5.7 billion at June 30, 2004.
We provide a wide range of financing and leasing products to small, midsize
and larger companies across a wide variety of industries, including
manufacturing, retailing, transportation, aerospace, construction, technology,
communication, and various service-related industries. Our secured lending,
leasing and factoring products include direct loans and leases, operating
leases, leveraged and single investor leases, secured revolving lines of credit
and term loans, credit protection, accounts receivable collection, import and
export financing, debtor-in-possession and turnaround financing, and acquisition
and expansion financing. Consumer lending, conducted in our Specialty Finance
segment, consists primarily of home equity lending to consumers originated
largely through a network of brokers and correspondents.
Transactions are generated through direct calling efforts with borrowers,
lessees, equipment end-users, vendors, manufacturers and distributors and
through referral sources and other intermediaries. In addition, our strategic
business units work together in referring transactions to other CIT units to
best meet our customers' overall financing needs. We also buy and sell
participations in and syndications of finance receivables and/or lines of
credit. From time to time, in the normal course of business, we purchase finance
receivables on a wholesale basis to supplement our origination volume and sell
certain finance receivables and equipment under operating leases to reduce
concentrations, for other balance sheet management purposes, or to improve
profitability.
----------
Our principal executive offices are located at 1 CIT Drive, Livingston, New
Jersey 07039. Our telephone number is (973) 740-5000.
--------------------------------------------------------------------------------
6
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, we
currently intend to use the net proceeds from any sale of the offered securities
to provide additional working funds for us and our subsidiaries. Generally, we
use the proceeds from sales of our securities primarily to originate and
purchase receivables in the ordinary course of our business. We have not yet
determined the amounts that we may use in connection with our business or that
we may furnish to our subsidiaries. From time to time, we may also use the
proceeds to finance the bulk purchase of receivables and/or the acquisition of
other finance-related businesses.
7
DESCRIPTION OF DEBT SECURITIES
This section contains a description of the general terms and provisions of
the debt securities that may be offered by this prospectus and to which any
prospectus supplement may relate. The particular terms of the debt securities
offered will be described in the applicable prospectus supplement. The
prospectus supplement relating to a series of debt securities being offered
pursuant to this prospectus will be attached to this prospectus.
We may issue senior debt securities and subordinated debt securities. The
senior debt securities are to be issued under an indenture (the "senior
indenture") to be entered into between us and J.P. Morgan Trust Company,
National Association, as trustee, the form of which is filed as an exhibit to
the registration statement of which this prospectus forms a part. The
subordinated debt securities are to be issued under an indenture (the
"subordinated indenture") to be entered into between us and J.P. Morgan Trust
Company, National Association, as trustee, the form of which is filed as an
exhibit to the registration statement of which this prospectus forms a part. The
senior indenture and the subordinated indenture are sometimes referred to in
this prospectus collectively as the "indentures" and each individually as an
"indenture." The indentures may be supplemented from time to time.
This prospectus briefly outlines some of the indenture provisions. The
following summary of the material provisions of the indentures is qualified in
its entirety by the provisions of the indentures, including definitions of
certain terms used in the indentures. Wherever we refer to particular sections
or defined terms of the indentures, those sections or defined terms are
incorporated in this prospectus and the applicable prospectus supplement by
reference. You should review the indentures that are filed as exhibits to the
registration statement for additional information.
In addition, the material specific financial, legal and other terms as well
as federal income tax consequences particular to securities of each series will
be described in the prospectus supplement relating to the securities of that
series. The prospectus supplement may or may not modify the general terms found
in this prospectus and will be filed with the SEC. For a complete description of
the terms of a particular series of debt securities, you should read both this
prospectus and the prospectus supplement relating to that particular series.
General
The indenture provisions do not limit the amount of debt that we may issue
under the indentures or otherwise, and we may issue the securities in one or
more series with the same or various maturities, at par or a premium, or with
original issue discount.
Unless otherwise specified in the prospectus supplement, the debt
securities covered by this prospectus will be our direct unsecured obligations.
Senior debt securities will rank equally with our other unsecured and
unsubordinated indebtedness. Subordinated debt securities will be unsecured and
subordinated in right of payment to the prior payment in full of all of our
unsecured and senior indebtedness. See "--Subordination" below. Any of our
secured indebtedness will rank ahead of the debt securities to the extent of the
assets securing such indebtedness.
We conduct operations primarily through our subsidiaries and substantially
all of our consolidated assets are held by our subsidiaries. Accordingly, our
cash flow and our ability to meet our obligations under the debt securities will
be largely dependent on the earnings of our subsidiaries and the distribution or
other payment of these earnings to us in the form of dividends, loans or
advances and repayment of loans and advances from us. Our subsidiaries are
separate and distinct legal entities and have no obligation to pay the amounts
that will be due on our debt securities or to make any funds available for
payment of amounts that will be due on our debt securities. Because we are a
holding company, our obligations under our debt securities will be effectively
subordinated to all existing and future liabilities of our subsidiaries.
Therefore, our rights, and the rights of our creditors, including the rights of
the holders of the debt securities to participate in any distribution of assets
of any of our subsidiaries, if such subsidiary were to be liquidated or
reorganized, are subject to the prior claims of the subsidiary's creditors. To
the extent that we may be a creditor with recognized claims against our
subsidiaries, our claims will still be effectively subordinated to any security
interest in, or mortgages or other liens on, the assets of the subsidiary that
are senior to us.
