-----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, XyBddzGbz1zwf1solayH/2rE85j5I1xRpwQxD2cFQBOeOWqH4HoCnYDnznV3UedH SlQldT397sCU7/XVdmEfpA== 0000893220-95-000005.txt : 19950110 0000893220-95-000005.hdr.sgml : 19950110 ACCESSION NUMBER: 0000893220-95-000005 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950109 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTA CORP CENTRAL INDEX KEY: 0000096638 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 231462070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-50883 FILM NUMBER: 95500664 BUSINESS ADDRESS: STREET 1: 650 NAAMANS RD STREET 2: BRANDYWINE CORPORATE CENTER CITY: CLAYMONT STATE: DE ZIP: 19703 BUSINESS PHONE: 2156574000 MAIL ADDRESS: STREET 1: BRANDYWINE CORPORATE CENTER STREET 2: 650 NAAMANS ROAD CITY: CLAYMONT STATE: DE ZIP: 19703 FORMER COMPANY: FORMER CONFORMED NAME: TSO FINANCIAL CORP DATE OF NAME CHANGE: 19880306 FORMER COMPANY: FORMER CONFORMED NAME: TEACHERS SERVICE ORGANIZATION INC DATE OF NAME CHANGE: 19850812 424B3 1 ADVANTA CORP. MEDIUM TERM NOTES, SERIES A 1 Pricing Supplement dated January 6, 1995 Ruled 424(b)(3) (To Prospectus dated November 8, 1993, and File No. 33-50883 Prospectus Supplement dated December 3, 1993 ADVANTA CORP. Medium-Term Notes, Series A - Floating Rate ================================================================================================== Principal Amount: $5,000,000 Initial Interest Rate: 6.65% Agent's Discount or Commission: $12,500 Stated Maturity Date: 1/10/97 Net Proceeds to Issuer: $4,987,500 Original Issue Date: 1/10/95 Issue Price: 100% Trade Date: 1/6/95 ================================================================================================== Calculation Agent: The Chase Manhattan Bank Cusip No.: 00756QAZ1 (National Association) Interest Calculation: /X / Regular Floating Rate Note / / Floating Rate/Fixed Rate Note (Fixed Rate Commencement Date): / / Inverse Floating Rate Note (Fixed Interest Date): (Fixed Interest Rate): / / Other Floating Rate Note (see attached) Interest Rate Basis: / / CD Rate / / Commercial Paper Rate / / Eleventh District Cost of Funds Rate / / Federal Funds Rate /X/ LIBOR Index Currency: / / LIBOR Reuters / / Treasury Rate /X/ LIBOR Telerate / / Other (see attached) Initial Interest Reset Date: 3/15/95 Spread (+/-): +40 Interest Reset Dates: Quarterly, the third Wednesday Spread Multiplier: N/A of March, June, September and December Maximum Interest Rate: N/A of each year Minimum Interest Rate: N/A Interest Payment Dates: Quarterly, the third Wednesday of March, June, September and December of each year Index Maturity: 3 Month LIBOR, except for the last Interest Reset Period commencing on the third Wednesday of December 1996, for which the Index Maturity shall be 1 Month LIBOR. Day Count Convention: / / 30/360 for the period from to /X / Actual/360 for the period from 1/10/95 to 1/10/97 / / Actual/Actual for the period from to
2 Redemption: /X / The Notes cannot be redeemed prior to the Stated Maturity Date. / / The Notes may be redeemed prior to the Stated Maturity Date. Initial Redemption Date: Initial Redemption Percentage: _____% Annual Redemption Percentage Reduction: ____% until Redemption Percentage is 100% of the principal amount. Repayment: /X / The Notes cannot be repaid prior to the Stated Maturity Date. / / The Notes can be repaid prior to the Stated Maturity Date at the option of the holder of the Notes. Optional Repayment Date(s): Repayment Price: ________%
Currency: Specified Currency: U.S. dollars (If other than U.S. dollars, see attached) Minimum Denominations: (Applicable only if Specified Currency is other than U.S. dollars) Original Issue Discount: / / Yes / X/ No Total Amount of OID: Yield to Maturity: Initial Accrual Period: Form: /X / Book Entry / / Certificated Agent acting in the capacity as indicated below: / X/ Agent / / Principal 3 If as Principal: / / The Notes are being offered at varying prices related to prevailing market prices at the time of resale. / / The Notes are being offered at a fixed initial public offering price of _____% of principal amount. If as Agent: The Notes are being offered at a fixed initial public offering price of 100% of principal amount. /X/ Other Provisions: See Attachment 1. ------------------------------------ / / Merrill Lynch & Co. /X / CS First Boston / / Salomon Brothers Inc 4 ATTACHMENT 1 The following discussion supplements and, to the extent inconsistent with, replaces the discussion contained in the accompanying Prospectus Supplement under the heading "United States Taxation--Tax Consequences to United States Holders--Original Issue Discount Notes". On January 27, 1994, the Internal Revenue Service ("IRS") issued final Treasury regulations (the "OID Regulations") under the original issue discount provisions of the Code. The OID Regulations, which replaced certain proposed issue discount regulations that were issued on December 21, 1992, generally apply to debt instruments issued on or after April 4, 1994. In addition, tax payers may rely on the OID Regulations for debt instruments issued after December 21, 