Exhibit 1.2
EXECUTION COPY
$500,000,000
CATERPILLAR FINANCIAL SERVICES CORPORATION
(a Delaware corporation)
5.95% Notes due 2006
TERMS AGREEMENT
---------------
May 8, 2001
To: Caterpillar Financial Services Corporation
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Ladies and Gentlemen:
We understand that Caterpillar Financial Services Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell $500,000,000 aggregate
principal amount of its debt securities (the "Debt Securities") (such securities
also being hereinafter referred to as the "Underwritten Securities"). Subject
to the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the principal amount of Underwritten Securities opposite their
respective names set forth below at the purchase price set forth below.
Principal
Amount of
5.95% Notes
Underwriters due 2006
--------------------- ----------------
Xxxxxx Xxxxxxx & Co. Incorporated................................ $158,750,000
Xxxxxxx Xxxxx Xxxxxx Inc......................................... 158,750,000
ABN AMRO Incorporated............................................ 22,500,000
Commerzbank AG................................................... 22,500,000
X.X. Xxxxxx Securities Inc....................................... 22,500,000
X.X. Xxxxx Securities Corporation................................ 22,500,000
Westdeutsche Landesbank Girozentrale............................. 22,500,000
Banc of America Securities LLC................................... 12,500,000
Banc One Capital Markets, Inc.................................... 12,500,000
Barclays Bank PLC................................................ 15,000,000
RBC Dominion Securities Corporation.............................. 15,000,000
TD Securities (USA) Inc.......................................... 15,000,000
------------
Total............................................................ $500,000,000
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EXECUTION COPY
The Underwritten Securities shall have the following terms:
Title: 5.95% Notes due 2006 (the "Notes").
Rank: Senior Debt Securities.
Aggregate principal amount: $500,000,000.
Denominations: In denominations of $1,000 and integral multiples
thereof.
Currency of payment: U.S. dollars.
Interest rate or formula: 5.95% per annum.
Interest payment dates: May 1 and November 1 of each year, commencing November
1, 2001.
Regular record dates: April 15 or October 15 immediately preceding the
applicable interest payment date.
Stated maturity date: May 1, 2006.
Redemption provisions: The Notes will be redeemable as a whole at any time or
in part from time to time, at the Company's option, at
a redemption price equal to the greater of (i) 100% of
the principal amount of the Notes or (ii) the sum of
the present values of the remaining scheduled payments
of principal and interest thereon from the redemption
date to the maturity date (exclusive of any accrued
interest) discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 20
basis points, plus, in each case, any interest accrued
but not paid to the date of redemption.
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"Treasury Rate" means, with respect to any redemption
date for the Notes, (i) the yield, under the heading
which represents the average for the immediately
preceding week, appearing in the most recently
published statistical release designated "H.15(519)"
or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded
United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within
three months before or after the maturity date for the
Notes, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or
(ii) if that release (or any successor release) is not
published during the week preceding the calculation
date or does not contain such yields, the rate per
annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for that
redemption date. The Treasury Rate shall be
calculated on the third Business Day preceding the
redemption date.
"Business Day" means any calendar day that is not a
Saturday, Sunday or legal holiday in New York, New
York and on which commercial banks are open for
business in New York, New York.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent
Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that
would be utilized, at the time of selection and in
accordance with customary financial practice, in
pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such
securities.
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"Independent Investment Banker" means either Xxxxxx
Xxxxxxx & Co. Incorporated or Xxxxxxx Xxxxx Xxxxxx
Inc., and their respective successors, or, if both
firms are unwilling or unable to select the Comparable
Treasury Issue, a nationally recognized investment
banking institution which is a Primary Treasury Dealer
appointed by the Company.
"Comparable Treasury Price" means, with respect to any
redemption date for the Notes, (i) the average of five
Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or
(ii) if, after seeking at least five Reference
Treasury Dealer Quotations and excluding the highest
and lowest Reference Treasury Dealer Quotations, the
Independent Investment Banker obtains fewer than five
such Reference Treasury Dealer Quotations, the average
of all such quotations.
"Reference Treasury Dealer" means (1) Xxxxxx Xxxxxxx &
Co. Incorporated or Xxxxxxx Xxxxx Xxxxxx Inc., and
their respective successors, provided, however, that
if any of the foregoing shall cease to be a primary
U.S. government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company will
substitute for such dealer another Primary Treasury
Dealer and (2) any other nationally recognized Primary
Treasury Dealer selected by the Independent Investment
Banker and acceptable to the Company.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the
Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker
by that Reference Treasury Dealer at 5:00 p.m. (New
York City time) on the third Business Day preceding
that redemption date.
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Holders of Notes to be redeemed will receive notice
thereof by first-class mail at least 30 and not more
than 60 days before the date fixed for redemption. If
fewer than all of the Notes are to be redeemed, the
Trustee will select the particular Notes or portions
thereof for redemption from the outstanding Notes not
previously called, pro rata or by lot, or in such
other manner as the Company shall direct.
