-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WYumSZBAHFYCLINqUI1ndZscR7WtDrPokLUsERk7heJD6OrS7Lpikj8/HYeIb99v wuj16Gc6VXdjH8pa7GGfmw== 0000030554-94-000014.txt : 19940311 0000030554-94-000014.hdr.sgml : 19940311 ACCESSION NUMBER: 0000030554-94-000014 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: 2820 IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 33 SEC FILE NUMBER: 033-48128 FILM NUMBER: 94515456 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 424B3 1 PRICE SUPPLEMENT Filed Under Rule 424(b)(3) File No. 33-48128 PRICING SUPPLEMENT NO. 39 DATED MARCH 8, 1994 To Prospectus dated June 2, 1992 and Prospectus Supplement dated July 24, 1992) E. I. DUPONT DE NEMOURS AND COMPANY MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FLOATING RATE) DSE-CUSIP: 26353V BJ7 Face Amount: $64,400,000 Net Proceeds to Company: $64,303,400 Issue Price: 100% Specified Currency: U.S. Dollars Original Issue Date: March 17, 1994 Determination Agent: Merrill Lynch, Pierce, Fenner & Smith Incorporated Stated Maturity: March 17, 1995 Form: [X] Book-Entry [ ] Certificated Interest Rate: 4.25% Interest Payment Dates: September 17, 1994 and March 17, 1995 Minimum Denominations: $1,000 - ------------------------------------------------------------------------- Redemption: [X] The Notes cannot be redeemed prior to the Stated Maturity. [ ] The Notes may be redeemed prior to the Stated Maturity. Initial Redemption Date: Initial Redemption Price: Annual Redemption Price Reduction: Repayment: [X] The Notes cannot be repaid prior to the Stated Maturity. [ ] The Notes may be repaid prior to the Stated Maturity. Initial Repayment Date: Initial Repayment Price: Annual Repayment Price Reduction: Discount Note: [ ] Yes [X] No Total Amount of OID: Yield to Maturity: Initial Accrual Period OID: Principal Discount or Commission: 0.150% Agent: Merrill Lynch, Pierce, Fenner & Smith Incorporated - 1 - DESCRIPTION OF NOTES The following description of the particular terms of the Notes described herein (which are Indexed Notes) supplements, and to the extent inconsistent therewith replaces, the descriptions of the general terms and provisions of the Notes set forth in the accompanying Prospectus Supplement and of the Debt Securities set forth in the accompanying Prospectus, to which descriptions reference is hereby made. All terms used but not defined herein which are defined in the accompanying Prospectus or Prospectus Supplement shall have the meanings therein assigned to them. Payment of Interest The Notes will bear interest at the fixed rate per annum stated above. Interest will be payable on September 17, 1994 and at Stated Maturity. Payment of Principal The principal amount of a Note payable at Stated Maturity shall be the greater of (i) zero and (ii) an amount determined by the Determination Agent on the Reference Date based on the following formula: 15% X Face Amount X [1 + Dur1 X (7.10% - CAD5)] + 15% X Face Amount X [1 + Dur2 X (7.38% - CAD7)] + 15% X Face Amount X [1 + Dur3 X (7.11% - AUD5)] + 15% X Face Amount X [1 + Dur4 X (7.35% - AUD10)] + 40% X Face Amount X [1 + Dur5 X (4.27% - JPY7)] See "Description of Notes--Certain Definitions" for the definition of certain terms used in the foregoing formula. The principal amount of a Note payable at Stated Maturity thus will be determined with reference to the five and seven-year offered side Canadian Dollar swap rates, the five and ten-year offered side Australian Dollar swap rates and the seven-year offered side Japanese Yen swap rate, but will never be less than zero. Depending on such rates on the Reference Date, the principal amount payable at Stated Maturity will range from zero to an amount in excess of the Face Amount. In the absence of manifest error, the determination by the Determination Agent of the principal amount payable at Stated Maturity shall be final and binding. Certain Definitions "AUD5" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: AUD5 will be determined on the basis of the offered side of the five-year Australian Dollar swap rate which appears on the Telerate Page 42278 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of the Reference Dealers to provide the Determination Agent with its offered quotation for the five-year Australian Dollar swap rate at approximately 11:00 A.M., London time, on the Reference Date in an amount that is representative of a single transaction for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "AUD5" will be - 2 - the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determines, in good faith, in its absolute discretion. "AUD10" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: AUD10 will be determined on the basis