-----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, mBBY3oh4DYtGHPZb35L6oqUFuSH5CLWR5EsfELssOUa9tSxhNgKdoSxkRvZVDb7F XCI7QN/QKFyvfSxzBYUNSQ== 0000950130-95-001149.txt : 19950621 0000950130-95-001149.hdr.sgml : 19950621 ACCESSION NUMBER: 0000950130-95-001149 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950620 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANKERS TRUST NEW YORK CORP CENTRAL INDEX KEY: 0000009749 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 136180473 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-50395 FILM NUMBER: 95547991 BUSINESS ADDRESS: STREET 1: 280 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122502500 MAIL ADDRESS: STREET 1: 280 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: BT NEW YORK CORP DATE OF NAME CHANGE: 19671107 424B2 1 PROSPECTUS SUPPLEMENT Rule 424(b)(2) Registration No. 33-50395 PROSPECTUS SUPPLEMENT - --------------------- (TO PROSPECTUS DATED OCTOBER 15, 1993) $75,000,000 BANKERS TRUST NEW YORK CORPORATION 7 1/2% SUBORDINATED NOTES DUE 2010 ---------------- Interest on the Offered Notes is payable by Bankers Trust New York Corporation (the "Corporation") on the 15th of each month of each year, beginning July 15, 1995, and the Offered Notes will mature on June 15, 2010. The Offered Notes will be unsecured and subordinated as described herein under "Certain Terms of the Offered Notes--Subordination." The Offered Notes may not be redeemed prior to June 15, 2000. On or after such date, all, but not less than all, of the Offered Notes may be redeemed at the option of the Corporation semi-annually on each June 15 and December 15 upon at least 30 days' notice at par plus accrued interest to the date fixed for redemption. See "Certain Terms of the Offered Notes--Optional Redemption." Payment of the principal of the Offered Notes may be accelerated only in the case of certain events involving the bankruptcy, insolvency or reorganization of the Corporation. There is no right of acceleration in the case of a default in the performance of any covenant of the Corporation, including the payment of principal or interest. See "Description of Debt Securities" in the Prospectus accompanying this Prospectus Supplement. The Offered Notes will be represented by Global Debt Securities registered in the name of the nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as the Depository. Interests in the Offered Notes represented by Global Debt Securities will be shown on, and transfers thereof will be effected only through, records maintained by the Depository and its direct and indirect participants. Except as described herein, Offered Notes in definitive form will not be issued. Settlement for the Offered Notes will be made in immediately available funds. The Offered Notes will trade in the Depository's Same-Day Funds Settlement System and secondary market trading activity for the Offered Notes will therefore settle in immediately available funds. All payments of principal and interest will be made by the Corporation in immediately available funds or the equivalent. See "Certain Terms of the Offered Notes--Same-Day Settlement and Payment." ---------------- THE OFFERED NOTES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) CORPORATION(1)(3) - --------------------------------------------------------------------------------------------- Per Offered Note ................ 99.735% 2% 97.735% - --------------------------------------------------------------------------------------------- Total ........................... $74,801,250 $1,500,000 $73,301,250 - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
(1) Plus accrued interest from June 22, 1995, if any. (2) The Corporation has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) Before deduction of expenses payable by the Corporation estimated at $100,000. ---------------- The Offered Notes are offered by the Underwriter, subject to prior sale, when, as and if issued to and accepted by it, subject to approval of certain legal matters by counsel for the Underwriter and certain other conditions. The Underwriter reserves the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. It is expected that delivery of the Offered Notes will be made in book-entry form through the facilities of DTC on or about June 22, 1995. ---------------- MERRILL LYNCH & CO. ---------------- The date of this Prospectus Supplement is June 19, 1995. BANKERS TRUST NEW YORK CORPORATION GENERAL Bankers Trust New York Corporation (the "Corporation") is a bank holding company, incorporated under the laws of the State of New York in 1965. At March 31, 1995, the Corporation had consolidated total assets of $107.4 billion. The Corporation's principal banking subsidiary is Bankers Trust Company ("Bankers"). Bankers, founded in 1903, is among the largest commercial banks in New York City and the United States, based on consolidated total assets. The Corporation concentrates its financial and managerial resources on selected markets and services its clients by meeting their needs for financing, advisory, processing and sophisticated risk management solutions. The core organizational units of the Corporation are the Global Investment Bank, Global Markets Proprietary, Global Investment Management, Global Emerging Markets and Global Assets. Other business activities include real estate finance and principal investing. The Corporation also conducts its own proprietary operations. Among the institutional market segments served are corporations, banks, other financial institutions, governments and agencies, retirement plans, not-for-profit organizations, wealthy individuals, foundations, private companies and individual investors. Bankers originates loans and other forms of credit, accepts deposits, arranges financings and provides numerous other commercial banking and financial services. Bankers provides a broad range of financial advisory services to its clients. It also engages in the proprietary trading of currencies, securities, derivatives and commodities. The Corporation is a legal entity separate and distinct from its subsidiaries, including Bankers. There are various legal limitations governing the extent to which the Corporation's banking subsidiaries may extend credit, pay dividends or otherwise supply funds to, or engage in transactions with, the Corporation or certain of its other subsidiaries. The rights of the Corporation to participate in any distribution of assets of any subsidiary upon its dissolution, winding-up, liquidation or reorganization or otherwise are subject to the prior claims of creditors of that subsidiary, except to the extent that the Corporation may itself be a creditor of that subsidiary and its claims are recognized. Claims on the Corporation's subsidiaries by creditors other than the Corporation include long-term debt and substantial obligations with respect to deposit liabilities, trading liabilities, federal funds purchased, securities sold under repurchase agreements and commercial paper, as well as various other liabilities. The Corporation's principal executive offices are located at 280 Park Avenue, New York, New York 10017 and its telephone number is (212) 250-2500. CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, MARCH 31, ------------------------ ------------- 1990 1991 1992 1993 1994 1994 1995 ---- ---- ---- ---- ---- ------ ------ Excluding Interest on Deposits.... 