BGCOLOR="#FFFFFF" LINK=BLUE VLINK=PURPLE>
QuickLinks-- Click here to
rapidly navigate through this document
As filed with the Securities and Exchange Commission on November
25, 2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TARGET CORPORATION
(Exact name of registrant as specified in its
charter)
1000 Nicollet Mall
Minneapolis, Minnesota 55403-2467
(612) 304-6073
(Address, including zip code, and telephone number,
including
area code, of registrant's principal executive offices)
Catherine R. Smith
Executive Vice President and
Chief Financial Officer
Target Corporation
1000 Nicollet Mall
Minneapolis, Minnesota 55403-2467
(612) 304-6073
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this
registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check
the following box. o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. ý
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following box. ý
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the
following box. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or
a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
CALCULATION OF REGISTRATION FEE
PROSPECTUS
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Securities Warrants
We will provide the specific terms of these securities in
supplements to this prospectus. You should read this prospectus and
the applicable prospectus supplement carefully before you
invest.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
Investing in our securities involves risks. You should consider
the risk factors referred to on page 4 of this prospectus and as
described in any documents that we incorporate by reference in this
prospectus.
This prospectus is dated November 25, 2015.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, or the "
SEC," using a "shelf" registration procedure. Under this
shelf procedure, we may sell
debt securities,
preferred stock,
depositary shares,
common stock, and
securities warrants,
either separately or in units, in one or more offerings. This
prospectus provides you with a general description of those
securities. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about
the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You
should read this prospectus and the applicable prospectus
supplement together with the additional information described under
the heading "Where You Can Find More Information."
We may also prepare free writing prospectuses to describe the
terms of particular securities, which terms may vary from those
described in this prospectus. Any free writing prospectus should
therefore be carefully reviewed in connection with this prospectus
and with any prospectus supplement referred to therein. A free
writing prospectus will not constitute a part of this
prospectus.
The registration statement that contains this prospectus
(including the exhibits to the registration statement) contains
additional information about our company and the securities offered
under this prospectus. That registration statement can be read at
the SEC web site or at the SEC offices mentioned under the heading
"Where You Can Find More Information."
The distribution of this prospectus and the applicable
prospectus supplement and the offering of the securities in certain
jurisdictions may be restricted by law. Persons into whose
possession this prospectus and the applicable prospectus supplement
come should inform themselves about and observe any such
restrictions. This prospectus and the applicable prospectus
supplement do not constitute, and may not be used in connection
with, an offer or solicitation by anyone in any jurisdiction in
which such offer or solicitation is not authorized or in which the
person making such offer or solicitation is not qualified to do so
or to any person to whom it is unlawful to make such offer or
solicitation.
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. Our SEC filings are available
to the public through the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file
with the SEC at its Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You can also obtain copies of the documents
at prescribed rates by writing to the Office of Investor Education
and Advocacy of the SEC at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities.
Our SEC filings are also available at the office of the New York
Stock Exchange. For further information on obtaining copies of our
public filings at the New York Stock Exchange, you should call
(212) 656-3000.
We "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is an important part of
this prospectus. Some information contained in this prospectus
updates the information incorporated by reference into this
prospectus, and information that we file subsequently with the SEC
will automatically update information in this prospectus as well as
our other filings with the SEC. In other words, in the case of a
conflict or inconsistency between information set forth in this
prospectus and/or information incorporated by reference into this
prospectus, you should rely on the information contained in the
document that was filed later. We incorporate by reference the
documents listed below and any filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the initial filing
of the registration statement that contains this prospectus and
prior to the time that we sell all the securities offered under
this prospectus (other than any documents or any portions of any
documents that are not deemed "filed" under the Exchange Act in
accordance with the Exchange Act and applicable SEC rules):
Annual Report on Form 10-K for the fiscal year ended January
31, 2015 (including information specifically incorporated by
reference into our Form 10-K from our 2014 Annual Report to
Shareholders and our definitive Notice and Proxy Statement for our
2015 Annual Meeting of Shareholders);
Quarterly Reports on Form 10-Q for the quarters ended May 2,
2015, August 1, 2015 and October 31, 2015;
Current Reports on Form 8-K filed March 10, 2015, June 12,
2015, June 15, 2015, June 25, 2015, August 12, 2015, August 17,
2015 and November 12, 2015; and
the description of the Company's common stock contained in the
Registration Statement on Form 8-A filed in connection with the
Company's common stock.
You may request a copy of these filings (other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing) at no cost, by writing to or
telephoning us at the following address:
You should rely only on the information incorporated by
reference or set forth in this prospectus or the applicable
prospectus supplement. We have not authorized anyone else to
provide you with additional or different information. We may only
use this prospectus to sell securities if it is accompanied by a
prospectus supplement. We are only offering these securities in
states where the offer is permitted. You should not assume that the
information in this prospectus or the applicable prospectus
supplement is accurate as of any date other than the dates on the
front of those documents.
3
THE COMPANY
Target Corporation offers our customers, referred to as "
guests," everyday essentials and fashionable, differentiated
merchandise at discounted prices. Our ability to deliver a
preferred shopping experience to our guests is supported by our
supply chain and technology infrastructure, an ingrained devotion
to innovation, and our disciplined approach to managing our
business and investing in future growth. As of October 31, 2015, we
operated 1,805 stores in 49 states and the District of
Columbia.
Prior to the first quarter of 2013, we operated a U.S. Credit
Card Segment that offered credit to qualified guests through our
Target branded credit cards. In the first quarter of 2013, we sold
our U.S. consumer credit card portfolio, and TD Bank Group ("
TD") now underwrites, funds and owns Target branded credit
cards and related consumer receivables in the U.S. We perform
account servicing and primary marketing functions and earn a
substantial portion of the profits generated by the portfolio.