of the offered side of the ten-year Australian Dollar swap rate which appears on the Telerate Page 42278 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of the Reference Dealers to provide the Determination Agent with its offered quotation for the ten-year Australian Dollar swap rate at approximately 11:00 A.M., London time, on the Reference Date in an amount that is representative of a single transaction for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "AUD10" will be the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determines, in good faith, in its absolute discretion. "Australian Dollar swap rate" means, in general, a fixed per annum rate of interest quoted on a 30/360 day basis and paid semi-annually that a hypothetical fixed rate payor would be prepared to pay under an interest rate swap or exchange agreement, and for which such payor would expect to receive, in return, over the period of years specified, a floating rate of interest equal to the then-prevailing six-month Australian Dollar LIBOR rate. "Telerate Page 42278" means the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices relating to Australian Dollar swap rates). "CAD5" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: CAD5 will be determined on the basis of the offered side of the five year Canadian Dollar swap rate which appears on the Telerate Page 42277 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of the Reference Dealers to provide the Determination Agent with its offered quotation for the five-year Canadian Dollar swap rate at approximately 11:00 A.M., London time, on the Reference Date in an amount that is representative of a single transaction for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "CAD5" will be the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determines, in good faith, in its absolute discretion. - 3 - "CAD7" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: CAD7 will be determined on the basis of the offered side of the seven-year Canadian Dollar swap rate which appears on the Telerate Page 42277 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of the Reference Dealers to provide the Determination Agent with its offered quotation for the seven-year Canadian Dollar swap rate at approximately 11:00 A.M., London time, on the Reference Date in an amount that is representative of a single transaction for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "CAD7" will be the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determines, in good faith, in its absolute discretion. "Canadian Dollar swap rate" means, in general, a fixed per annum rate of interest quoted on an annual, 30/360 day basis and paid semi-annually that a hypothetical fixed rate payor would be prepared to pay under an interest rate swap or exchange agreement, and for which such payor would expect to receive, in return, over the period of years specified, a floating rate of interest equal to the then-prevailing six-month Canadian Dollar LIBOR rate. "Telerate Page 42277" means the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices relating to Canadian Dollar swap rates). "JPY7" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: JPY7 will be determined on the basis of the offered side of the seven-year Japanese Yen swap rate which appears on the Telerate Page 42283 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of the Reference Dealers to provide the Determination Agent with its offered quotation for the seven-year Japanese Yen swap rate at approximately 11:00 A.M. London time, on the Reference Date in an amount that is representative of a single transaction for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "JPY7" will be the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determines, in good faith, in its absolute discretion. "Japanese Yen swap rate" means, in general, a fixed per annum rate of interest quoted on an annual, 30/360 day basis and paid semi-annually that a hypothetical fixed rate payor would be prepared to pay under an interest rate swap or exchange agreement, and for which such payor would expect to receive, in return, over the period of years specified, a floating rate of interest equal to the then-prevailing six-month Japanese Yen LIBOR rate. - 4 - "Telerate Page 42283" means the display page so designated on the Dow Jones Telerate Service (or such dollar page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices relating to Japanese Yen swap rates). "Determination Day" means any day, other than a Saturday or Sunday, that is not a day on which banking institutions are authorized or required by law or regulation to close in New York City and also is a day in which dealings in