1.30 1.40 1.44 1.71 1.28 1.34 .73 Including Interest on Deposits.... 1.16 1.22 1.28 1.48 1.21 1.26 .80
For purposes of computing these consolidated ratios, earnings represent income (loss) before income taxes, cumulative effects of accounting changes and equity in undistributed income of unconsolidated subsidiaries and affiliates, plus fixed charges excluding capitalized interest. Fixed charges represent all interest expense (ratios are presented both excluding and including interest on deposits), the portion of net rental expense which is deemed representative of the interest factor, the amortization of debt issuance expense and capitalized interest. For the three months ended March 31, 1995, earnings, as defined, did not cover fixed charges, excluding and including interest on deposits, by $231 million, as a result of a net loss recorded during the period. S-2 CONSOLIDATED RESULTS OF OPERATIONS The Corporation recorded a loss of $122 million for the quarter ended March 31, 1995, or $1.66 primary loss per share, excluding an after-tax provision for severance-related costs of $35 million taken in connection with the Corporation's expense reduction programs. Net loss for the quarter, including the effect of this provision, was $157 million, or $2.11 primary loss per share. In the first quarter of 1994, the Corporation earned $164 million, or $1.90 primary earnings per share. BUSINESS FUNCTIONS ANALYSIS Because the Corporation's business is complex in nature and its operations are highly integrated, it is impractical to segregate the respective contributions of the business functions with precision. For example, the Client Advisory function is difficult to split from the Client Finance function, since most complex financings include both an element of advice and the arrangement of credit for the client. Further, transactions undertaken for purposes of Client Financial Risk Management may contain an element of Client Finance or Trading and Positioning. Finally, the Trading and Positioning function serves as an element of support for client-based activities. As a result, estimates and subjective judgments have been made to apportion revenue and expenses among the business functions. In addition, certain revenue and expenses have been excluded from the business functions because, in the opinion of management, they could not be reasonably allocated or because their attribution to a particular function would be distortive. The following table breaks down earnings on the basis of the Corporation's five business functions, which represent its core business activities and are an important tool for analyzing the results of operations. Detailed definitions of these categories, as well as a discussion of the methodology used to calculate their results, appear in the 1994 Annual Report on Form 10-K. BUSINESS FUNCTIONS PROFITABILITY (IN MILLIONS)
FIRST FIRST QTR. QTR. INCREASE 1995 1994 (DECREASE) ----- ----- ---------- Client Finance................................... $ 14 $ 43 $ (29) Client Advisory.................................. 20 30 (10) Client Financial Risk Management................. (122) 114 (236) Client Transaction Processing.................... 8 32 (24) Trading and Positioning.......................... (36) (49) 13 Unallocated...................................... (41) (6) (35) ----- ---- ----- Income (Loss).................................. $(157) $164 $(321) ===== ==== =====
Client Finance--Client Finance income was $14 million in the first quarter of 1995, down from $43 million in last year's first quarter. This decline was principally attributable to lower levels of securities underwriting and loan syndication fees as general market activity for financings was relatively slower than the year-ago quarter. Client Advisory--Client Advisory income was $20 million in the first quarter of 1995, a decline of $10 million from the prior year's first quarter. This decline was primarily due to a decrease in revenue from funds management activities offset in part by higher revenue from merger and acquisition and financial advisory activities. Client Financial Risk Management--Client Financial Risk Management income decreased by $236 million from the exceptionally strong period last year principally due to a sudden absence of liquidity in S-3 selected emerging markets of Latin America. Additionally, while the volume of transactions from risk management products remained relatively steady, revenue has been reduced as the mix of business has shifted to lower-margin transactions. Client Transaction Processing--Client Transaction Processing income was $8 million in the first quarter of 1995, down $24 million from the prior year's first quarter. This decline was primarily due to a decrease in processing volumes. Also impacting this function was a higher level of expenses in the Corporation's Australian subsidiary. Trading and Positioning--The Corporation recorded a Trading and Positioning net loss of $36 million during the first quarter of 1995 principally due to losses in fixed income securities, primarily in Latin America. In the first quarter of 1994 the Corporation recorded a net loss of $49 million. Unallocated--Included in the unallocated category during the first quarter of 1995 was a $35 million after-tax provision for severance-related costs associated with the expense reduction programs. REVENUE The table below shows net interest revenue, average balances and average rates. The tax equivalent adjustment is made to present the revenue and yields on certain assets, primarily tax-exempt securities and loans, as if such revenue were taxable.