8
The prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include, among other terms, some or all of the following, as applicable:
o the title and series of such debt securities, which may include
medium-term notes;
o the total principal amount of the series of debt securities and
whether there shall be any limit upon the aggregate principal amount
of such debt securities;
o the date or dates, or the method or methods, if any, by which such
date or dates will be determined, on which the principal of the debt
securities will be payable;
o the rate or rates at which such debt securities will bear interest, if
any, which rate may be zero in the case of certain debt securities
issued at an issue price representing a discount from the principal
amount payable at maturity, or the method by which such rate or rates
will be determined (including, if applicable, any remarketing option
or similar method), and the date or dates from which such interest, if
any, will accrue or the method by which such date or dates will be
determined;
o the date or dates on which interest, if any, on such debt securities
will be payable and any regular record dates applicable to the date or
dates on which interest will be so payable;
o the place or places where the principal of or any premium or interest
on such debt securities will be payable, where any of such debt
securities that are issued in registered form may be surrendered for
registration of or transfer or exchange, and where any such debt
securities may be surrendered for conversion or exchange;
o if such debt securities are to be redeemable at our option, the date
or dates on which, the period or periods within which, the price or
prices at which and the other terms and conditions upon which such
debt securities may be redeemed, in whole or in part, at our option;
o provisions specifying whether we will be obligated to redeem or
purchase any of such debt securities pursuant to any sinking fund or
analogous provision or at the option of any holder of such debt
securities and, if so, the date or dates on which, the period or
periods within which, the price or prices at which and the other terms
and conditions upon which such debt securities will be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such debt securities so redeemed or
purchased;
o if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities to be issued
in registered form will be issuable and, if other than a denomination
of $5,000, the denominations in which any debt securities to be issued
in bearer form will be issuable;
o provisions specifying whether the debt securities will be convertible
into other securities of CIT and/or exchangeable for securities of CIT
or other issuers and, if so, the terms and conditions upon which such
debt securities will be so convertible or exchangeable;
o if other than the principal amount, the portion of the principal
amount (or the method by which such portion will be determined) of
such debt securities that will be payable upon declaration of
acceleration of the maturity thereof;
o if other than U.S. dollars, the currency of payment, including
composite currencies, of the principal of, and any premium or interest
on any of such debt securities;
o provisions specifying whether the principal of, and any premium or
interest on such debt securities will be payable, at the election of
CIT or a holder of debt securities, in a currency other than that in
which such debt securities are stated to be payable and the date or
dates on which, the period or periods within which, and the other
terms and conditions upon which, such election may be made;
o any index, formula or other method used to determine the amount of
payments of principal of, any premium or interest on such debt
securities;
o provisions specifying whether such debt securities are to be issued in
the form of one or more global securities and, if so, the identity of
the depositary for such global security or securities;
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o provisions specifying whether such debt securities are senior debt
securities or subordinated debt securities and, if subordinated debt
securities, the specific subordination provisions applicable thereto;
o in the case of subordinated debt securities, provisions specifying the
relative degree, if any, to which such subordinated debt securities of
the series will be senior to or be subordinated in right of payment to
other series of subordinated debt securities or other indebtedness of
CIT, as the case may be, whether such other series of subordinated
debt securities or other indebtedness is outstanding or not;
o any deletions from, modifications of or additions to the events of
default or covenants of CIT with respect to such debt securities;
o terms specifying whether the provisions described below under
"--Discharge; Defeasance and Covenant Defeasance" will be applicable
to such debt securities;
o terms specifying whether any of such debt securities are to be issued
upon the exercise of warrants, and the time, manner and place for such
debt securities to be authenticated and delivered; and
o any other terms of such debt securities and any other deletions from
or modifications or additions to the applicable indenture in respect
of such debt securities.
We will have the ability under the indentures to "reopen" a previously
issued series of debt securities and issue additional debt securities of that
series or establish additional terms of that series. We also are permitted to
issue debt securities with the same terms as previously issued debt securities.
We may in the future issue debt securities other than the debt securities
described in this prospectus. There is no requirement that any other debt
securities that we issue be issued under the indentures described in this
prospectus. Thus, any other debt securities that we may issue may be issued
under other indentures or documentation containing provisions different from
those included in the indentures or applicable to one or more issues of the debt
securities described in this prospectus.
Negative Pledge
The indentures do not limit the amount of other securities that we or our
subsidiaries may issue. However, an indenture provision, which we refer to in
this prospectus as the "Negative Pledge," provides that we will not pledge or
otherwise subject any of our property or assets to any lien to secure
indebtedness for money borrowed that is incurred, issued, assumed or guaranteed
by us, subject to certain exceptions.
The terms of the Negative Pledge do nevertheless permit us to create:
o liens in favor of any of our subsidiaries;
o purchase money liens;
o liens existing at the time of any acquisition that we may make;
o liens in favor of the United States, any state or governmental agency
or department to secure obligations under contracts or statutes;
o liens securing the performance of letters of credit, bids, tenders,
sales contracts, purchase agreements, repurchase agreements, reverse
repurchase agreements, bankers' acceptances, leases, surety and
performance bonds and other similar obligations incurred in the
ordinary course of business;
o liens upon any real property acquired or constructed by us primarily
for use in the conduct of our business;
o arrangements providing for our leasing of assets, which we have sold
or transferred with the intention that we will lease back these
assets, if the lease obligations would not be included as liabilities
on our consolidated balance sheet;
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o liens to secure non-recourse debt in connection with our leveraged or
single-investor or other lease transactions;
o consensual liens created in our ordinary course of business that
secure indebtedness that would not be included in total liabilities as
shown on our consolidated balance sheet;
o liens created by us in connection with any transaction that we intend
to be a sale of our property or assets;
o liens on property or assets financed through tax-exempt municipal
obligations;
o liens arising out of any extension, renewal or replacement, in whole
or in part, of any financing permitted under the Negative Pledge, so
long as the lien extends only to the property or assets, with
improvements, that originally secured the lien; and
o liens that secure certain other indebtedness which, in an aggregate
principal amount then outstanding, does not exceed 10% of our
consolidated net worth.