Prior to January 15, 2015, we operated a Canadian segment. On
January 15, 2015, we announced our exit from the Canadian market
and Target Canada Co. and certain other wholly owned subsidiaries
of Target filed for protection (the "
Filing") in Canada under the Companies' Creditors
Arrangement Act with the Ontario Superior Court of Justice in
Toronto. Following the Filing, we no longer consolidate our
Canadian retail operation. Canadian financial results prior to the
Filing are included in our financial statements and classified
within discontinued operations.
Effective January 15, 2015, we operate as a single segment that
includes all of our continuing operations, which are designed to
enable guests to purchase products seamlessly in stores, online or
through mobile devices.
When we refer to "
our company," "
we," "
our" and "
us" in this prospectus under the headings "Our Company,"
"Use of Proceeds" and "Ratio of Earnings to Fixed Charges," we mean
Target Corporation and its subsidiaries. When these terms are used
elsewhere in this prospectus, we mean Target Corporation (parent
company only) unless the context indicates otherwise.
RISK FACTORS
Your investment in our securities involves risks. Before
purchasing any securities, you should carefully consider the risk
factors incorporated by reference in this prospectus, including the
risk factors contained in our annual and quarterly reports. You
should consult your financial, legal, tax and other professional
advisors as to the risks associated with an investment in our
securities and the suitability of the investment for you.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus
supplement, the net proceeds from the sale of the offered
securities will be added to our general funds and may be used
to:
meet our working capital requirements;
fund capital expenditures relating to the construction and
fixturing of our new stores;
remodel our existing stores;
refinance debt; and
finance share repurchases and acquisitions of real estate,
other assets and companies.
Until the net proceeds have been used, they may be invested in
short-term investments.
4
RATIOS OF EARNINGS TO FIXED CHARGES
For purposes of calculating the ratios, fixed charges consist
of:
interest on debt and capital leases (including capitalized
interest);
amortization of debt issuance costs; and
the interest portion of rental expense.
Fixed charges do not include interest income and interest
associated with unrecognized tax benefits, which is recorded within
income tax expense.
The ratio of earnings to fixed charges is calculated as
follows:
As of the date of this prospectus, we have no preferred stock
outstanding, and accordingly, the ratio of earnings to combined
fixed charges and preferred stock dividends is equal to the ratio
of earnings to fixed charges and is not separately disclosed.
5
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the
debt securities. A prospectus supplement will describe the specific
terms of the debt securities offered through that prospectus
supplement and any general terms outlined in this section that will
not apply to those debt securities.
Unless otherwise specified in the applicable prospectus
supplement, the debt securities will be issued under an indenture
dated as of August 4, 2000 between us and The Bank of New York
Mellon Trust Company, National Association (successor to Bank One
Trust Company, N.A.), as trustee, as supplemented by the first
supplemental indenture dated as of May 1, 2007 and as further
amended or supplemented from time to time, referred to herein as
the "
indenture." As used in this prospectus, "
debt securities" means the debentures, notes, bonds and
other evidences of indebtedness that we issue and the trustee
authenticates and delivers under the indenture.
We have summarized the material terms and provisions of the
indenture in this section. We have also filed the indenture as an
exhibit to the registration statement of which this prospectus is a
part. You should read the indenture for additional information
before you buy any debt securities. The summary that follows
includes references to section numbers of the indenture so that you
can more easily locate these provisions.
General
The debt securities will be our direct, senior, unsecured
obligations. The indenture does not limit the amount of debt
securities that we may issue and permits us to issue debt
securities from time to time. Debt securities issued under the
indenture will be issued as part of a series that has been
established by us under the indenture. (Section 301) Unless a
prospectus supplement relating to debt securities states otherwise,
the indenture and the terms of the debt securities will not contain
any covenants designed to afford holders of any debt securities
protection in a highly leveraged or other transaction involving us
that may adversely affect holders of the debt securities.
A prospectus supplement relating to a series of debt securities
being offered will include specific terms relating to the offering.
(Section 301) These terms will include some or all of the
following:
the title and type of the debt securities;
any limit on the total principal amount of the debt
securities;
the price at which the debt securities will be issued;
the date or dates on which the principal of and premium, if
any, on the debt securities will be payable;
the maturity date or dates of the debt securities;
if the debt securities will bear interest:
the interest rate on the debt securities or the method by which
the interest rate can be determined;
the date from which interest will accrue;
the record and interest payment dates for the debt
securities;
any circumstances under which we may defer interest
payments;
if the amount of principal or interest payable on the debt
securities will be determined by reference to one or more indices,
securities or baskets of securities, commodities or baskets of
6
commodities, currency exchange rates, or any other market
measure, information as to such indices, securities, commodities,
baskets, currencies, or other market measures;
any place or places where:
the debt securities can be surrendered for registration of
transfer or exchange, and
notices and demands can be given to us relating to the debt
securities or under the indenture, in addition to those specified
herein;
any optional redemption provisions that would permit us to
elect redemption of the debt securities, or the holders of the debt
securities to elect repayment of the debt securities, prior to
their final maturity, including the identity of the quotation
agent, if applicable;
any sinking fund provisions that would obligate us to redeem
the debt securities prior to their final maturity;
the currency or currencies in which the debt securities will be
denominated and payable, if other than U.S. dollars;
any provisions that would permit us or the holders of the debt
securities to elect the currency or currencies in which the debt
securities are paid;
whether the provisions described under the heading "Defeasance"
below will not apply to the debt securities;
any additional events of default or covenants;
if the debt securities will be issued in whole or in part in
the form of global securities, the extent to which the description
of the book-entry procedures described below under "Book-Entry,
Delivery and Form" will not apply to such global securitiesa "
global security" means a debt security that we issue in
accordance with the indenture to represent all or part of a series
of debt securities;
if the debt securities will be convertible into or exchangeable
for our common stock, preferred stock, or other debt securities at
our option or the option of the holders of the debt securities, the
provisions relating to such conversion or exchange;
the identity of the security registrar and paying agent for the
debt securities, if other than The Bank of New York Mellon Trust
Company, National Association;
any special tax implications of the debt securities; and
any other terms of the debt securities.