THREE MONTHS ENDED MARCH 31, ---------------- INCREASE 1995 1994 (DECREASE) ------- ------- ---------- Net Interest Revenue (in millions) Book basis................................... $ 182 $ 370 $ (188) Tax equivalent adjustment.................... 15 21 (6) ------- ------- ------- Fully taxable basis.......................... $ 197 $ 391 $ (194) ======= ======= ======= Average Balances (in millions) Interest-earning assets...................... $78,228 $81,037 $(2,809) Interest-bearing liabilities................. 75,642 77,935 (2,293) ------- ------- ------- Earnings assets financed by noninterest-bear- ing funds................................... $ 2,586 $ 3,102 $ (516) ======= ======= ======= Average Rates (fully taxable basis) Yield on interest-earning assets............. 7.09% 6.17% .92% Cost of interest-bearing liabilities......... 6.28 4.38 1.90 ------- ------- ------- Interest rate spread......................... .81 1.79 (.98) Contribution of noninterest-bearing funds.... .21 .17 .04 ------- ------- ------- Net interest margin.......................... 1.02% 1.96% (.94)% ======= ======= =======
Net interest revenue for the first quarter of 1995 totaled $182 million, down $188 million, or 51 percent, from the first quarter of 1994. Of this decline, $176 million was from trading-related net interest revenue. Combined trading revenue and trading-related net interest revenue for the first quarter of 1995 was a loss of $77 million, a $268 million decrease from the first quarter of 1994. The first quarter loss was primarily attributable to losses sustained in the emerging markets of Latin America. The devaluation of the Mexican peso and the associated sudden absence of liquidity adversely affected the Corporation's positions. Additionally, while the volume of transactions from the Corporation's Client Financial Risk Management activities remained relatively steady, revenue has been reduced as the mix of business has shifted to lower-margin transactions. S-4 A significant portion of the Corporation's trading and risk management activities involve positions in interest rate instruments and related derivatives. The revenue from these activities can periodically shift between trading and net interest, depending on a variety of factors, including risk management strategies. Therefore, the Corporation views trading revenue and trading-related net interest revenue together, as quantified below (in millions):
TRADING- RELATED TRADING NET INTEREST REVENUE REVENUE TOTAL ------- ------------ ----- Three months ended March 31, 1995 Interest rate risk........................... $ (57) $ 18 $ (39) Foreign exchange risk........................ (43) -- (43) Equity and commodity risk.................... 22 (17) 5 ----- ---- ----- Total....................................... $ (78) $ 1 $ (77) ===== ==== ===== Three months ended March 31, 1994 Interest rate risk........................... $ 32 $185 $ 217 Foreign exchange risk........................ (110) -- (110) Equity and commodity risk.................... 92 (8) 84 ----- ---- ----- Total....................................... $ 14 $177 $ 191 ===== ==== =====
Interest Rate Risk--The Corporation's positions in interest rate instruments and related derivatives were adversely affected by the general volatility in interest rates that occurred during the first quarter of 1995 coupled with unusual fluctuations and associated liquidity problems in the emerging markets of Latin America. As a result, total trading and trading-related net interest revenue declined $256 million from the exceptionally strong results recorded in the first quarter of 1994. Foreign Exchange Risk--Trading revenue improved compared to the first quarter of 1994, however, the results were negatively affected by the continued volatility in foreign exchange markets which saw the dollar fall to record lows against the mark and yen. Equity and Commodity Risk--The first quarter trading and trading-related net interest revenue was down $79 million compared to the first quarter of 1994. The devaluation of the Mexican peso and continued uncertainty regarding the Argentine economy had a ripple effect on equity prices throughout Latin America. During the quarter actions by the International Monetary Fund, the announcement of economic reforms in Argentina, Brazil and Mexico and considerable public debate about the financial stability in the region contributed to considerable volatility in the markets. S-5 Shown below is a comparison of the components of noninterest revenue (in millions).