In addition, under the indenture pursuant to which any of our senior
subordinated debt is issued, we have agreed not to permit:
o the aggregate amount of senior subordinated indebtedness outstanding
at any time to exceed 100% of the aggregate amount of the par value of
our capital stock plus our consolidated surplus (including retained
earnings); or
o the aggregate amount of senior subordinated indebtedness and junior
subordinated indebtedness outstanding at any time to exceed 150% of
the aggregate amount of the par value of the capital stock plus our
consolidated surplus (including retained earnings).
Under the more restrictive of these tests, as of June 30, 2004, we could
issue up to approximately $5.7 billion of additional senior subordinated
indebtedness.
Consolidation, Merger or Sale
Subject to the provisions of the Negative Pledge described above, we will
not be prevented from consolidating or merging with any other person or selling
our assets as, or substantially as, an entirety. However, we have agreed not to
consolidate with or merge into any other person or convey or transfer or lease
substantially all of our properties and assets to any person, unless, among
other things:
o the successor entity (if other than the company) expressly assumes by
a supplemental indenture the due and punctual payment of the principal
of, and any premium and any interest on, all the debt securities then
outstanding and the performance and observance of every covenant in
the indenture that we would otherwise have to perform as if it were an
original party to the indenture; and
o the person to which our properties and assets are sold expressly
assumes, as a part of the purchase price, by a supplemental indenture
the due and punctual payment of the principal of, and any premium and
any interest on, all the debt securities then outstanding and the
performance and observance of every covenant in the indenture that we
would otherwise have to perform as if it were an original party to the
indenture.
The successor entity or purchaser of our properties and assets, as
applicable, will assume all our obligations under the indentures as if it were
an original party to such indentures. After assuming the obligations, the
successor entity will have all our rights and powers under such indentures.
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Events of Default
An "event of default" means any one of the following events that occurs
with respect to a series of debt securities issued under the indenture:
o we fail to pay interest on any debt security of such series for 30
days after payment was due;
o we fail to make the principal or any premium payment on any debt
security of such series when due;
o we fail to make any sinking fund payment or analogous obligation when
due in respect of any debt securities of such series;
o we fail to perform any other covenant in the indenture and this
failure continues for 30 days after we receive written notice of it
(other than any failure to perform in respect of a covenant included
in the indenture solely for the benefit of another series of debt
securities);
o any event of default shall have occurred in respect of our
indebtedness (including guaranteed indebtedness but excluding any
subordinated indebtedness), and, as a result, an aggregate principal
amount exceeding $25.0 million of such indebtedness is accelerated
prior to its scheduled maturity and such acceleration is not
rescinded or annulled within 30 days after we receive written
notice; or
o we or a court take certain actions relating to the bankruptcy,
insolvency or reorganization of our company.
A supplemental indenture or the form of security for a particular series of
debt securities may include additional events of default or changes to the
events of default described above. The events of default applicable to a
particular series of debt securities will be discussed in the prospectus
supplement relating to such series. Other than as specified above, a default
under our other indebtedness will not be a default under the indenture for the
debt securities covered by this prospectus, and a default under one series of
debt securities will not necessarily be a default under another series.
If an event of default with respect to outstanding debt securities of any
series occurs and is continuing, then the trustee or the holders of at least 25%
in principal amount of outstanding debt securities of that series may declare,
in a written notice, the principal amount (or specified amount) on all debt
securities of that series to be immediately due and payable. In the case of
certain events of bankruptcy or insolvency of CIT, all unpaid principal amount
(or specified amount) of and all accrued and unpaid interest on the outstanding
debt securities of such series shall automatically become immediately due
and payable.
The trustee may withhold notice to the holders of our debt securities of
any default (except for defaults that involve our failure to pay principal of,
premium, if any or interest, if any, or any sinking fund payment, if applicable,
on any series of debt securities) if the trustee considers that withholding
notice is in the interests of the holders of that series of debt securities.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, the holders of a majority in principal
amount (or specified amount) of the outstanding debt securities of that series,
by written notice to us and the trustee, may rescind and annul such declaration
and its consequences if:
o we have paid or deposited with the trustee a sum sufficient to pay
overdue interest and overdue principal other than the accelerated
interest and principal; and
o we have cured or the holders have waived all events of default, other
than the non-payment of accelerated principal and interest with
respect to debt securities of that series, as provided in the
indenture.
We refer you to the prospectus supplement relating to any series of debt
securities that are discount securities for the particular provisions relating
to acceleration of a portion of the principal amount of the discount securities
upon the occurrence of an event of default.
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If a default in the performance or breach, of an indenture shall have
occurred and be continuing, the holders of not less than a majority in principal
amount of the outstanding securities of all series, by notice to the trustee,
may waive any past event of default or its consequences under the applicable
indenture. However, an event of default cannot be waived with respect to any
series of securities in the following two circumstances:
o a failure to pay the principal of, and premium, if any, or interest
on, any security; or
o a covenant or provision that cannot be modified or amended without the
consent of each holder of outstanding securities of that series.
