Filed Pursuant to Rule 424(b)(2)
Registration No. 333-88479
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION HAS BECOME EFFECTIVE. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT OFFERS TO SELL
THESE SECURITIES AND THEY ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 25, 2001
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 22, 1999)
PNC LOGO
$1,000,000,000
PNC FUNDING CORP
$ FLOATING RATE SENIOR NOTES DUE 2003
$ % SENIOR NOTES DUE 2006
UNCONDITIONALLY GUARANTEED BY
THE PNC FINANCIAL SERVICES GROUP, INC.
------------------
PNC Funding Corp will issue the senior notes in two series: $
aggregate principal amount that will mature on , 2003, and
bear interest at a floating rate of LIBOR plus %; and $ aggregate
principal amount that will mature on , 2006, and bear
interest at % per annum.
Interest on the 2003 senior notes is payable quarterly in arrears on
, , and of each year
beginning , 2001. Interest on the 2006 senior notes is
payable semiannually in arrears on and of each year
beginning , 2002. The senior notes will rank equally with
all other unsecured senior indebtedness of PNC Funding Corp. The PNC Financial
Services Group, Inc. will guarantee the senior notes and the guarantees will
rank equally with the senior unsecured indebtedness of The PNC Financial
Services Group, Inc. The senior notes are not guaranteed by the subsidiaries of
The PNC Financial Services Group, Inc. The guarantees are effectively
subordinated to all indebtedness and other liabilities (including trade payables
and deposits) of such subsidiaries. PNC Funding Corp may redeem the senior notes
for the reasons described under "Certain Terms of the Senior Notes -- Redemption
for Taxation Reasons." The senior notes are not otherwise redeemable prior to
maturity. The senior notes will not be subject to any sinking fund.
We have applied to have the senior notes listed on the Luxembourg Stock
Exchange in accordance with the rules of that exchange.
THE SENIOR NOTES AND THE GUARANTEES ARE NOT DEPOSITS OF A BANK AND ARE NOT
INSURED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
INSURER OR GOVERNMENT AGENCY.
None of the Securities and Exchange Commission, any state securities
commission, the Luxembourg Stock Exchange nor any foreign government agency has
approved or disapproved of these securities or determined if this prospectus
supplement or the related prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
------------------
PER SENIOR NOTE PER SENIOR NOTE
DUE 2003 DUE 2006 TOTAL
--------------- --------------- ------------
Public Offering Price........................... % % $
Underwriting Discount........................... % % $
Proceeds to PNC Funding Corp (before
expenses)..................................... % % $
Interest on the senior notes will accrue from , 2001 to
the date of delivery.
------------------
The underwriters expect to deliver the senior notes to purchasers in
book-entry form only through The Depository Trust Company, Clearstream,
Luxembourg and the Euroclear System, as the case may be, on or about
, 2001.
------------------
JOINT BOOK-RUNNING MANAGERS
JPMORGAN SALOMON SMITH BARNEY
------------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
PNC CAPITAL MARKETS, INC.
, 2001
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT PAGE OF
THIS PROSPECTUS SUPPLEMENT OR, WITH RESPECT TO INFORMATION INCORPORATED BY
REFERENCE, AS OF THE DATE OF SUCH INFORMATION.
------------------
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS MAY BE USED BY
PNC CAPITAL MARKETS, INC. AND J.J.B. HILLIARD, W.L. LYONS, INC., BOTH OF WHICH
ARE AFFILIATES OF THE PNC FINANCIAL SERVICES GROUP, INC. AND PNC FUNDING CORP,
IN CONNECTION WITH OFFERS AND SALES RELATED TO SECONDARY MARKET TRANSACTIONS IN
THE SENIOR NOTES. PNC CAPITAL MARKETS, INC., J.J.B. HILLIARD, W.L. LYONS, INC.
AND OTHER AFFILIATES OF THE PNC FINANCIAL SERVICES GROUP, INC. AND PNC FUNDING
CORP MAY ACT AS PRINCIPAL OR AGENT IN THOSE TRANSACTIONS. THOSE SALES WILL BE
MADE AT PRICES RELATED TO PREVAILING MARKET PRICES AT THE TIME OF SALE OR
OTHERWISE.
We have applied to list the senior notes on the Luxembourg Stock Exchange in
accordance with the rules of that exchange. We cannot guarantee that listing
will be obtained on the Luxembourg Stock Exchange. Inquiries regarding our
listing status on the Luxembourg Stock Exchange should be directed to our
Luxembourg listing agent, Deutsche Bank Luxembourg SA, 2 Boulevard Konrad
Adenauer, L-1115 Luxembourg.
This prospectus supplement and the accompanying prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to The PNC Financial Services Group, Inc. and PNC
Funding Corp. The Luxembourg Stock Exchange takes no responsibility for the
contents of this document, makes no representation as to its accuracy or
completeness, and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents
of this prospectus supplement and the accompanying prospectus. Copies of this
prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in this prospectus supplement and the accompanying
prospectus will be available free of charge at the office of the Luxembourg
listing agent.