THREE MONTHS ENDED MARCH 31, -------------- INCREASE 1995 1994 (DECREASE) ------ ------ ---------- Trading......................................... $ (78) $ 14 $ (92) Fiduciary and funds management.................. 171 188 (17) Fees and commissions Corporate finance fees......................... 72 108 (36) Service charges on deposit accounts............ 19 22 (3) Acceptances and letters of credit commissions.. 10 11 (1) Other.......................................... 44 41 3 ------ ------ ----- Total fees and commissions...................... 145 182 (37) ------ ------ ----- Securities available for sale gains............. 2 4 (2) Other noninterest revenue Insurance premiums............................. 49 55 (6) Net revenue from equity investment transactions.................................. 26 29 (3) Other.......................................... 27 33 (6) ------ ------ ----- Total other noninterest revenue................. 102 117 (15) ------ ------ ----- Total noninterest revenue....................... $ 342 $ 505 $(163) ====== ====== =====
Fiduciary and funds management revenue totaled $171 million for the first quarter, down $17 million, or 9 percent, from the same period last year. Decreased revenue was recorded by most business activities within this revenue category, primarily due to a decline in transaction volumes. Fees and commissions of $145 million decreased by $37 million, or 20 percent, from the first quarter of 1994. Corporate finance fees of $72 million decreased by $36 million from the same period last year, due to lower revenue from securities underwriting and loan syndication fees. These results were partially offset by higher revenue from merger and acquisition and financial advisory activities. The Corporation's securities available for sale gains were $2 million, compared with $4 million in the prior year's first quarter. Other noninterest revenue totaled $102 million, down $15 million, or 13 percent, from the prior year's quarter. This decrease was due to a decline in the category of equity in income of unconsolidated subsidiaries, lower insurance premium revenue as well as lower net gains from sales of equity investments and other assets. These factors were partially offset by a lower level of losses from the revaluation of non-trading foreign currency investments. EXPENSES In response to the lower revenue and reduced market activity in certain businesses, management has implemented a wide range of expense reduction programs. These programs were designed to reduce overall operating expenses (principally, noninterest expenses before bonus and policyholder benefits) by approximately $200 million in 1995. Management anticipates that these actions will result in savings of approximately $275 million in 1996. In order to accomplish these expense reductions, it is anticipated that total staff will be reduced by approximately 1,400, comprised of 1,000 regular staff and 400 temporary employees. In order to provide for appropriate cost of severance, the Corporation has recorded a provision for severance-related cost of $50 million, pre-tax, in the first quarter. As of the end of the first quarter, approximately half of the planned staff reductions had been achieved. The plan will be implemented fully in 1995. S-6 Total noninterest expenses of $734 million increased by $93 million, or 15 percent, from the first quarter of 1994. Excluding the provision for severance- related costs of $50 million, noninterest expenses were $684 million, an increase of $43 million, or 7 percent, from last year's first quarter. Incentive compensation and employee benefits expense decreased $29 million, or 18 percent, due primarily to lower bonus expense reflecting the reduced earnings. Salaries expense increased $31 million, or 18 percent, from the first quarter of 1994. The average number of employees increased by 5 percent versus the same period, up to 14,369, whereas the number of employees at March 31, 1995 decreased by 3 percent, to 14,144 from December 31, 1994 as a result of the initial effect of the expense reduction programs. All other expenses, excluding the provision for severance-related costs, totaled $343 million for the quarter, up $41 million, or 14 percent, from last year's first quarter. Increases in professional fees and agency personnel fees accounted for more than half of this increase. INCOME TAXES Income tax benefit for the first quarter of 1995 amounted to $67 million, compared with income tax expense of $70 million for the first quarter of 1994. The effective tax rate was 30 percent for the current and prior year quarters. PROVISION AND ALLOWANCE FOR CREDIT LOSSES The provision for credit losses is dependent upon management's evaluation as to the amount needed to maintain the allowance for credit losses at a level considered appropriate in relation to the risk of losses inherent in the portfolio. The Corporation recorded $21 million of net charge-offs and a $14 million provision for credit losses in the first quarter of 1995. In the prior year's first quarter, $21 million of net recoveries was recognized and no provision for credit losses was required. Nonrefinancing country net charge-offs for the first quarter of 1995 were $28 million, which included $20 million of loans to highly leveraged borrowers and $8 million of real estate loans, compared with $2 million of nonrefinancing country net recoveries in the prior year's first quarter. Leveraged derivative transaction charge-offs for the quarter were immaterial. Refinancing country recoveries for the first quarter of 1995 were $7 million, compared with $19 million of recoveries in last year's first quarter. The allowance for credit losses, at $1.245 billion at March 31, 