1992. Under the OID Regulations, the issue price of an issue of Notes equals the first price at which a substantial amount of such Notes has been sold. The stated redemption price at maturity of a Note in the sum of all payments provided by the Note other than "qualified stated interest" payments. The term "qualified stated interest" generally means stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate. In addition, under the OID Regulations, if a Note bears interest for one or more accrual periods at a rate below the rate applicable for the remaining term of such Note (e.g., Notes with teaser rates or interest holidays), and if the greater of either the resulting foregoing interest on such Note or any "true" discount on such Note (i.e., the excess of Note's stated principal amount over its issue price) equals or exceeds a specified de minimis amount, then the stated interest on the Note would be treated as original issue discount rather than qualified stated interest. Under the OID Regulations, Floating Rate Notes and Indexed Notes ("Variable Notes") are subject to special rules whereby a Variable Note will qualify as a "variable rate debt instrument" if (a) its issue price does not exceed the total noncontingent principal payments due under the Variable Note by more than a specified de minimis amount and (b) it provides for stated interest, paid or compounded at least annually, at current values of (i) one or more qualified floating rates, (ii) a single fixed rate and one or more qualified floating rates, (iii) a single objective rate, or (iv) a single fixed rate and a single objective rate that is a qualified inverse floating rate. A "qualified floating rate" is any variable rate where variations in the value of such rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the Variable Note is denominated. Although a multiple of a qualified floating rate will generally not itself constitute a qualified floating rate, a variable rate equal to the product of a qualified floating rate and a fixed multiple that is greater than zero but not more than 1.35 will constitute a qualified floating rate. A variable rate equal to the product of a qualified floating rate and a fixed multiple that is greater than zero but not more than 1.35, increased or decreased by a fixed rate, will also constitute a qualified floating rate. In addition, under the OID Regulations, two or more qualified 5 floating rates than can reasonably be expected to have approximately the same values throughout the term of the Variable Note (e.g., two or more qualified floating rates with values within 25 basis points of each other as determined on the Variable Note's issue date) will be treated as a single qualified floating rate. Notwithstanding the foregoing, a variable rate that would otherwise constitute a qualified floating rate but which is subject to one or more restrictions such as a maximum numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a floor) may, under certain circumstances, fail to be treated as a qualified floating rate under the OID Regulations. An "objective rate" is a rate that is not itself a qualified floating rate but which is determined using a single fixed formula and which is based upon (i) one or more qualified floating rates, (ii) one or more rates where each rate would be a qualified floating rate for a debt instrument denominated in a currency other than the currency in which the Variable Note is denominated, (iii) either the yield or changes in the price of one or more items of actively traded personal properly, or (iv) a combination of objective rates. The OID Regulations also provide that other variable interest rates may be treated as objective rates if so designated by the IRS in the future. Despite the foregoing, a variable rate of interest on a Variable Note will not constitute an objective rate if it is reasonably expected that the average value of such rate during the first half of the Variable Note's term will be either significantly less than or significantly greater than the average value of the rate during the final half of the Variable Note's term. A "qualified inverse floating rate" is any objective rate where such rate is equal to a fixed rate minus a qualified floating rate, as long as variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the cost of newly borrowed funds. The OID Regulations also provide that if a Variable Note provides for stated interest at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate and if the variable rate on the Variable Note's issue date is intended to approximate the fixed rate (e.g., the value of the variable rate on the issue date does not differ from the value of the fixed rate by more than 25 basis points), then the fixed rate and the variable rate together will constitute either a single qualified floating rate or objective rate, as the case may be. If a Variable Note that provides for stated interest at either a single qualified floating rate or a single objective rate throughout the term thereof qualifies as a "variable rate debt instrument" under the OID Regulations, then any