A "
holder" means, with respect to a registered security, the
person in whose name the registered security is registered in the
security register. (Section 101)
Unless otherwise specified in the applicable prospectus
supplement, we may, without the consent of the holders of a series
of debt securities, issue additional debt securities of that series
having the same interest rate, maturity date and other terms
(except for the price to public and issue date) as such debt
securities. Any such additional debt securities, together with the
initial debt securities, will constitute a single series of debt
securities under the indenture.
Unless we specify otherwise in the applicable prospectus
supplement, we will not pay any additional amounts on the debt
securities offered thereby to compensate any beneficial owner for
any United States tax withheld from payments on such debt
securities.
7
Exchange and Transfer
Any debt securities of a series may be exchanged for other debt
securities of that series so long as the other debt securities are
denominated in authorized denominations and have the same aggregate
principal amount and same terms as the debt securities that were
surrendered for exchange. The debt securities may be presented for
registration of transfer, duly endorsed or accompanied by a
satisfactory written instrument of transfer, at the office or
agency maintained by us for that purpose in New York, New York or
any other place of payment. However, holders of global securities
may transfer and exchange global securities only in the manner and
to the extent set forth under "Book Entry, Delivery and Form"
below. There will be no service charge for any registration of
transfer or exchange of the debt securities, but we may require
holders to pay any tax or other governmental charge payable in
connection with a transfer or exchange of the debt securities.
(Sections 305, 1002) If the applicable prospectus supplement refers
to any office or agency, in addition to the security registrar,
initially designated by us where holders can surrender the debt
securities for registration of transfer or exchange, we may at any
time rescind the designation of any such office or agency or
approve a change in the location. However, we will be required to
maintain an office or agency in each place of payment for that
series. (Section 1002)
We will not be required to:
register the transfer of or exchange debt securities to be
redeemed for a period of 15 calendar days preceding the mailing of
the relevant notice of redemption; or
register the transfer of or exchange any registered debt
security selected for redemption, in whole or in part, except the
unredeemed or unpaid portion of that registered debt security being
redeemed in part. (Section 305)
Interest and Principal Payments
Payments.Holders may present debt securities for payment of
principal, premium, if any, and interest, if any, register the
transfer of the debt securities and exchange the debt securities at
the office or agency maintained by us for that purpose. On the date
of this prospectus, that office is located at c/o The Bank of New
York Mellon, 101 Barclay Street, New York, New York 10286, Attn:
Corporate Trust Window. We refer to The Bank of New York Mellon
Trust Company, National Association, acting in this capacity for
the debt securities, as the "
paying agent."
Any money that we pay to the paying agent for the purpose of
making payments on the debt securities and that remains unclaimed
two years after the payments were due will, at our request, be
returned to us and after that time any holder of a debt security
can only look to us for the payments on the debt security. (Section
1003)
Recipients of Payments.The paying agent will pay interest to
the person in whose name the debt security is registered at the
close of business on the applicable record date. Unless otherwise
specified in the applicable prospectus supplement, the "
record date" means, for any interest payment date, the date
15 calendar days prior to that interest payment date, whether or
not that day is a business day. However, upon maturity, redemption
or repayment, the paying agent will pay any interest due to the
person to whom it pays the principal of the debt security. The
paying agent will make the payment on the date of maturity,
redemption or repayment, whether or not that date is an interest
payment date. An "
interest payment date"means, for any debt security, a date
on which, under the terms of that debt security, regularly
scheduled interest is payable.
Book-Entry Debt Securities.The paying agent will make
payments of principal, premium, if any, and interest, if any, to
the account of The Depository Trust Company, referred to herein as
"
DTC," or any other depositary specified in the applicable
prospectus supplement, as holder of book-entry debt securities, by
wire transfer of immediately available funds. We expect that the
depositary, upon receipt
8
of any payment, will immediately credit its participants'
accounts in amounts proportionate to their respective beneficial
interests in the book-entry debt securities as shown on the records
of the depositary. We also expect that payments by the depositary's
participants to owners of beneficial interests in the book-entry
debt securities will be governed by standing customer instructions
and customary practices and will be the responsibility of those
participants.
Certificated Debt Securities.Except as indicated below for
payments of interest at maturity, redemption or repayment, the
paying agent will make payments of interest either:
by check mailed to the address of the person entitled to
payment as shown on the security register; or
by wire transfer to an account designated by a holder, if the
holder has given written notice not later than 10 calendar days
prior to the applicable interest payment date. (Section 307)
Payments of principal, premium, if any, and interest, if any,
upon maturity, redemption or repayment on a debt security will be
made in immediately available funds against presentation and
surrender of the debt security at the office of the paying
agent.
Discount Debt Securities.Some debt securities may be
considered to be issued with original issue discount, which for
these purposes includes a debt security which provides for an
amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of maturity. We refer to these
debt securities as "
discount notes." In the event of a redemption or repayment
of any discount note or if the principal of any debt security that
is considered to be issued with original issue discount is declared
to be due and payable immediately as described under "Events of
Default" below, the amount of principal due and payable on that
debt security will be limited to:
the aggregate principal amount of the debt security multiplied
by the sum of
its issue price, expressed as a percentage of the aggregate
principal amount, plus
the original issue discount amortized from the date of issue to
the date of declaration, expressed as a percentage of the aggregate
principal amount.