Other than its duties in case of a default, the trustee is not obligated to
exercise any of its rights or powers under an indenture at the request, order or
direction of any holders, unless the holders offer the trustee reasonable
indemnity. If they provide this reasonable indemnity, the holders of a majority
in principal amount outstanding of any series of debt securities may, subject to
certain limitations, direct the time, method and place of conducting any
proceeding or any remedy available to the trustee, or exercising any power
conferred upon the trustee, for any series of debt securities.
We are required to deliver to the trustee an annual statement as to our
fulfillment of all of our obligations under each existing indenture.
Modification of Indenture
The indenture provisions permit us and the trustee to amend, modify or
supplement an indenture and any supplemental indenture under which a series of
debt securities is issued. Generally, these changes require the consent of the
holders of at least 66 2/3% of the outstanding principal amount of each series
of debt securities affected by the change.
However, no modification of the maturity date or principal or interest
payment terms, no modification of the currency for payment, no impairment of the
right to sue for the enforcement of payment at the maturity of the debt
security, no modification of any conversion rights and no modification reducing
the percentage required for modifications or modifying the foregoing
requirements or reducing the percentage required to waive certain specified
covenants is effective against any holder without its consent. In addition, no
supplemental indenture shall adversely affect the rights of any holder of senior
indebtedness with respect to subordination without the consent of such holder.
In computing whether the holders of the requisite principal amount of
outstanding debt securities have taken action under an indenture or supplemental
indenture:
o for an original issue discount security, we will use the amount of the
principal that would be due and payable as of that date, as if the
maturity of the debt had been accelerated due to a default; and
o for a debt security denominated in a foreign currency or currencies,
we will use the U.S. dollar equivalent of the outstanding principal
amount as of that date, using the exchange rate in effect on the date
of original issuance of the debt security.
Subordination
The extent to which a particular series of subordinated debt securities may
be subordinated to our unsecured and unsubordinated indebtedness will be set
forth in the prospectus supplement for any such series and any indenture may be
modified by a supplemental indenture to reflect such subordination provisions.
Payment and Transfer
Unless otherwise specified in the related prospectus supplement, we will
pay principal, interest and any premium on fully registered securities at the
place or places designated by us for such purposes. We will make
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payment to the persons in whose names the debt securities are registered on the
close of business on the day or days specified by us. Any other payments will be
made as set forth in the applicable prospectus supplement.
All paying agents initially designated by us with respect to payments on
the debt securities will be named in the related prospectus supplement. We may
at any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts, except that we will be required to maintain a paying agent in each place
where the principal of and any premium or interest on any debt securities are
payable.
Unless otherwise provided in the related prospectus supplement, holders may
transfer or exchange debt securities at the corporate trust office of the
trustee or at any other office or agency maintained by us for such purposes. We
will not charge a service fee for any transfer or exchange of certificated
securities, but we may require payment of a sum sufficient to cover any stamp
tax or other governmental charge and any other reasonable expenses (including
fees and expenses of the trustee) that we are required to pay in connection
with a transfer or exchange.
You may effect the transfer of certificated securities and the right to
receive the principal, premium and interest on certificated securities only by
surrendering the certificate representing those certificated securities and
either reissuance by us or the trustee of the certificate to the new holder or
the issuance by us or the trustee of a new certificate to the new holder.
We are not required to:
o register the transfer of or exchange securities of any series during a
period beginning at the opening of business 15 days before the day we
transmit a notice of redemption of securities of the series selected
for redemption and ending at the close of business on the day of the
transmission; or
o register the transfer of or exchange any security so selected for
redemption in whole or in part, except the unredeemed portion of any
security being redeemed in part.
All transfer agents initially designated by us will be named in the related
prospectus supplement. We may at any time rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that we will be required to maintain a transfer agent in each
place where the principal of and any premium or interest on any debt securities
are payable.
We have initially appointed the trustee as security registrar, transfer
agent and paying agent for the debt securities.
Global Securities
We may issue the global securities in either registered or bearer form, in
either temporary or permanent form. Where any debt securities of any series are
issued in bearer form, the restrictions and considerations applicable to such
debt securities and with respect to the payment, transfer and exchange of such
debt securities will be described in the related prospectus supplement. Debt
securities that are represented in whole or in part by one or more global
securities will be registered in the name of a depositary or its nominee
identified in the applicable prospectus supplement, and such global securities
will be deposited with, or on behalf of, the depositary. The applicable
prospectus supplement will describe the specific terms of the depositary
arrangement with respect to the applicable securities of that series. We
anticipate that the following provisions will apply to all depositary
arrangements.
Once a global security is issued, the depositary will credit on its
book-entry system the respective principal amounts of the individual securities
represented by that global security to the accounts of institutions that have
accounts with the depositary. These institutions are known as participants. The
underwriters for the securities will designate the accounts to be credited.
However, if we have offered or sold the securities either directly or through
agents, we or the agents will designate the appropriate accounts to be credited.
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Ownership of beneficial interest in a global security will be limited to
participants or persons that may hold beneficial interests through participants.
Ownership of beneficial interest in a global security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the depositary's participants or persons that hold through participants. The
laws of some states require that certain purchasers of securities take physical
delivery of securities. Such limits and such laws may limit the market for
beneficial interests in a global security.
So long as the depositary for a global security, or its nominee, is the
registered owner of a global security, the depositary or nominee will be
considered the sole owner or holder of the securities represented by the global
security for all purposes under the indenture. Except as provided in the
applicable prospectus supplement, owners of beneficial interests in a global
security:
o will not be entitled to have securities represented by global
securities registered in their names;
o will not receive or be entitled to receive physical delivery of
securities in definitive form; and
o will not be considered owners or holders of these securities under the
indenture.