Subject to the following sentence, we accept responsibility for the
information contained in this prospectus supplement and the accompanying
prospectus and confirm, having made all reasonable inquiries, that to the best
of our knowledge and belief there are no other facts the omission of which would
make any statement herein misleading in any material respect as of the date of
this prospectus supplement. We have obtained the information in "Certain Terms
of the Senior Notes -- Book-Entry System" concerning The Depository Trust
Company ("DTC"), the Euroclear System ("Euroclear") or Clearstream Banking
Luxembourg S.A. ("Clearstream, Luxembourg") and their respective book-entry
systems from prospectus language prepared by DTC, Euroclear and Clearstream,
Luxembourg describing book-entry-only issuance, and we take responsibility for
having correctly extracted that information from these sources in all material
respects, but we take no responsibility for the accuracy of the information
itself.
References to "PNC" in this prospectus supplement and in the accompanying
prospectus are references to The PNC Financial Services Group, Inc., formerly
known as PNC Bank Corp., specifically or, if the context requires, to The PNC
Financial Services Group, Inc. together with its subsidiaries. References to
"PNC Funding" in this prospectus supplement and the accompanying prospectus are
references to PNC Funding Corp, a wholly-owned indirect subsidiary of PNC,
specifically; and references to "we," "us" and "our" are references to PNC and
PNC Funding.
The distribution of this prospectus supplement and the accompanying
prospectus and the offering of the senior notes in some jurisdictions may be
restricted by law. Persons who receive this prospectus supplement and the
accompanying prospectus should inform themselves about and observe any such
restrictions. This prospectus supplement and the accompanying prospectus 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 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. See
"Offering Restrictions."
In this prospectus supplement and the accompanying prospectus, unless
otherwise specified or the context otherwise requires, references to "dollars,"
"$" and "U.S. $" are to United States dollars.
Information contained in this prospectus supplement updates and supersedes
information in the accompanying prospectus.
------------------
S-2
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
The PNC Financial Services Group, Inc....................... S-4
Executive Officers and Directors of PNC..................... S-4
Executive Officers and Directors of PNC Funding............. S-5
Recent Developments......................................... S-6
Use of Proceeds............................................. S-6
Capitalization of The PNC Financial Services Group, Inc..... S-7
Summary Consolidated Financial Data......................... S-8
Certain Terms of the Senior Notes........................... S-9
Certain United States Federal Income Tax Considerations..... S-19
Underwriting................................................ S-22
Offering Restrictions....................................... S-23
Legal Opinions.............................................. S-25
Experts..................................................... S-25
General Information......................................... S-26
PROSPECTUS
About this Prospectus....................................... 3
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 4
PNC Bank Corp............................................... 4
PNC Funding Corp............................................ 5
Use of Proceeds............................................. 5
Consolidated Ratio of Earnings to Fixed Charges............. 5
Consolidated Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends................................. 6
Description of Debt Securities and Guarantees............... 6
Description of Common Stock................................. 20
Description of Preferred Stock.............................. 21
Description of Depositary Shares............................ 25
Plan of Distribution........................................ 27
Legal Opinions.............................................. 28
Experts..................................................... 28
S-3
THE PNC FINANCIAL SERVICES GROUP, INC.
PNC is a bank holding company registered under the Bank Holding Company Act
of 1956, as amended, and a financial holding company under the
Gramm-Leach-Bliley Act. PNC was incorporated in 1983 under Pennsylvania law with
the consolidation of Pittsburgh National Corporation and Provident National
Corporation. Since 1983, PNC has diversified its geographic presence, business
mix and product capabilities through strategic bank and nonbank acquisitions and
the formation of various nonbanking subsidiaries.
PNC is one of the largest diversified financial services organizations in
the United States, operating businesses engaged in regional community banking,
corporate banking, real estate finance, asset-based lending, wealth management,
asset management and global fund services. PNC provides certain products and
services nationally and others in PNC's primary geographic markets in
Pennsylvania, New Jersey, Delaware, Ohio and Kentucky. PNC also provides certain
asset management and processing products and services internationally. At June
30, 2001, PNC's consolidated assets, deposits, and shareholders' equity were
$70.0 billion, $45.8 billion, and $6.7 billion, respectively.
PNC's principal executive offices are located at One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222-2707 and its telephone number is (412)
762-1553.
EXECUTIVE OFFICERS AND DIRECTORS OF PNC
The following persons are the executive officers of PNC. The title of each
executive officer appears opposite his or her name.
James E. Rohr Chairman, President and Chief Executive Officer
Walter E. Gregg, Jr. Vice Chairman
Thomas K. Whitford Group Executive, Executive Vice President, Strategic
Planning
Joseph C. Guyaux Group Executive, Executive Vice President, Regional
Community Banking
Ralph S. Michael, III Group Executive, Executive Vice President, PNC Advisors and
PNC Capital Markets
Robert L. Haunschild Senior Vice President and Chief Financial Officer
Thomas E. Paisley, III Senior Vice President and Chairman of Corporate Credit
Policy
Samuel R. Patterson Controller
Helen P. Pudlin Senior Vice President and General Counsel
Timothy G. Shack Group Executive, Executive Vice President and Chief
Information Officer
S-4
The following persons are the members of the Board of Directors of PNC. The
principal occupation of each director appears opposite his or her name.