For purposes of determining the amount of original issue
discount that has accrued as of any date on which a redemption,
repayment or acceleration of maturity occurs for a discount note,
original issue discount will be accrued using a constant yield
method. The constant yield will be calculated using a 30-day month,
360-day year convention, a compounding period that, except for the
initial period (as defined below), corresponds to the shortest
period between interest payment dates for the applicable discount
note (with ratable accruals within a compounding period), and an
assumption that the maturity of a discount note will not be
accelerated. If the period from the date of issue to the first
interest payment date for a discount note (the "
initial period") is shorter than the compounding period for
the discount note, a proportionate amount of the yield for an
entire compounding period will be accrued. If the initial period is
longer than the compounding period, then the period will be divided
into a regular compounding period and a short period with the short
period being treated as provided in the preceding sentence. The
accrual of the applicable original issue discount discussed above
may differ from the accrual of original issue discount for purposes
of the Internal Revenue Code of 1986, as amended.
Certain Definitions.The following are definitions of certain
terms we use in this prospectus when discussing principal and
interest payments on the debt securities:
A "
business day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in New York, New York.
9
The "
depositary" means the depositary for global securities
issued under the indenture and, unless provided otherwise in the
applicable prospectus supplement, means DTC.
"
Euro LIBOR debt securities" means LIBOR debt securities for
which the index currency is the euro.
"
London banking day" means any day on which dealings in
deposits in the relevant index currency are transacted in the
London interbank market.
"
TARGET Settlement Day" means any day on which the
Trans-European Automated Real-time Gross settlement Express
Transfer system is open.
References in this prospectus to "
U.S. dollar," "
U.S.$" or "
$" are to the currency of the United States of America.
References in this prospectus to "
euro" are to the single currency introduced at the
commencement of the third stage of the European Economic and
Monetary Union pursuant to the Treaty establishing the European
Community, as amended. References in this prospectus to "
£," "
pounds sterling" or "
sterling" are to the currency of the United Kingdom.
Fixed Rate Debt Securities
Each fixed rate debt security will bear interest from the date
of issuance at the annual rate specified in the applicable
prospectus supplement until the principal is paid or made available
for payment. Unless otherwise specified in the applicable
prospectus supplement, the following provisions will apply to fixed
rate debt securities offered pursuant to this prospectus.
How Interest Is Calculated.Interest on fixed rate debt
securities will be computed on the basis of a 360-day year of
twelve 30-day months.
When Interest Is Paid.Payments of interest on fixed rate
debt securities will be made on the interest payment dates
specified in the applicable prospectus supplement.
Amount Of Interest Payable.Interest payments for fixed rate
debt securities will include accrued interest from and including
the issue date (or any other date specified in the applicable
prospectus supplement) or from and including the last interest
payment date in respect of which interest has been paid or provided
for, as the case may be, to but excluding the relevant interest
payment date or date of maturity or earlier redemption or
repayment, as the case may be.
If A Payment Date Is Not A Business Day.If any interest
payment date is not a business day, we will pay interest on the
next business day, and no interest will accrue as a result of the
delay. If the maturity date or date of redemption or repayment is
not a business day, we will pay interest, if any, and principal and
premium, if any, on the next business day, and no additional
interest will accrue as a result of the delay.
Floating Rate Debt Securities
Unless otherwise specified in the applicable prospectus
supplement, the following provisions will apply to floating rate
debt securities offered pursuant to this prospectus.
Each floating rate debt security will bear interest at a
floating rate determined by reference to an interest rate or
interest rate formula, which we refer to as the "
base rate." The base rate may be one or more of the
following:
the commercial paper rate;
the federal funds rate;
10
the prime rate;
the Treasury rate;
the CMT rate; or
any other rate or interest rate formula specified in the
applicable prospectus supplement.
Formula For Interest Rates.The interest rate on each
floating rate debt security will be calculated by reference to:
the specified base rate based on the index maturity;
plus or minus the spread, if any; and/or
multiplied by the spread multiplier, if any.
For any floating rate debt security, "
index maturity" means the period of maturity of the
instrument or obligation from which the base rate is calculated and
will be specified in the applicable prospectus supplement. The "
spread" is the number of basis points (one one-hundredth of
a percentage point) specified in the applicable prospectus
supplement to be added to or subtracted from the base rate for a
floating rate debt security. The "
spread multiplier" is the percentage specified in the
applicable prospectus supplement to be applied to the base rate for
a floating rate debt security.
Limitations On Interest Rate.A floating rate debt security
may be subject to the following limitations on the interest
rate:
a maximum limitation, or ceiling, on the rate of interest which
may accrue during any interest reset period, which we refer to as
the "
maximum interest rate"; and/or
a minimum limitation, or floor, on the rate of interest that
may accrue during any interest reset period, which we refer to as
the "
minimum interest rate."
Any applicable maximum interest rate or minimum interest rate
will be set forth in the applicable prospectus supplement.
In addition, the interest rate on a floating rate debt security
may not be higher than the maximum rate permitted by Minnesota law,
as that rate may be modified by United States law of general
application. Under Minnesota law as of the date of this prospectus,
no maximum rate would apply to the debt securities.