deposits in Australian Dollars, Canadian Dollars and Japanese Yen are transacted in the London interbank market. "Reference Date" means the second Determination Day prior to Stated Maturity. "Reference Dealer" means any major bank or banking corporation in London, selected in good faith by the Determination Agent, which will provide offered quotations on the relevant swap rates. "Dur1" means an amount equal to the formula: (1 / CAD5) x [1 - (1 + (CAD5 / 2)) raised to the exponent (-10)]. "Dur2" means an amount equal to the formula: (1 / CAD7) x [1 - (1 + CAD7 / 2)) raised to the exponent (-14)]. "Dur3" means an amount equal to the formula: (1 / AUD5) x [1 - (1 + AUD5 / 2)) raised to the exponent (-10)]. "Dur4" means an amount equal to the formula: (1 / AUD10) x [1 - (1 + (AUD10 / 2)) raised to the exponent (-20)]. "Dur5" means an amount equal to the formula: (1 / JPY7 x [1 - (1 + JPY7 / 2)) raised to the exponent (-14)]. IMPORTANT INFORMATION An investment in the Notes entails significant risks that are not associated with a similar investment in other Debt Securities. Such risks include, without limitation, the possibility of significant changes in Canadian Dollar, Australian Dollar and Japanese Yen swap rates and in rates of exchange between currencies and the possibility of the imposition or modification of foreign exchange controls by either the United States or foreign governments. Such risks generally depend on factors over which the Company has no control. For example, the exchange rates between currencies are at any moment a result of the supply of, and demand for, each currency. Changes in swap rates result over time from the interaction of many factors directly or indirectly affecting economic conditions in the United States, Canada, Australia and Japan, as well as economic, military and political developments in other countries. Of particular importance are exchange rates, rates of inflation, interest rate levels, the balance of payments and - 5 - the extent of government surpluses and deficits in the respective countries, all of which are in turn sensitive to the monetary, fiscal and trade policies pursued by the governments in such countries and in other countries important to international trade and finance. Also, sovereign governments use a variety of techniques, such as intervention by a country's central bank or imposition of regulatory controls or taxes, to affect the level of interest rates and exchange rates of their currencies. Governments may also issue a new currency to replace an existing currency or alter the exchange rate or relative exchange characteristics by devaluation or revaluation of a currency. Thus, a special risk in purchasing the Notes is that governmental actions could interfere with or change theretofore freely determined currency valuations and fluctuations in market forces. There will be no adjustment or change in the terms of the Notes in the event that exchange rates should 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, the Canadian Dollar, the Australian Dollar or the Japanese Yen or Canadian Dollar, Australian Dollar or Japanese Yen swap rates. THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND PROSPECTUS SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE NOTES. THE COMPANY BELIEVES THAT THESE RISKS ARE POTENTIALLY TOO VARIABLE TO ASCERTAIN AND DESCRIBE WITH ANY REASONABLE DEGREE OF CERTAINTY AND INCORPORATING EVERY ECONOMIC, FINANCIAL, POLITICAL AND MILITARY CIRCUMSTANCE, AMONG OTHER THINGS, WOULD BE IMPRACTICAL. PROSPECTIVE INVESTORS SHOULD THEREFORE CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS. SWAP RATES The following table sets forth certain historical swap rates based on (source) the last New York Business Day of the month indicated: Seven- Seven- Five-Year Year Five-Year Ten-Year Year Canadian Canadian Australian Australian Japanese Month-End Dollar Dollar Dollar Dollar Dollar 1989: March 11.47886 11.25600% 15.15% 14.40% 5.30% June 10.27216 10.29630 15.03 14.40 5.55 September 10.89918 10.83934 15.36 14.50 5.51 December 10.85457 10.75952 14.20 13.85 6.40 1990: March 12.74270 12.44374 14.67 14.28 7.48 June 12.17936 11.96338 14.74 14.23 7.14 September 11.92693 11.99700 13.81 14.02 8.15 December 11.11007 10.97670 12.79 12.80 6.95 1991: March 10.14572 10.23796 12.13 12.27 7.01 June 10.40687 10.62792 11.76 12.00 7.25 September 9.246721 9.323514 10.83 11.23 6.29 December 8.362758 8.536713 8.73 9.88 5.88 - 6 - Seven- Seven- Five-Year Year Five-Year Ten-Year Year Canadian Canadian Australian Australian Japanese Month-End Dollar Dollar Dollar Dollar Dollar 1992: March 9.358686 9.470033 10.02 10.44 5.86 June 8.130834 8.526567 8.43 9.45 5.61 September 8.077457 