Payments of principal, any premium and interest on the individual
securities registered in the name of the depositary or its nominee will be made
to the depositary or its nominee as the holder of that global security. Neither
we nor the trustee will have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests of a global security, or for maintaining, supervising or reviewing any
records relating to beneficial ownership interests, and each of us and the
trustee may act or refrain from acting without liability on any information
provided by the depositary.
We expect that the depositary, after receiving any payment of principal,
any premium or interest in respect of a global security, will immediately credit
the accounts of the participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in a global
security as shown on the records of the depositary. We also expect that payments
by participants to owners of beneficial interests in a global security will be
governed by standing customer 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 such
participants.
Debt securities represented by a global security will be exchangeable for
debt securities in definitive form of like tenor in authorized denominations
only if the depositary notifies us that it is unwilling or unable to continue as
the depositary and a successor depositary is not appointed by us within 90 days
or we, in our discretion, determine not to require all of the debt securities of
a series to be represented by a global security and notify the trustee of our
decision.
Discharge; Defeasance and Covenant Defeasance
We may discharge certain obligations to the holders of any debt securities
of any series that have not already been delivered to the trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) if we
deposit with the trustee, in trust, funds in the currency in which such debt
securities are payable in an amount sufficient to pay the entire indebtedness on
such debt securities with respect to principal and any premium and interest to
the date of such deposit (if such debt securities have then become due and
payable) or to the maturity date of such debt securities, as the case may be.
We also may, at our option, elect to:
o discharge any and all of our obligations with respect to the debt
securities of such series, except for, among other things, our
obligation to register the transfer of or exchange such debt
securities and to maintain an office or agency with respect to such
debt securities (which we refer to in this prospectus as
"defeasance"); or
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o release ourselves from our obligation to comply with certain
restrictive covenants under the indenture, and to provide that any
failure to comply with such obligations shall not constitute a default
or an event of default with respect to such series of debt securities
(which we refer to in this prospectus as "covenant defeasance").
Defeasance or covenant defeasance, as the case may be, shall be conditioned
upon the irrevocable deposit by us with the trustee, in trust, of an amount in
U.S. dollars or in the foreign currency in which such debt securities are
payable at stated maturity, or government obligations, or both, applicable to
such debt securities which, through the scheduled payment of principal and
interest in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such debt
securities on the scheduled due dates.
Such trust may only be established if, among other things:
o the applicable defeasance or covenant defeasance does not result in a
breach or violation of, or constitute a default under, the applicable
indenture or any other material agreement or instrument to which we
are a party or by which we are bound;
o no event of default or event which with notice or lapse of time or
both would become and an event of default with respect to the debt
securities to be defeased shall have occurred and be continuing on the
date of establishment of such trust; and
o we shall have delivered to the trustee an opinion of counsel to the
effect that the deposit and related defeasance or covenant defeasance,
as the case may be, would not cause the holders of the securities to
recognize income, gain or loss for U.S. federal income tax purposes.
In the case of a defeasance, we must also deliver any ruling to such effect
received from or published by the United States Internal Revenue Service.
Concerning the Trustee
J.P. Morgan Trust Company, National Association, a national banking
association, will act as trustee under our senior indenture and our subordinated
indenture, as permitted by the terms thereof. At all times, the trustee must be
organized and doing business under the laws of the United States, any state
thereof or the District of Columbia, and must comply with all applicable
requirements under the Trust Indenture Act.
The trustee may resign at any time by giving us written notice or may be
removed:
o by act of the holders of a majority in principal amount of a series of
outstanding debt securities; or
o if it (i) fails to comply with the obligations imposed upon it under
the Trust Indenture Act; (ii) is not organized and doing business
under the laws of the United States, any state thereof or the District
of Columbia; (iii) becomes incapable of acting as trustee; or (iv) or
a court takes certain actions relating to bankruptcy, insolvency or
reorganization.
If the trustee resigns, is removed or becomes incapable of acting, or if a
vacancy occurs in the office of the trustee for any cause, we, by or pursuant to
a board resolution, will promptly appoint a successor trustee or trustees with
respect to the debt securities of such series. We will give written notice to
holders of the relevant series of debt securities, of each resignation and each
removal of the trustee with respect to the debt securities of such series and
each appointment of a successor trustee. Upon the appointment of any successor
trustee, we, the retiring trustee and such successor trustee, will execute and
deliver a supplemental indenture in which each successor Trustee will accept
such appointment and which will contain such provisions as necessary or
desirable to transfer to such successor trustee all the rights, powers, trusts
and duties of the retiring trustee with respect to the relevant series of debt
securities.
The trustee may be contacted at the following address: J.P. Morgan Trust
Company, National Association, 611 Woodward Ave. 11th Floor Detroit, Michigan
48226. The form of senior indenture and the form of
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subordinated indenture are filed as exhibits to this registration statement.
Holders of any series of debt securities may obtain an indenture or any other
documents relating to a series of debt securities by contacting us or the
trustee or by accessing the SEC's web site. See "Where You Can Find More
Information".
J.P. Morgan Trust Company, National Association and certain of its
affiliates have in the past and may in the future provide banking, investment
and other services to us. A trustee under a senior indenture or a senior
subordinated indenture may act as trustee under any of our other indentures.
New York Law to Govern
The indentures will be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made or instruments
entered into and, in each case, performed in that state.
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DESCRIPTION OF CAPITAL STOCK
This section contains a description of our capital stock. The following
summary of the terms of our capital stock is not meant to be complete and is
qualified by reference to our certificate of incorporation, as amended, and our
by-laws, as amended, which are incorporated by reference as exhibits into the
registration statement of which this prospectus is a part.