How Floating Interest Rates Are Reset.The interest rate in
effect from the issue date to the first interest reset date for a
floating rate debt security will be the initial interest rate
specified in the applicable prospectus supplement. We refer to this
rate as the "
initial interest rate." The interest rate on each floating
rate debt security may be reset daily, weekly, monthly, quarterly,
semiannually or annually. This period is the "
interest reset period," and the first day of each interest
reset period is the "
interest reset date." The "
interest determination date" for any interest reset date is
the day to which the calculation agent will refer when determining
the new interest rate at which a floating rate will reset, and,
unless otherwise specified in the applicable prospectus supplement,
will be as follows:
for federal funds rate debt securities, the business day prior
to the interest reset date;
for prime rate debt securities, the business day prior to the
interest reset date;
for commercial paper rate debt securities and CMT rate debt
securities, the second business day prior to the interest reset
date;
for Euro LIBOR debt securities, the second TARGET Settlement
Day prior to the interest reset date;
for LIBOR debt securities (other than Euro LIBOR debt
securities), the second London banking day prior to the interest
reset date, except that the interest determination date pertaining
to the interest reset date for a LIBOR debt security for which the
index currency is pounds sterling will be the interest reset
date;
for Treasury rate debt securities, the day of the week on which
Treasury bills would normally be auctioned for the week in which
the interest reset date falls. Treasury bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday,
in which case the auction is normally held on the following
Tuesday, except that the auction may be held on the preceding
Friday. If, as a result of a Monday being a legal holiday, an
auction is held on the preceding Friday, that Friday will be the
interest determination date; and
for debt securities with two or more base rates, the latest
business day that is at least two business days before the
applicable interest reset date on which each base rate is
determinable.
The interest reset dates will be specified in the applicable
prospectus supplement. If an interest reset date for any floating
rate debt security falls on a day that is not business day, it will
be postponed to the following business day, except that, in the
case of a LIBOR debt security, if that business day is in the next
calendar month, the interest reset date will be the immediately
preceding business day.
In the detailed descriptions of the various base rates which
follow, the "
calculation date" for an interest determination date means
the earlier of (i) the tenth calendar day after that interest
determination date or, if that day is not a business day, the next
business day, and (ii) the business day immediately preceding the
applicable interest payment date or maturity date or, for any
principal amount to be redeemed or repaid, any redemption or
repayment date.
How Interest Is Calculated.Interest on floating rate debt
securities will accrue from and including the most recent interest
payment date to which interest has been paid or duly provided for
or, if no interest has been paid or duly provided for, from and
including the issue date or any other date specified in a
prospectus supplement on which interest begins to accrue. Interest
will accrue to but excluding the next interest payment date or, if
earlier, the date on which the principal has been paid or duly made
available for payment, except as described below under "If A
Payment Date Is Not A Business Day."
Unless otherwise specified in the applicable prospectus
supplement, the calculation agent for any issue of floating rate
debt securities will be The Bank of New York Mellon Trust Company,
National Association. We may appoint a successor calculation agent
with the written consent of the paying agent (which consent will
not be unreasonably withheld). Upon the request of the holder of
any floating rate debt security, the calculation agent will provide
the interest rate then in effect and, if determined, the interest
rate that will become effective on the next interest reset date for
the floating rate debt security. The calculation agent will notify
the paying agent of each determination of the interest rate
applicable to any floating rate debt security promptly after the
determination is made.
For a floating rate debt security, accrued interest will be
calculated by multiplying the principal amount of the floating rate
debt security by an accrued interest factor. This accrued interest
factor will be the sum of the interest factors calculated for each
day in the period for which interest is being paid. The interest
factor for each day is computed by dividing the interest rate
applicable to that day:
by 360, in the case of commercial paper rate debt securities,
federal funds rate debt securities, LIBOR debt securities, other
than LIBOR debt securities denominated in pounds sterling, and
prime rate debt securities;
by 365 (or 366 if the last day of the interest period falls in
a leap year), in the case of LIBOR debt securities denominated in
pounds sterling; or
12
by the actual number of days in the year, in the case of
Treasury rate debt securities and CMT rate debt securities.
For these calculations, the interest rate in effect on any
interest reset date will be the applicable rate as reset on that
date. The interest rate applicable to any other day is the interest
rate from the immediately preceding interest reset date or, if
none, the initial interest rate.
All percentages used in or resulting from any calculation of the
rate of interest on a floating rate debt security will be rounded,
if necessary, to the nearest one hundred-thousandth of a percentage
point, with .000005% rounded up to .00001%, and all U.S. dollar
amounts used in or resulting from these calculations on floating
rate debt securities will be rounded to the nearest cent, with
one-half cent rounded upward. All amounts denominated in any other
currency used in or resulting from these calculations will be
rounded to the nearest two decimal places in that currency, with
.005 rounded up to .01.
When Interest Is Paid.We will pay interest on floating rate
debt securities on the interest payment dates specified in the
applicable prospectus supplement.
If A Payment Date Is Not A Business Day.If any interest
payment date, other than the maturity date or any earlier
redemption or repayment date, for any floating rate debt security
falls on a day that is not a business day, such interest payment
date will be postponed to the following business day, except that,
in the case of a LIBOR debt security, if that business day would
fall in the next calendar month, the interest payment date will be
the immediately preceding business day. If the maturity date or any
earlier redemption or repayment date of a floating rate debt
security falls on a day that is not a business day, the payment of
principal, premium, if any, and interest, if any, will be made on
the next business day, and no interest will accrue as a result of
the delay.
Base Rates.
Commercial Paper Rate Debt Securities. Commercial paper rate
debt securities will bear interest at the interest rates specified
in the applicable prospectus supplement. Those interest rates will
be based on the commercial paper rate and any spread and/or spread
multiplier and will be subject to the minimum interest rate and the
maximum interest rate, if any.
The "
commercial paper rate" means, for any interest determination
date, the money market yield, calculated as described below, of the
rate on that date for U.S. dollar commercial paper having the index
maturity specified in the applicable prospectus supplement, as that
rate is published in H.15(519), under the heading "Commercial
PaperNonfinancial" or "Commercial Paper Financial," as specified in
the applicable prospectus supplement.