1995, was down $7 million from its level at December 31, 1994. The allowance was equal to 127 percent and 126 percent of total cash basis loans at March 31, 1995 and December 31, 1994, respectively. The allowance for credit losses is available for credit losses in the entire portfolio, which is comprised of loans, credit- related commitments, derivatives and other financial instruments. Therefore, the Corporation believes that the allowance must be viewed in its entirety. In the opinion of management, the allowance, when taken as a whole, is adequate to absorb reasonably estimated credit losses inherent in the Corporation's portfolio. On January 1, 1995, the Corporation adopted SFAS 114, "Accounting by Creditors for Impairment of a Loan" as amended by SFAS 118, "Accounting by Creditors for Impairment of a Loan--Income Recognition and Disclosure." SFAS 114 requires the creation of a valuation allowance for impaired loans. Under SFAS 114, a loan is impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the loan's contractual terms. S-7 At March 31, 1995, the recorded investment in loans that was considered to be impaired under SFAS 114 was $1.079 billion which consisted of total cash basis loans and renegotiated loans. Included in this amount was $632 million of impaired loans for which the related valuation allowance was $111 million. RECENT DEVELOPMENTS On March 10, 1995, Moody's Investors Service, Inc. ("Moody's") announced that it had placed the long-term ratings of the Corporation under review for possible downgrade, and on June 14, 1995, Moody's lowered the Corporation's senior debt rating to A2 from A1, its subordinated debt rating to A3 from A2 and its preferred stock rating to "a2" from "a1". On March 13, 1995, Standard and Poor's Rating Group announced that it had revised the ratings outlook of the Corporation to negative from stable. Following the sharp increase in interest rates during the first quarter of 1994, various counterparties that had entered into leveraged derivative transactions with certain subsidiaries of the Corporation experienced losses and some of those counterparties have made claims against the Corporation. The Corporation has settled some of the claims made by certain counterparties and is contesting allegations made by others, including Procter & Gamble. In connection with these developments, during the fourth quarter of 1994, the Corporation placed on a cash basis $423 million of leveraged derivative transactions which had been reclassified as receivables in its loan account. Of this amount, the Corporation concurrently charged off $72 million to its allowance for credit losses. Approximately one half of the remainder relates to transactions with Procter & Gamble. With these transfers and charge-offs, the Corporation has reclassified those leveraged derivative transactions that, in its judgment, are not likely to perform according to the applicable contracts and has charged off the balances it deemed to be uncollectible. However, there can be no assurance that there will not be other such actions or claims in the future. BT Securities Corporation ("BT Securities"), a subsidiary of the Corporation, has entered into a settlement agreement with the Securities and Exchange Commission (the "SEC") and the Commodity Futures Trading Commission (the "CFTC") concerning all investigations of the Corporation and its subsidiaries by those agencies with respect to the conduct of its privately negotiated over- the-counter derivatives (the "Derivatives") business. As part of that settlement entered into on December 22, 1994, the SEC and the CFTC agreed not to further pursue Bankers Trust related entities concerning Derivatives matters prior to the settlement date (although they did reserve the right to pursue individuals), and BT Securities paid $10 million in civil penalties and agreed to and has retained independent consultants to examine its conduct of the Derivatives business. The Corporation also has agreed to implement the consultants' recommendations. The Corporation, Bankers and BT Securities have also entered into a Written Agreement with the Federal Reserve Bank of New York and a Memorandum of Understanding with the New York State Banking Department concerning the Corporation's leveraged derivative transactions business, both of which call for an independent counsel review. The Corporation cannot predict the effect on the derivatives business generally, or the Corporation's derivatives business in particular, of these events or of the current legislative, regulatory and media attention being given to the derivatives industry. Details with respect to the foregoing are set forth in the Corporation's Annual Report on Form 10-K for the year ended December 31, 1994 which is incorporated herein by reference. S-8 SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION The following selected consolidated financial data at and for each of the three years ended December 31, 1992, 1993 and 1994 have been derived from and are qualified in their entirety by the detailed financial information and consolidated financial statements of the Corporation included in its Annual Report on Form 10-K for the year ended December 31, 1994 which is incorporated herein by reference. The consolidated financial data at and for each of the three months ended March 31, 1994 and 1995 is unaudited but, in the opinion of management, all material adjustments necessary for a fair presentation of its results of operations for such periods have been made. All such adjustments were of a normal recurring nature. The results for the three months ended March 31, 1995 are not necessarily indicative of the results for the full year or any other interim period.