stated interest on such Note which is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually will constitute qualified stated interest and will be taxed accordingly. Thus, a Variable Note that provides for stated interest at either a single qualified floating rate or a single objective rate throughout the term thereof and that qualifies as a "variable rate debt instrument" under the OID Regulations will generally not be treated as having been issued with original issue discount unless the Variable Note is issued at a "true" discount (i.e., at a price below the Note's stated principal amount) in excess of a specified de minimis amount. Original issue discount on such a Variable Note arising from "true" discount is allocated to an accrual period using the constant yield method described above. In general, any other Variable Note that qualifies as a "variable rate debt instrument" will be converted into an "equivalent" fixed rate debt instrument for purposes of determining 6 the amount and accrual of original issue discount and qualified stated interest on the Variable Note. The OID Regulations generally require that such a Variable Note be converted into an "equivalent" fixed rate debt instrument by substituting any qualified floating rate or qualified inverse floating rate provided for under the terms of the Variable Note with a fixed rate equal to the value or the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Variable Note's issue date. Any objective rate (other than a qualified inverse floating rate) provided for under the terms of the Variable Note is converted into a fixed rate that reflects the yield that is reasonably expected for the Variable Note. In the case of a Variable Note that qualifies as a "variable rate debt instrument" and provides for stated interest at affixed rate in addition to either one or more qualified floating rates or a qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified inverse floating rate, if the Variable Note provides for a qualified inverse floating rate). Under such circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must be such that the fair market value of the Variable Note as of the Variable Note's issue date is approximately the same as the fair market value of an otherwise identical debt instrument that provides for either the qualified floating rate or qualified inverse floating rate rather than the fixed rate. Subsequent to converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Variable Note is then converted into an "equivalent" fixed rate debt instrument in the manner described above. Once the Variable Note is converted into an "equivalent" fixed rate debt instrument pursuant to the foregoing rules, the amount of original issue discount and qualified stated interest, if any, are determined for the "equivalent" fixed rate debt instrument by applying the general original issue discount rules to the "equivalent" fixed rate debt instrument and a United States Holder of the Variable Note will account for such original issue discount and qualified stated interest as if the United States Holder held the "equivalent" fixed rate debt instrument. Each accrual period appropriate adjustments will be made to the amount of qualified stated interest or original issue discount assumed to have been accrued or paid with respect to the "equivalent" fixed rate debt instrument in the event that such amounts differ from the actual amount of interest accrued or paid on the Variable Note during the accrual period. If a Variable Note does not qualify as a "variable rate debt instrument" under the OID Regulations, then the Variable Note would be treated as a contingent payment debt obligation. It is not entirely clear under current law how a Variable note would be taxed if such Note were treated as a contingent payment debt obligation. The proper United Stated Federal income tax treatment of Variable Notes that are treated as contingent payment debt obligations will be more fully described in the applicable Pricing Supplement. Certain of the Notes (i) may be redeemable at the option of the Company prior to their stated maturity (a "call option") and/or (ii) may be repayable at the option of the holder prior to their stated maturity (a "put option"). Notes containing such features may be subject to rules that differ from the general rules discussed above. Investors intending to purchase Notes with such features should consult their own tax advisors, since the original issue 7 discount consequences will depend, in part, on the particular terms and features of the purchased Notes. United States Holders may generally, upon election, include in income all interest (including stated interest, acquisition discount, original issue discount, de minimis original issue discount, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium) that accrues on a debt instrument by using the constant yield method applicable to original issue discount, subject to certain limitations and exceptions. This election is only available for debt instruments issued on or after April 4, 1994. -----END PRIVACY-ENHANCED MESSAGE-----