As of June 30, 2004, our authorized capital stock consisted of: (1)
600,000,000 shares of common stock, par value $0.01 per share, of which
212,092,592 were issued and 211,195,862 were outstanding, 896,730 were issued
and held in treasury; and (2) 100,000,000 shares of preferred stock, par value
$0.01 per share, none of which have been issued.
Common Stock
Each share of our common stock entitles the holder thereof to one vote on
all matters, including the election of directors, and, except as otherwise
required by law or provided in any resolution adopted by our board of directors
with respect to any series of preferred stock, the holders of the shares of
common stock will possess all voting power. Our certificate of incorporation
does not provide for cumulative voting in the election of directors. Generally,
all matters to be voted on by the stockholders must be approved by a majority,
or, in the case of the election of directors, by a plurality, of the votes cast,
subject to state law and any voting rights granted to any of the holders of
preferred stock. Notwithstanding the foregoing, approval of the following three
matters requires the vote of holders of 66 2/3% of our outstanding capital stock
entitled to vote in the election of directors: (1) amending, repealing or
adopting of by-laws by the stockholders; (2) removing directors (which is
permitted for cause only); and (3) amending, repealing or adopting any provision
that is inconsistent with certain provisions of our certificate of
incorporation. The holders of common stock do not have any preemptive rights.
There are no subscription, redemption, conversion or sinking fund provisions
with respect to the common stock.
Subject to any preferential rights of any outstanding series of preferred
stock that our board of directors may create, from time to time, the holders of
common stock will be entitled to dividends as may be declared from time to time
by the board of directors from funds available therefor. Upon liquidation of
CIT, subject to the rights of holders of any preferred stock outstanding, the
holders of common stock will be entitled to receive our assets remaining after
payment of liabilities proportionate to their pro rata ownership of the
outstanding shares of common stock.
Preferred Stock
Our board of directors has the authority, without further action of our
stockholders, to issue up to 100,000,000 shares of preferred stock, par value
$0.01 per share, in one or more series and to fix the powers, preferences,
rights and qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences and the number of shares constituting any series or the
designations of the series. The issuance of preferred stock could adversely
affect the holders of common stock. The potential issuance of preferred stock
may have the effect of discouraging, delaying or preventing a change of control
of CIT, may discourage bids for the common stock at a premium over market price
of the common stock and may adversely affect the market price of the common
stock. As of the date of this prospectus, we do not have any shares of preferred
stock outstanding, and we have no current plans to issue any shares of preferred
stock.
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DESCRIPTION OF DEPOSITARY SHARES
General
We may elect to offer fractional shares of preferred stock rather than full
shares of preferred stock. In that event, we will issue receipts for depositary
shares, and each of these depositary shares will represent a fraction (to be set
forth in the applicable prospectus supplement) of a share of a particular series
of preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us. The depositary will have its principal office in
the United States and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary
share will be entitled, in proportion to the applicable fraction of a share of
preferred stock underlying the depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those
rights may include dividend, voting, redemption, conversion and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued under
a deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock underlying the depositary
shares, in accordance with the terms of the offering. The following description
of the material terms of the deposit agreement, the depositary shares and the
depositary receipts is only a summary, and you should refer to the forms of the
deposit agreement and depositary receipts that will be filed with the SEC in
connection with the offering of the specific depositary shares for more complete
information.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts. Temporary depositary receipts
will then be exchangeable for definitive depositary receipts at our expense.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received with respect to the underlying stock to the record
holders of depositary shares in proportion to the number of depositary shares
owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
Withdrawal of Underlying Preferred Stock
Unless we say otherwise in a prospectus supplement, holders may surrender
depositary receipts at the principal office of the depositary and, upon payment
of any unpaid amount due to the depositary, be entitled to receive the number of
whole shares of underlying preferred stock and all money and other property
represented by the related depositary shares. We will not issue any partial
shares of preferred stock. If the holder delivers depositary receipts evidencing
a number of depositary shares that represent more than a whole number of shares
of preferred stock, the depositary will issue a new depositary receipt
evidencing the excess number of depositary shares to that holder.
Redemption of Depositary Shares
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in
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part, of that series of underlying stock held by the depositary. The redemption
price per depositary share will be equal to the applicable fraction of the
redemption price per share payable with respect to that series of underlying
stock. Whenever we redeem shares of underlying stock that are held by the
depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing the shares of underlying stock so
redeemed. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or proportionately or
by other equitable method, as may be determined by the depositary.
Voting
Upon receipt of notice of any meeting at which the holders of the
underlying stock are entitled to vote, the depositary will mail the information
contained in the notice to the record holders of the depositary shares
underlying the preferred stock. Each record holder of the depositary shares on
the record date (which will be the same date as the record date for the
underlying stock) will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the amount of the underlying stock
represented by that holder's depositary shares. The depositary will then try, as
far as practicable, to vote the number of shares of preferred stock underlying
those depositary shares in accordance with those instructions, and we will agree
to take all reasonable actions which may be deemed necessary by the depositary
to enable the depositary to do so. The depositary will not vote the underlying
shares to the extent it does not receive specific instructions with respect to
the depositary shares representing the preferred stock.