AT OR FOR THE AT OR FOR THE THREE MONTHS ENDED YEAR ENDED DECEMBER 31, MARCH 31, ------------------------- -------------------- 1992 1993 1994 1994 1995 ------- ------- ------- --------- --------- ($ IN MILLIONS, EXCEPT PER SHARE DATA) Condensed Consolidated State- ment of Income: Interest revenue............. $ 4,219 $ 4,436 $ 5,030 $ 1,211 $ 1,353 Interest expense............. 3,072 3,122 3,858 841 1,171 ------- ------- ------- --------- --------- Net interest revenue......... 1,147 1,314 1,172 370 182 Provision for credit losses.. 225 93 25 -- 14 ------- ------- ------- --------- --------- Net interest revenue after provision for credit loss- es.......................... 922 1,221 1,147 370 168 Noninterest revenue.......... 2,331 3,364 2,473 505 342 Noninterest expenses......... 2,347 3,035 2,751 641 734 ------- ------- ------- --------- --------- Income (loss) before income taxes and cumulative ef- fects of accounting changes..................... 906 1,550 869 234 (224) Income taxes................. 267 480 254 70 (67) ------- ------- ------- --------- --------- Income (loss) before cumula- tive effects of accounting changes..................... 639 1,070 615 164 (157) Cumulative effects of ac- counting changes (1)........ 446 (75) -- -- -- ------- ------- ------- --------- --------- Net income (loss)............ $ 1,085 $ 995 $ 615 $ 164 $ (157) ======= ======= ======= ========= ========= Net income (loss) applicable to common stock............. $ 1,055 $ 972 $ 587 $ 159 $ (165) ======= ======= ======= ========= ========= Per Common Share Data: Primary earnings (loss) per share Income (loss) before cumu- lative effects of account- ing changes................ $ 7.23 $ 12.40 $ 7.17 $ 1.90 $ (2.11) Net income (loss)........... 12.53 11.51 7.17 1.90 (2.11) Fully diluted earnings (loss) per share Income (loss) before cumu- lative effects of account- ing changes................ 7.22 12.29 7.17 1.90 (2.11) Net income (loss)........... 12.51 11.41 7.17 1.90 (2.11) Cash dividends declared...... 2.88 3.24 3.70 .90 1.00 --as a percentage of net income (2)................. 40% 26% 52% 47% N/M Book value (3)............... 43.23 51.90 53.67 52.41 50.04 Profitability Ratios: Return on average common stockholders' equity (2).... 19.52% 26.33% 13.48% 14.85% N/M Return on average total as- sets (2).................... .86 1.25 .59 .61 N/M Consolidated Balances, End of Period: Trading assets............... $29,908 $48,276 $47,514 $ 56,173 $ 51,603 Loans........................ 17,318 15,200 12,501 13,659 11,731 Total assets................. 72,886 92,082 97,016 103,721 107,362 Deposits..................... 25,071 22,776 24,939 20,049 24,596 Securities sold under repur- chase agreements............ 17,451 23,834 15,617 25,842 18,631 Other short-term borrowings.. 11,779 18,992 18,222 17,480 16,396 Long-term debt............... 3,992 5,597 6,455 5,693 6,621 Common stockholders' equity.. 3,621 4,284 4,309 4,295 4,029 Total stockholders' equity... 4,121 4,534 4,704 4,745 4,668 Consolidated Capital Ratios, End of Period: Common stockholders' equity to total assets............. 4.97% 4.65% 4.44% 4.14% 3.75% Total stockholders' equity to total assets............. 5.65 4.92 4.85 4.57 4.35 Risk-based capital ratios (1992 year-end guide- lines)(4) Tier 1 Capital............. 7.75 8.50 9.05 8.89 8.73 Total Capital.............. 13.64 14.46 14.77 14.66 14.20 Leverage Ratio............... 6.05 6.28 5.26 5.39 5.18 EMPLOYEES..................... 12,917 13,571 14,529 13,748 14,144
- -------- (1) The Corporation adopted the accounting standards for postretirement benefits other than pensions (SFAS 106) and post-employment benefits (SFAS 112) effective January 1, 1993, and for income taxes (SFAS 109) effective January 1, 1992. (2) These figures exclude the cumulative effects of accounting changes recorded in 1992 and 1993. (3) This calculation includes the effect of common shares issuable under deferred stock awards. (4) The 1992 ratios were not restated in connection with the retroactive adoption of SFAS 109. At both December 31, 1994 and December 31, 1993, all three regulatory capital ratios excluded any benefit from the adoption of SFAS 115. N/M Not Meaningful S-9 CERTAIN TERMS OF THE OFFERED NOTES GENERAL The Corporation's 7 1/2% Subordinated Notes due 2010 offered hereby (the "Offered Notes") will be limited to $75,000,000 aggregate principal amount and will mature on June 15, 2010. The Offered Notes will be issued pursuant to an Indenture, dated as of April 1, 1992, between the Corporation and Marine Midland Bank (formerly Marine Midland Bank, N.A.), as Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture thereto, dated as of January 15, 1993, between the Corporation and the Trustee (collectively, the "Subordinated Indenture"). The Offered Notes will bear interest at the rate of 7 1/2% per annum from June 22, 1995, payable monthly in arrears on the 15th day of each month in each year, beginning on July 15, 1995, to the persons in whose names the Offered Notes (or any predecessor Offered Notes) are registered at the close of business on the 1st day of each such month commencing on