Unless the Company defaults in payment of the
redemption price, on and after the redemption date
interest will cease to accrue on the Notes or portions
thereof called for redemption.
Sinking fund requirements: None.
Listing: None.
Rating requirements: None.
Black-out provisions: None.
Fixed or variable price offering: Fixed Price Offering.
Public offering price: 99.880% of the principal amount, plus accrued
interest, if any, from May 15, 2001.
Purchase price: 99.530 % of the principal amount, plus accrued
interest, if any, from May 15, 2001.
Form: Except as otherwise provided in the Prospectus or the
Prospectus Supplement relating to the Notes, the Notes
will be issued in book-entry form registered in the
name of Cede & Co., as nominee for The Depository
Trust Company.
Other terms and conditions: The Company will pay certain additional
amounts if certain U.S. withholding taxes are
imposed.
Closing date and location: 9:30 a.m., New York City time, on May 15, 2001 at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
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Each Underwriter, severally and not jointly, represents and agrees that:
(a) (i) It has not offered or sold and will not offer or sell any
Underwritten Securities to persons in the United Kingdom prior to the expiry of
the period of six months from the issue date of the Underwritten Securities
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purpose 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;
(ii) It has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
issue of the Underwritten Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 (as amended) or is a person to whom such document may
otherwise lawfully be issued or passed on;
(iii) It has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done by
it in relation to any Underwritten Securities in, from or otherwise involving
the United Kingdom;
(iv) It will not offer or sell any Underwritten Securities
directly or indirectly in Japan or to, or for the benefit of any Japanese person
or to others, for re-offering or re-sale directly or indirectly in Japan or to
any Japanese person except under circumstances which will result in compliance
with all applicable laws, regulations and guidelines promulgated by the relevant
governmental and regulatory authorities in effect at the relevant time. For
purposes of this paragraph, "Japanese person" shall mean any person resident in
Japan, including any corporation or other entity organized under the laws of
Japan;
(v) It is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect of the sale of the
Underwritten Securities and that it will comply with the Securities Selling
Prospectus Act (the "SSP Act") of the Federal Republic of Germany (Werpapier-
Verkaufsprospektgesetz). In particular, each Underwriter has undertaken not to
engage in a public offering (offenliche Anbieten) in the Federal Republic of
Germany with respect to any Underwritten Securities otherwise than in accordance
with the SSP Act and any other act replacing or supplementing the SSP Act and
all other applicable laws and regulations; and
(vi) The Underwritten Securities are being issued and sold
outside the Republic of France and that, in connection with their initial
distribution, it has not offered or sold and will not offer or sell, directly or
indirectly, any Underwritten Securities to the public in the Republic of France,
and that it has not distributed and will not distribute or cause to be
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distributed to the public in the Republic of France the Prospectus Supplement,
the Prospectus or any other offering material relating to the Underwritten
Securities.
(b) Except for registration under the Securities Act of 1933, as
amended, and qualification of the Underwritten Securities for offer and sale,
and the determination for their eligibility for investment, under the applicable
securities laws of such jurisdictions within the United States as the
Representatives may designate pursuant to Section 3(f) of Annex I hereto, no
action has been or will be taken by it that would permit the offer or sale of
the Underwritten Securities or any interest therein or possession or
distribution of the Prospectus Supplement or the Prospectus or any amendment
thereto or any other offering material relating to the Underwritten Securities
in any jurisdiction where action for that purpose is required. Without prejudice
to paragraph (a) above, it has not and will not directly or indirectly offer,
sell or deliver any Underwritten Securities or any interest therein or
distribute or publish the Prospectus Supplement, the Prospectus or any other
offering material relating to the Underwritten Securities in or from any
jurisdiction except under circumstances that will result in compliance with all
applicable laws and regulations and will not impose any obligations on the
Company, except as provided herein. Subject as provided above, each Underwriter
shall, if required by applicable law, furnish to each person to whom it offers,
sells or delivers the Underwritten Securities a copy of the Prospectus
Supplement and the Prospectus. No Underwriter is authorized to give any
information or to make any representation not contained in the Prospectus
Supplement or the Prospectus in connection with the offer and sale of the
Underwritten Securities.
All of the provisions contained in the document attached as Annex I hereto
entitled "CATERPILLAR FINANCIAL SERVICES CORPORATION -- Debt Securities --
Underwriting Agreement" (the "Underwriting Agreement") are hereby incorporated
by reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
Each reference to Underwriters in the Underwriting Agreement so incorporated
herein by reference shall be deemed to refer to the Underwriters as defined in
this Terms Agreement.
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Please accept this offer by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Principal
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
Acting on behalf of themselves and the other
named Underwriters.
Accepted:
CATERPILLAR FINANCIAL
SERVICES CORPORATION
By: /s/ Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
Title: Secretary
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