Conversion or Exchange of Preferred Stock
If the deposited preferred stock is convertible into or exchangeable for
other securities, the following will apply. The depositary shares, as such, will
not be convertible into or exchangeable for such other securities. Rather, any
holder of the depositary shares may surrender the related depositary receipts,
together with any amounts payable by the holder in connection with the
conversion or the exchange, to the depositary with written instructions to cause
conversion or exchange of the preferred stock represented by the depositary
shares into or for such other securities. If only some of the depositary shares
are to be converted or exchanged, a new depositary receipt or receipts will be
issued for any depositary shares not to be converted or exchanged.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit agreement may be
terminated by us upon not less than 60 days' notice whereupon the depositary
shall deliver or make available to each holder of depositary shares, upon
surrender of the depositary receipts held by such holder, the number of whole or
fractional shares of preferred stock represented by such receipts. The deposit
agreement will automatically terminate if (a) all outstanding depositary shares
have been redeemed or converted into or exchanged for any other securities into
or for which the underlying preferred stock are convertible or exchangeable or
(b) there has been a final distribution of the underlying stock in connection
with our liquidation, dissolution or winding up and the underlying stock has
been distributed to the holders of depositary receipts.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with its duties in accordance with the
deposit agreement. Holders of depositary receipts will pay transfer and other
taxes and governmental and other charges, including a fee for any permitted
withdrawal of shares of underlying stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for their accounts.
20
Reports
The depositary will forward to holders of depositary receipts all reports
and communications from us that we deliver to the depositary and that we are
required to furnish to the holders of the underlying stock.
Limitation on Liability
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or underlying stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting underlying stock
for deposit, holders of depositary receipts or other persons believed to be
competent and on documents believed to be genuine.
In the event the depositary receives conflicting claims, requests or
instructions from any holders of depositary shares, on the one hand, and us, on
the other, the depositary will act on our claims, requests or instructions.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering notice to us of its
election to resign. We may remove the depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of the appointment. The successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
21
DESCRIPTION OF WARRANTS
The following is a general description of the terms of the warrants we may
issue from time to time. This description is subject to the detailed provisions
of a warrant agreement to be entered into between us and a warrant agent we
select at the time of issue and the description in the prospectus supplement
relating to the applicable series of warrants.
General
We may issue warrants to purchase debt securities, preferred stock,
depositary shares, common stock or any combination thereof. Such warrants may be
issued independently or together with any such securities and may be attached or
separate from such securities. We may issue each series of warrants under a
separate warrant agreement to be entered into between a warrant agent and us.
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
warrants.
A prospectus supplement will describe the particular terms of any series of
warrants we may issue, including the following:
o the title of such warrants;
o the aggregate number of such warrants;
o the price or prices at which such warrants will be issued;
o the currency or currencies, including composite currencies, in which
the price of such warrants may be payable;
o the designation and terms of the securities purchasable upon exercise
of such warrants and the number of such securities issuable upon
exercise of such warrants;
o the price at which and the currency or currencies, including composite
currencies, in which the securities purchasable upon exercise of such
warrants may be purchased;
o the date on which the right to exercise such warrants shall commence
and the date on which such right will expire;
o whether such warrants will be issued in registered form or bearer
form;
o if applicable, the minimum or maximum amount of such warrants which
may be exercised at any one time;
o if applicable, the designation and terms of the securities with which
such warrants are issued and the number of such warrants issued with
each such security;
o if applicable, the date on and after which such warrants and the
related securities will be separately transferable;
o information with respect to book-entry procedures, if any;
o if applicable, a discussion of certain U.S. federal income tax
considerations; and
o any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
Amendments and Supplements to Warrant Agreement
We and the warrant agent may amend or supplement the warrant agreement for
a series of warrants without the consent of the holders of the warrants issued
thereunder to effect changes that are not inconsistent with the provisions of
the warrants and that do not materially and adversely affect the interests of
the holders of the warrants.
22
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The following is a general description of the terms of the stock purchase
contracts and stock purchase units we may issue from time to time.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid stock
purchase contracts. The description in the prospectus supplement will be
qualified in its entirety by reference to (1) the stock purchase contracts, (2)
the collateral arrangements and depositary arrangements, if applicable, relating
to such stock purchase contracts or stock purchase units and (3) if applicable,
the prepaid stock purchase contracts and the document pursuant to which such
prepaid stock purchase contracts will be issued.
Stock Purchase Contracts
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to holders, a fixed or
varying number of common stock, preferred stock or depositary shares at a future
date or dates. The consideration per share of common stock, preferred stock or
depositary shares may be fixed at the time that the stock purchase contracts are
issued or may be determined by reference to a specific formula set forth in the
stock purchase contracts. Any stock purchase contract may include anti-dilution
provisions to adjust the number of shares issuable pursuant to such stock
purchase contract upon the occurrence of certain events.
Stock Purchase Units
The stock purchase contracts may be issued separately or as a part of units
("stock purchase units"), consisting of a stock purchase contract and debt
securities, preferred securities or debt or equity obligations of third parties,
including U.S. Treasury securities, in each case securing holders' obligations
to purchase common stock, preferred stock or depositary shares under the stock
purchase contracts. The stock purchase contracts may require us to make periodic
payments to holders of the stock purchase units, or vice versa, and such
payments may be unsecured or prefunded and may be paid on a current or on a
deferred basis. The stock purchase contracts may require holders to secure their
obligations thereunder in a specified manner and in certain circumstances we may
deliver newly issued prepaid stock purchase contracts upon release to a holder
of any collateral securing such holder's obligations under the original stock
purchase contract. Any one or more of the above securities, common stock or the
stock purchase contracts or other collateral may be pledged as security for the
holders' obligations to purchase or sell, as the case may be, the common stock,
preferred stock or depositary shares under the stock purchase contracts. The
stock purchase contracts may also allow the holders, under certain
circumstances, to obtain the release of the security for their obligations under
such contracts by depositing with the collateral agent as substitute collateral
treasury securities with a principal amount at maturity equal to the collateral
so released or the maximum number of shares deliverable by such holders under
stock purchase contracts requiring the holders to sell common stock, preferred
stock or depositary shares to us.