July 1, 1995. The Offered Notes will be issued in fully registered form, in denominations of $1,000 and integral multiples of $1,000 in excess thereof. The paying agent, registrar and transfer agent for the Offered Notes will be the corporate trust department of Bankers in The City of New York. Reference should be made to the Prospectus for a description of other terms of the Offered Notes and the information contained herein concerning the Offered Notes is qualified by reference to the provisions of the Indenture, including the definitions therein of certain terms. See "Description of Debt Securities." Defined terms used but not defined in this Prospectus Supplement have the meanings ascribed to them in the Prospectus. OPTIONAL REDEMPTION The Offered Notes may not be redeemed prior to June 15, 2000. On or after such date all, but not less than all, of the Offered Notes may be redeemed at the option of the Corporation semi-annually on each June 15 and December 15 upon at least 30 days' notice at par plus accrued interest to the date fixed for redemption, all in accordance with the Subordinated Indenture. BOOK-ENTRY SYSTEM The Offered Notes will be issued in the form of one or more fully registered Global Debt Securities (collectively, the "Global Security"), which will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"), as depository for the Global Security, and registered in the name of DTC's nominee. Transfers or exchanges of beneficial interests in the Global Security may be effected only through a participating member of DTC. Under certain limited circumstances Offered Notes may be issued in certificated form in exchange for the Global Security. See "Description of Debt Securities-- Global Debt Securities" in the Prospectus accompanying this Prospectus Supplement. In the event that Offered Notes are issued in certificated form, such Offered Notes may be transferred or exchanged at the offices described in the second following paragraph. Payment of principal of, and interest on, Offered Notes registered in the name of DTC or its nominee will be made to DTC or its nominee, as the case may be, as the registered owner of the Global Security. None of the Corporation, the Trustee, any Paying Agent or any other agent of the Corporation or 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 in the Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. In the event that Offered Notes are issued in certificated form, principal and interest will be payable, the transfer of the Offered Notes will be registrable and Offered Notes will be exchangeable for Offered Notes bearing identical terms and provisions at the office of the agent of the Corporation in The City of New York designated for such purpose, provided that payment of interest may be made at the option of the Corporation by check mailed to the address of the person entitled thereto. S-10 SAME-DAY SETTLEMENT AND PAYMENT Settlement for the Offered Notes will be made by the Underwriter in immediately available funds. All payments of principal and interest will be made by the Corporation in immediately available funds or the equivalent, so long as the Depository continues to make its Same-Day Funds Settlement System available to the Corporation. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearinghouse or next-day funds. In contrast, the Offered Notes will trade in the Depository's Same-Day Funds Settlement System, and secondary market trading activity in the Offered Notes will therefore be required by the Depository to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Offered Notes. SUBORDINATION THE OFFERED NOTES WILL BE SUBJECT TO THE SUBORDINATION PROVISIONS AS SET FORTH IN THE SUBORDINATED INDENTURE AND DESCRIBED IN "DESCRIPTION OF DEBT SECURITIES--SUBORDINATION--SUBORDINATED DEBT SECURITIES" IN THE PROSPECTUS AS SUPPLEMENTED BELOW. For the purposes of the Offered Notes, "Existing Subordinated Indebtedness" means the Corporation's 6.00% Subordinated Notes due October 15, 2008, 7.50% Convertible Capital Securities due 2033, Subordinated LIBOR/CMT Floating Rate Debentures due 2003, Subordinated Floating Rate Notes due 2005, Subordinated Constant Maturity Treasury Floating Rate Debentures due 2003, 7.25% Subordinated Debentures due January 15, 2003, Subordinated Floating Rate Notes due 2002, 7 1/8% Subordinated Debentures due July 31, 2002, 8 1/8% Subordinated Debentures due May 15, 2002, 7.50% Subordinated Debentures due January 15, 2002, 9.00% Subordinated Debentures due August 1, 2001, 9.40% Subordinated Debentures due March 1, 2001, 9.50% Subordinated Debentures due June 14, 2000, Zero Coupon Subordinated Yen Notes due 1997-2004, Subordinated Floating Rate Notes due 2004, 9.20% Subordinated Capital Notes due July 15, 1999, Subordinated Money Market Capital Notes, Series A, B and C due 1999, 8% Subordinated Debentures due March 15, 1997, 8 1/4% Subordinated Debentures due July 2, 1996, 8 1/8% Subordinated Notes due 2002 and 8 1/4% Subordinated Notes due 2005. As of March 31, 1995, Senior Indebtedness and Other Financial Obligations of the Corporation aggregated approximately $13 billion. The