The following procedures will be followed if the commercial
paper rate cannot be determined as described above:
If the above rate is not published by 3:00 p.m. (New York City
time) on the calculation date, then the commercial paper rate will
be the money market yield of the rate on that interest
determination date for commercial paper of the index maturity
specified in the applicable prospectus supplement as published in
the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the
heading "Commercial PaperNonfinancial" or "Commercial Paper
Financial," as specified in the applicable prospectus
supplement.
If by 3:00 p.m. (New York City time) on that calculation date
the rate is not yet published in either H.15(519) or the H.15 Daily
Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, then the calculation agent will
determine the commercial paper rate to be the money market yield of
the arithmetic mean of the offered rates
13
as of 11:00 a.m. (New York City time) on that interest
determination date of three leading dealers of U.S. dollar
commercial paper in New York, New York, which may include the
underwriters or agents for the debt securities or their affiliates,
selected by the calculation agent, after consultation with us, for
commercial paper of the index maturity specified in the applicable
prospectus supplement, placed for an industrial issuer whose bond
rating is "Aa" or "AA" (or the equivalent), from a nationally
recognized statistical rating agency.
If fewer than three dealers selected by the calculation agent
are not providing quotations as set forth above, the commercial
paper rate in effect immediately before that interest determination
date will not change and will remain the commercial paper rate in
effect on that interest determination date.
The "
money market yield" will be a yield calculated in accordance
with the following formula:
where "
D" refers to the applicable annual rate for commercial paper
quoted on a bank discount basis and expressed as a decimal and "
M" refers to the actual number of days in the interest
period for which interest is being calculated.
Federal Funds Rate Debt Securities. Federal funds rate debt
securities will bear interest at the interest rates specified in
the applicable prospectus supplement. Those interest rates will be
based on the federal funds rate and any spread and/or spread
multiplier and will be subject to the minimum interest rate and the
maximum interest rate, if any.
The "
federal funds rate" means, for any interest determination
date, the rate with respect to that date for U.S. dollar federal
funds as published in H.15(519) under the heading "Federal Funds
(Effective)" as displayed on Reuters 3000 Xtra Service ("
Reuters"), or any successor service, on page FEDFUNDS1 or
any other page as may replace the applicable page on that service,
which is referred to as "
Reuters Page FEDFUNDS1."
The following procedures will be followed if the federal funds
rate cannot be determined as described above:
If the above rate is not published in H.15(519) by 3:00 p.m.
(New York City time) on the calculation date, or does not appear on
Reuters Page FEDFUNDS1, the federal funds rate will be the rate
with respect to that interest determination date as published in
the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the
heading "Federal Funds (Effective)."
If the above rate is not yet published in either H.15(519) or
the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, by 3:00 p.m.
(New York City time) on the calculation date, the calculation agent
will determine the federal funds rate to be the arithmetic mean of
the rates for the last transaction in overnight U.S. dollar federal
funds prior to 9:00 a.m. (New York City time) on the business day
following that interest determination date, by each of three
leading brokers of U.S. dollar federal funds transactions in New
York, New York, which may include the underwriters or agents for
the debt securities or their affiliates, selected by the
calculation agent, after consultation with us.
If the brokers selected by the calculation agent are not
providing quotations as set forth above, the federal funds rate in
effect immediately before that interest determination date will not
change and will remain the federal funds rate in effect on that
interest determination date.
14
LIBOR Debt Securities. LIBOR debt securities will bear
interest at the interest rates specified in the applicable
prospectus supplement. That interest rate will be based on London
Interbank Offered Rate, which is commonly referred to as "
LIBOR," and any spread and/or spread multiplier and will be
subject to the minimum interest rate and the maximum interest rate,
if any.
The calculation agent will determine LIBOR for each interest
determination date as follows:
As of the interest determination date, LIBOR will be the rate
for deposits in the index currency having the index maturity
designated in the applicable prospectus supplement, commencing on
the second London banking day immediately following that interest
determination date or, if pounds sterling is the index currency,
commencing on that interest determination date, that appears on the
Designated LIBOR Page at approximately 11:00 a.m. (London time) on
that interest determination date.
If no rate appears, then the calculation agent will request the
principal London offices of each of four major banks in the London
interbank market, as selected by the calculation agent, to provide
the calculation agent with its offered quotation for deposits in
the index currency for the period of the index maturity specified
in the applicable prospectus supplement commencing on the second
London banking day immediately following the interest determination
date or, if pounds sterling is the index currency, commencing on
that interest determination date, to prime banks in the London
interbank market at approximately 11:00 a.m. (London time) on that
interest determination date and in a principal amount that is
representative of a single transaction in that index currency in
that market at that time.
If at least two quotations are provided, LIBOR determined on
that interest determination date will be the arithmetic mean of
those quotations. If fewer than two quotations are provided, LIBOR
will be determined for the applicable interest reset date as the
arithmetic mean of the rates quoted at approximately 11:00 a.m., or
some other time specified in the applicable prospectus supplement,
in the applicable principal financial center for the country of the
index currency on that interest determination date, by three major
banks in that principal financial center selected by the
calculation agent for loans in the index currency to leading
European banks, having the index maturity specified in the
applicable prospectus supplement and in a principal amount that is
representative of a single transaction in that index currency in
that market at that time.
If the banks so selected by the calculation agent are not
providing quotations as set forth above, LIBOR in effect
immediately before that interest determination date will not change
and will remain LIBOR in effect on that interest determination
date.
The "
index currency" means the currency specified in the
applicable prospectus supplement as the currency for which LIBOR
will be calculated or, if the euro is substituted for that
currency, the index currency will be the euro. If that currency is
not specified in the applicable prospectus supplement, the index
currency will be U.S. dollars.