8.382866 8.93 9.48 5.11 December 8.304973 8.487182 8.72 9.40 4.99 1993: March 7.570036 8.285028 7.42 8.09 4.84 June 7.159651 7.725555 7.03 7.70 4.89 September 6.753463 7.245875 6.65 7.12 4.09 December 5.881373 6.576602 6.48 6.97 3.26 On March 8, 1994, the Offered side swap rates as reported by Bloomberg Financial Markets were as follows: five-year Canadian Dollar = 7.01%; seven-year Canadian Dollar = 7.30%; five-year Australian Dollar = 7.14%; ten-year Australian Dollar = 7.54%; and seven-year Japanese Yen = 4.39%. The information presented in the above table is furnished as a matter of information only. In recent years, Canadian Dollar, Australian Dollar and Japanese Yen swap rates have been highly volatile and such volatility may occur in the future. The fluctuations in the Canadian Dollar, Australian Dollar and Japanese Yen swap rates that have occurred in the past, however, are not necessarily indicative of fluctuations in the rates that may occur over the term of the notes. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES In addition to the consequences summarized in the Prospectus Supplement under the heading "United States Taxation", set forth below is a summary of certain United States Federal income tax consequences to original Holders of the Notes that have purchased the Notes at their Issue Price. The Federal income tax treatment of the payments on the Notes is unclear because payment on the Notes at Stated Maturity is entirely contingent. However, there are at least three possible alternative approaches. Under the first approach, interest payments made on September 17, 1994, and at Stated Maturity will be taxable to a Holder that is a United States person (a "U.S. Holder") as ordinary income at the time they accrue or are received, depending on the U.S. Holder's method of tax accounting. At Stated Maturity a U.S. Holder will recognize short-term capital loss if the amount paid with respect to a Note is less than the Note's Issue Price and short-term capital gain or possibly ordinary income if the amount paid is greater than the Issue Price. Under the second approach, the payments of interest on September 17, 1994, and at Stated Maturity will be treated as a non-taxable - 7 - return of principal and reduce the U.S. Holder's tax basis (which initially was the Issue Price). On the Stated Maturity, a U.S. Holder will recognize ordinary income (treated as interest) to the extent the payment made by the Company exceeds such U.S. Holder's tax basis and capital loss to the extent it is less than such U.S. Holder's tax basis. In the case of non-U.S. Holders, such interest will be treated as described in the Prospectus Supplement under "Non-United States Persons". This approach is based on existing proposed original issue discount regulations relating to contingent payment debt obligations (the "Proposed Regulations"), which by their terms apply to the Notes. However, the Proposed Regulations no longer appear to reflect the IRS's current position with respect to contingent payment debt obligations. Under the third approach, accrual method U.S. Holders would accrue original issue discount ("OID") into income, as described in the Prospectus Supplement, based on the expected yield of the Note using a reasonable estimate of the payment at Stated Maturity determined as of the end of a taxable year or as of the issue date, or a market yield for the Note determined as of the issue date. Such amounts would be subject to subsequent adjustments to the extent that the estimate was incorrect. The payments of interest on September 17, 1994, and at Stated Maturity will be treated first as payments of OID to the extent of accrued OID at such time and then as a return of principal and, therefore, such payments would not be included in a U.S. Holder's income. Cash method U.S. Holders would apply estimates in a similar fashion to that described in the Prospectus Supplement under "United States Taxation--United States Holders--Short-Term Notes" to determine the portion of interest received that was taxable. This approach is based on proposed contingent payment debt regulations that were announced by the IRS in January 1993 but subsequently withdrawn. Although under the third approach any gain recognized on the sale or exchange of a Note would be ordinary income, under the first and second approaches, it is not clear whether any such gain recognized would be ordinary income or capital gain, Any loss on the sale or exchange of a Note would be a capital loss (except in some circumstances under the third approach). Backup Withholding. The rate of backup withholding has been increased from 20% to 31%. - 8 - -----END PRIVACY-ENHANCED MESSAGE-----