23
PLAN OF DISTRIBUTION
We may sell the securities covered by this prospectus in any of the
following three ways (or in any combination):
o through underwriters, dealers or remarketing firms;
o directly to one or more purchasers, including to a limited number of
institutional purchasers; or
o through agents.
Any such dealer or agent, in addition to any underwriter, may be deemed to
be an underwriter within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). Any discounts or commissions received by an underwriter,
dealer, remarketing firm or agent on the sale or resale of securities may be
considered by the SEC to be underwriting discounts and commissions under the
Securities Act.
In addition, we may enter into derivative transactions with third parties,
or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction, the third parties may, pursuant to this
prospectus and the applicable prospectus supplement, sell securities covered by
this prospectus and the applicable prospectus supplement. If so, the third party
may use securities borrowed from us or others to settle such sales and may use
securities received from us to close out any related short positions. We may
also loan or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus supplement.
The terms of the offering of the securities with respect to which this
prospectus is being delivered will be set forth in the applicable prospectus
supplement and will include, among other things:
o the type of and terms of the securities offered;
o the price of the securities;
o the proceeds to us from the sale of the securities;
o the names of the securities exchanges, if any, on which the securities
are listed;
o the name of any underwriter, dealer, remarketing firm or agent and the
amount of securities underwritten or purchased by each of them;
o any over-allotment options under which underwriters may purchase
additional securities from us;
o any underwriting discounts, agency fees or other compensation to
underwriters or agents; and
o any discounts or concessions which may be allowed or reallowed or paid
to dealers.
If underwriters are used in the sale of securities, such securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters acting alone. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to purchase the
securities described in the applicable prospectus supplement will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all such securities if any are purchased by them. Any public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers acting as principals are used in the sale of any securities,
such securities will be acquired by the dealers, as principals, and may be
resold from time to time in one or more transactions at varying prices to be
24
determined by the dealer at the time of resale. The name of any dealer and the
terms of the transaction will be set forth in the prospectus supplement with
respect to the securities being offered.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms, which we refer to herein as the "remarketing firms,"
acting as principals for their own accounts or as our agents, as applicable. Any
remarketing firm will be identified and the terms of its agreement, if any, with
us and its compensation will be described in the applicable prospectus
supplement. Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act in connection with the securities remarketed
thereby.
The securities may be sold directly by us or through agents designated by
us from time to time. In the case of securities sold directly by us, no
underwriters or agents would be involved. Any agents involved in the offer or
sale of the securities in respect of which this prospectus is being delivered,
and any commissions payable by us to such agents, will be set forth in the
applicable prospectus supplement. Unless otherwise indicated in the applicable
prospectus supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
We may authorize agents, underwriters or dealers to solicit offers by
certain specified institutions to purchase the securities to which this
prospectus and the applicable prospectus supplement relates from us at the
public offering price set forth in the applicable prospectus supplement, plus,
if applicable, accrued interest, pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject only to those conditions set forth in the applicable
prospectus supplement, and the applicable prospectus supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers, underwriters and remarketing firms may be entitled, under
agreements entered into with us to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
to payments they may be required to make in respect thereof. Agents, dealers,
underwriters and remarketing firms may be customers of, engage in transactions
with, or perform services for us or our subsidiaries in the ordinary course of
business.
Unless otherwise indicated in the applicable prospectus supplement, all
securities offered by this prospectus, other than our common stock that is
listed on the New York Stock Exchange, will be new issues with no established
trading market. We may elect to list any series of securities on an exchange,
and, in the case of our common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement, we shall not be
obligated to do so. In addition, underwriters will not be obligated to make a
market in any securities. No assurance can be given regarding the activity of
trading in, or liquidity of, any securities.
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
LEGAL MATTERS
Unless otherwise indicated in a supplement to this prospectus, the validity
of the securities will be passed upon for us by Shearman & Sterling LLP, New
York, New York.
25
EXPERTS
The consolidated balance sheets of CIT Group Inc. and its subsidiaries as
of December 31, 2003, December 31, 2002 and September 30, 2002 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended December 31, 2003, the three months ended December 31, 2002, the year
ended September 30, 2002, the period from June 2, 2001 through September 30,
2001 and the period from January 1, 2001 through June 1, 2001 included in the
Current Report on Form 8-K dated September 21, 2004, incorporated by reference
herein and in the registration statement of which this prospectus forms a part,
have been so incorporated by reference in reliance on the reports of
PricewaterhouseCoopers LLP, independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
26
U.S.$15,000,000,000
[CIT LOGO]
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
Global Medium-Term Note Program
Due 9 Months or More
From Date of Issue
----------
PROSPECTUS SUPPLEMENT
October 29, 2004
----------
Lehman Brothers
ABN AMRO Incorporated
Banc of America Securities LLC
Barclays Capital
Bear, Stearns & Co. Inc.
BNP PARIBAS
Citigroup
Credit Suisse First Boston
Deutsche Bank Securities
Goldman, Sachs & Co.
HSBC
JPMorgan
Merrill Lynch & Co.
Morgan Stanley
UBS Investment Bank
Wachovia Securities
STATEMENT OF DIFFERENCES
The Euro sign shall be expressed as....................................... 'E'