"
Designated LIBOR Page" means the display on Reuters, or any
successor service, on page LIBOR01, or any other page as may
replace that page on that service, for the purpose of displaying
the London interbank rates of major banks for the applicable index
currency.
Prime Rate Debt Securities. Prime rate debt securities will
bear interest at the interest rates specified in the applicable
prospectus supplement. That interest rate will be based on the
prime rate and any spread and/or spread multiplier, and will be
subject to the minimum interest rate and the maximum interest rate,
if any.
The "
prime rate" means, for any interest determination date, the
rate on that date as published in H.15(519) under the heading "Bank
Prime Loan."
15
The following procedures will be followed if the prime rate
cannot be determined as described above:
If the above rate is not published in H.15(519) prior to 3:00
p.m. (New York City time) on the calculation date, then the prime
rate will be the rate on that interest determination date as
published in H.15 Daily Update, or other recognized electronic
service used for the purpose of displaying the applicable rate,
under the heading "Bank Prime Loan."
If the rate is not published in either H.15(519) or the H.15
Daily Update, or other recognized electronic service used for the
purpose of displaying the applicable rate, by 3:00 p.m. (New York
City time) on the calculation date, then the calculation agent will
determine the prime rate to be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the
Reuters Screen USPRIME1 Page (as defined below) as that bank's
prime rate or base lending rate as in effect for that interest
determination date.
If fewer than four rates for that interest determination date
appear on the Reuters Screen USPRIME1 Page by 3:00 p.m. (New York
City time) on the calculation date, the calculation agent will
determine the prime rate to be the arithmetic mean of the prime
rates quoted or base lending rates furnished in New York City by
three substitute major banks or trust companies (all organized
under the laws of the United States or any of its states and having
total equity capital of at least $500,000,000), selected by the
calculation agent, after consultation with us.
If the banks selected by the calculation agent are not
providing quotations as set forth above, the prime rate in effect
immediately before that interest determination date will not change
and will remain the prime rate in effect on that interest
determination date.
"
Reuters Screen USPRIME1 Page" means the display designated
as page "USPRIME1" on Reuters, or any successor service, or any
other page as may replace the USPRIME1 Page on that service for the
purpose of displaying prime rates or base lending rates of major
U.S. banks.
Treasury Rate Debt Securities. Treasury rate debt securities
will bear interest at the interest rates specified in the
applicable prospectus supplement. That interest rate will be based
on the Treasury rate and any spread and/or spread multiplier and
will be subject to the minimum interest rate and the maximum
interest rate, if any.
The "
Treasury rate" means the rate from the auction held on the
applicable interest determination date, which we refer to as the "
auction," of direct obligations of the United States, which
are commonly referred to as "
Treasury Bills," having the index maturity specified in the
applicable prospectus supplement as that rate appears under the
caption "INVESTMENT RATE" on the display on Reuters, or any
successor service, on page USAUCTION10 or any other page as may
replace page USAUCTION10 on that service, which we refer to as "
Reuters Page USAUCTION10," or page USAUCTION11 or any other
page as may replace page USAUCTION11 on that service, which we
refer to as "
Reuters Page USAUCTION11."
If the rate described in the immediately preceding bullet point
is not published by 3:00 p.m. (New York City time) on the
calculation date, the Treasury rate will be the bond equivalent
yield of the rate for the applicable Treasury Bills as published in
the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the
caption "U.S. Government Securities/Treasury Bills/Auction
High."
If the rate described in the immediately preceding bullet point
is not published by 3:00 p.m. (New York City time) on the related
calculation date, the Treasury rate will be the bond equivalent
yield of the auction rate of the applicable Treasury Bills,
announced by the United States Department of the Treasury.
If the rate referred to in the immediately preceding bullet
point is not announced by the United States Department of the
Treasury, or if the auction is not held, the Treasury rate will be
the bond equivalent yield of the rate on the applicable interest
determination date of Treasury Bills having the index maturity
specified in the applicable prospectus supplement published in
H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market."
If the rate referred to in the immediately preceding bullet
point is not so published by 3:00 p.m. (New York City time) on the
related calculation date, the Treasury rate will be the rate on the
applicable interest determination date of the applicable Treasury
Bills as published in H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market."
If the rate referred to in the immediately preceding bullet
point is not so published by 3:00 p.m. (New York City time) on the
related calculation date, the Treasury rate will be the rate on the
applicable interest determination date calculated by the
calculation agent as the bond equivalent yield of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30
p.m. (New York City time) on the applicable interest determination
date, of three primary U.S. government securities dealers, which
may include the underwriters or agents for the debt securities or
their affiliates, selected by the calculation agent, for the issue
of Treasury Bills with a remaining maturity closest to the index
maturity specified in the applicable prospectus supplement.
If the dealers selected by the calculation agent are not
providing quotations as set forth above, the Treasury rate in
effect immediately before that interest determination date will not
change and will remain the Treasury rate in effect on that interest
determination date.
The "
bond equivalent yield" means a yield calculated in
accordance with the following formula and expressed as a
percentage:
where "
D" refers to the applicable annual rate for Treasury Bills
quoted on a bank discount basis, "
N" refers to 365 or 366, as the case may be, and "
M" refers to the actual number of days in the interest
period for which interest is being calculated.
CMT Rate Debt Securities. CMT rate debt securities will bear
interest at the interest rates specified in the applicable
prospectus supplement. That interest rate will be based on the CMT
rate and any spread and/or spread multiplier and will be subject to
the minimum interest rate and the maximum interest rate, if
any.