Subordinated Indenture does not limit or prohibit the incurrence of additional Senior Indebtedness, which may include indebtedness that is senior to the Offered Notes but subordinate to other obligations of the Corporation, including obligations of the Corporation in respect of Other Financial Obligations. EXPERTS The consolidated financial statements of the Corporation for the year ended December 31, 1994, appearing in the Annual Report on Form 10-K for the year ended December 31, 1994, and incorporated by reference in this Prospectus Supplement, the accompanying Prospectus and the Registration Statement, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in auditing and accounting. VALIDITY OF OFFERED NOTES The validity of the Offered Notes will be passed upon for the Corporation by Gordon S. Calder, Jr., Esq., a Managing Director and Counsel of Bankers, and for the Underwriter by White & Case, New York, New York. White & Case performs services for the Corporation from time to time. Mr. Calder has an interest in a number of shares equal to less than 0.015 percent of the Corporation's outstanding common stock. The foregoing supersedes "Validity of Offered Securities" in the Prospectus. S-11 UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement dated June 19, 1995 (the "Underwriting Agreement"), between the Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), the Corporation has agreed to sell to the Underwriter, and the Underwriter has agreed to purchase, the entire principal amount of the Offered Notes. In the Underwriting Agreement, the Underwriter has agreed, subject to the terms and conditions set forth therein, to purchase all the Offered Notes offered hereby if any Offered Notes are purchased. The Corporation has been advised by the Underwriter that the Underwriter proposes initially to offer the Offered Notes to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and to certain dealers at such price less a concession not in excess of 1.5% of the principal amount. The Underwriter may allow, and such dealers may reallow, a discount not in excess of .5% of the principal amount to certain other dealers. After the initial public offering, the public offering price, concession and discount may be changed. The Corporation has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Corporation has been advised by the Underwriter that the Underwriter presently intends to make a market in the Offered Notes, although the Underwriter is under no obligation to do so and the Underwriter may discontinue any such market making at any time in its sole discretion. Accordingly, no assurance can be given as to the liquidity of, or the trading markets for, the Offered Notes. This Prospectus Supplement and the accompanying Prospectus may also be delivered in connection with sales of the Offered Notes by affiliates of the Corporation that have acquired such Offered Notes. The Underwriter and certain of its associates and affiliates may be customers of (including borrowers from), engage in transactions with, and/or perform services for the Corporation and its subsidiaries (including Bankers) in the ordinary course of business. S-12 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE OFFERED NOTES OFFERED HEREBY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ---------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Bankers Trust New York Corporation......................................... S-2 Selected Consolidated Financial Data and Other Information................. S-9 Certain Terms of the Offered Notes......................................... S-10 Experts.................................................................... S-11 Validity of Offered Notes.................................................. S-11 Underwriting............................................................... S-12 PROSPECTUS Available Information...................................................... 2 Incorporation of Certain Documents by Reference.............................................................. 2 Bankers Trust New York Corporation......................................... 3 Use of Proceeds............................................................ 4 Description of Debt Securities............................................. 4 Foreign Currency Risks..................................................... 12 Description of Series Preferred Stock...................................... 13 Depositary Shares.......................................................... 16 Description of the Corporation's Capital Stock............................................................. 18 Validity of Offered Securities............................................. 23 Experts.................................................................... 24 Plan of Distribution....................................................... 24
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $75,000,000 BANKERS TRUST NEW YORK CORPORATION 7 1/2% SUBORDINATED NOTES DUE 2010 ---------------- PROSPECTUS SUPPLEMENT ---------------- MERRILL LYNCH & CO. JUNE 19, 1995 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----