The "
CMT rate" means, for any interest determination date, the
rate displayed on the Designated CMT Reuters Page, as defined
below, under the caption "Treasury Constant Maturities... Federal
Reserve Board Release H.15... Mondays Approximately 3:45 p.m.,"
under the column for the Designated CMT Maturity Index, as defined
below, for:
the rate on that interest determination date, if the Designated
CMT Reuters Page is FRBCMT; or
the week or the month, as applicable, ended immediately
preceding the week in which the related interest determination date
occurs, if the Designated CMT Reuters Page is FEDCMT.
17
The following procedures will be followed if the CMT rate cannot
be determined as described above:
If the above rate is no longer displayed on the relevant page,
or if not displayed by 3:00 p.m. (New York City time) on the
related calculation date, then the CMT rate will be the Treasury
Constant Maturity rate for the Designated CMT Maturity Index as
published in the relevant H.15(519) under the caption "Treasury
Constant Maturities."
If the above rate described in the immediately preceding bullet
point is no longer published, or if not published by 3:00 p.m. (New
York City time) on the related calculation date, then the CMT rate
will be the Treasury Constant Maturity rate for the Designated CMT
Maturity Index or other U.S. Treasury rate for the Designated CMT
Maturity Index on the interest determination date as may then be
published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the
calculation agent determines to be comparable to the rate formerly
displayed on the Designated CMT Reuters Page and published in the
relevant H.15(519).
If the information described in the immediately preceding
bullet point is not provided by 3:00 p.m. (New York City time) on
the related calculation date, then the calculation agent will
determine the CMT rate to be a yield to maturity, based on the
arithmetic mean of the secondary market closing bid side prices as
of approximately 3:30 p.m. (New York City time) on the interest
determination date, reported, according to their written records,
by three leading primary U.S. government securities dealers, which
we refer to as a "
reference dealer," in New York, New York, which may include
the underwriters or agents for the debt securities or their
affiliates, selected by the calculation agent as described in the
following sentence. The calculation agent will select five
reference dealers, after consultation with us, and will eliminate
the highest quotation or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one
of the lowest, for the most recently issued direct noncallable
fixed rate obligations of the United States, which are commonly
referred to as "
Treasury notes," with an original maturity of approximately
the Designated CMT Maturity Index, a remaining term to maturity of
no more than one year shorter than that Designated CMT Maturity
Index and in a principal amount that is representative for a single
transaction in the securities in that market at that time.
If three or four, and not five, of the reference dealers
provide quotations as described in the preceding bullet point, then
the CMT rate will be based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of those quotes
will be eliminated.
If the calculation agent cannot obtain three Treasury notes
quotations as described in the second preceding bullet point, the
calculation agent will determine the CMT rate to be a yield to
maturity based on the arithmetic mean of the secondary market bid
side prices as of approximately 3:30 p.m. (New York City time) on
the interest determination date of three reference dealers in New
York, New York, selected using the same method described in the
second preceding bullet point, for Treasury notes with an original
maturity equal to the number of years closest to but not less than
the Designated CMT Maturity Index and a remaining term to maturity
closest to the Designated CMT Maturity Index and in a principal
amount that is representative for a single transaction in the
securities in that market at that time.
If three or four, and not five, of the reference dealers
provide quotations as described in the preceding bullet point, then
the CMT rate will be based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of those quotes
will be eliminated.
If fewer than three reference dealers selected by the
calculation agent provide quotations as described in the second
preceding bullet point, the CMT rate in effect immediately before
that
interest determination date will not change and will remain the
CMT rate in effect on that interest determination date.
If two Treasury notes with an original maturity greater than the
Designated CMT Maturity Index have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for
the Treasury notes with the shorter original remaining term to
maturity will be used.
"
Designated CMT Reuters Page" means the display on Reuters,
or any successor service, on the page designated in the applicable
prospectus supplement or any other page as may replace that page on
that service for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no page is specified in the
applicable prospectus supplement, the Designated CMT Reuters Page
will be FEDCMT, for the most recent week.
"
Designated CMT Maturity Index" means the original period to
maturity of the U.S. Treasury securities, which is either 1, 2, 3,
5, 7, 10, 20 or 30 years, as specified in the applicable prospectus
supplement, for which the CMT rate will be calculated.
Redemption and Repayment
Optional Redemption By Us.The prospectus supplement will
indicate the terms of our option, if any, to redeem the debt
securities. We will mail a notice of redemption to each holder
which, in the case of global securities, will be the depositary, as
holder of the global securities, by first-class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the
date fixed for redemption, or within the redemption notice period
designated in the applicable prospectus supplement, to the address
of each holder as that address appears upon the books maintained by
the security registrar. The debt securities will not be subject to
any sinking fund.
A partial redemption of the debt securities may be effected by
such method as the trustee shall deem fair and appropriate and may
provide for the selection for redemption of a portion of the
principal amount of debt securities held by a holder equal to an
authorized denomination. If we redeem less than all of the debt
securities and the debt securities are then held in book-entry
form, the redemption will be made in accordance with the
depositary's customary procedures. We have been advised that it is
DTC's practice to determine by the lot the amount of each
participant in the debt securities to be redeemed.
Unless we default in the payment of the redemption price, on and
after the redemption date interest will cease to accrue on the debt
securities called for redemption.
Optional Make-Whole Redemption of Debt Securities.If the
applicable prospectus supplement provides for a make-whole
redemption of debt securities at our option, the following
provisions will apply unless otherwise specified in the applicable
prospectus supplement. Upon redemption of such debt securities, we
will pay a redemption price equal to the greater of the following
amounts, plus, in each case, accrued and unpaid interest thereon to
the redemption date:
100% of the principal amount of the debt securities to be
redeemed; and
the sum of the present values of the remaining scheduled
payments.
In determining the present values of the remaining scheduled
payments, such payments will be discounted to the redemption date
on a s