Paul W. Chellgren Chairman and Chief Executive Officer, Ashland Inc.
Robert N. Clay President and Chief Executive Officer, Clay Holding Company
George A. Davidson, Jr. Retired Chairman, Dominion Resources, Inc.
David F. Girard-diCarlo Co-Chairman and Managing Partner, Blank Rome Comisky &
McCauley LLP
Walter E. Gregg, Jr. Vice Chairman, The PNC Financial Services Group, Inc.
William R. Johnson Chairman, President and Chief Executive Officer, H.J. Heinz
Company
Bruce C. Lindsay Chairman and Managing Director, Brind-Lindsay & Co., Inc.
W. Craig McClelland Retired Chairman and Chief Executive Officer, Union Camp
Corporation
Thomas H. O'Brien Retired Chairman, The PNC Financial Services Group, Inc.
Jane G. Pepper President, Pennsylvania Horticultural Society
James E. Rohr Chairman, President and Chief Executive Officer, The PNC
Financial Services Group, Inc.
Lorene K. Steffes Vice President, Software Services and Software Group
Pittsburgh Site Executive, IBM Corporation
Thomas J. Usher Chairman and Chief Executive Officer, USX Corporation
Milton A. Washington President and Chief Executive Officer, Allegheny Housing
Rehabilitation Corporation
Helge H. Wehmeier President and Chief Executive Officer, Bayer Corporation
EXECUTIVE OFFICERS AND DIRECTORS OF PNC FUNDING
The following persons are the executive officers of PNC Funding. The title
of each executive officer appears opposite his or her name.
Robert L. Haunschild Chairman and President
Randall C. King Senior Vice President
Kevin Glass Vice President and Assistant Treasurer
Lisa Kovac Vice President and Assistant Treasurer
Maria C. Schaffer Vice President and Treasurer
Thomas R. Moore Secretary
Dale F. Marrison Assistant Secretary
The following persons are the members of the Board of Directors of PNC
Funding. The principal occupation of each director appears opposite his or her
name.
Walter E. Gregg, Jr. Vice Chairman, The PNC Financial Services Group, Inc.
Robert L. Haunschild Senior Vice President and Chief Financial Officer, The PNC
Financial Services Group, Inc.
Randall C. King Treasurer, The PNC Financial Services Group, Inc.
With respect to the senior notes, the address of each executive officer and
member of the Boards of Directors of PNC Funding and PNC is One PNC Plaza, 249
Fifth Avenue, Pittsburgh, PA 15222-2707, U.S.A.
S-5
RECENT DEVELOPMENTS
On July 19, 2001, PNC announced its financial results for the quarter ended
June 30, 2001. Earnings were $295 million or $1.00 per diluted share compared
with earnings from continuing operations of $299 million or $1.01 per diluted
share for the second quarter of 2000. Excluding a $22 million or $0.08 per
diluted share net loss from venture capital activities, second quarter 2001
results increased 7 percent to $317 million or $1.08 per diluted share. Reported
earnings for the second quarter of 2000, which include the residential mortgage
banking business that was sold in January 2001, were $315 million or $1.06 per
diluted share. Return on average common shareholders' equity was 18.13 percent
and return on average assets was 1.67 percent for the second quarter of 2001
compared with 21.91 percent and 1.68 percent, respectively, for the second
quarter of 2000. As at June 30, 2001, PNC's borrowed funds were $12.1 billion,
while shareholders' equity and capital stock were $6.7 billion and $3.0 billion,
respectively.
USE OF PROCEEDS
We anticipate our net proceeds from the sale of the senior notes, before
expenses, to be $ . Of these proceeds, we intend to use approximately $300
million to reduce a portion of PNC Funding's outstanding commercial paper. As of
June 30, 2001, PNC Funding had a total of $580 million of commercial paper
outstanding, with an average weighted maturity of 19 days and an average
weighted interest rate of 3.89% per annum. PNC Funding used the proceeds of the
issuance of its outstanding commercial paper to finance the activities of PNC
and its subsidiaries. We intend to use the remainder of the net proceeds for
general corporate purposes, which may include:
- advances to PNC and its subsidiaries to finance their activities,
- financing of possible future acquisitions,
- repayment of other outstanding indebtedness, and
- repurchases of issued and outstanding shares of common and/or preferred
stock under authorized programs of PNC.
Until we use the net proceeds from the sale of the senior notes for these
purposes, we will use the net proceeds to reduce our short-term indebtedness or
for temporary investments. We expect that we may from time to time engage in
additional financings of a character and in amounts to be determined.
S-6
CAPITALIZATION OF
THE PNC FINANCIAL SERVICES GROUP, INC.
(UNAUDITED)
The following table sets forth the actual unaudited consolidated
capitalization of PNC as of March 31, 2001 and as adjusted to reflect the
issuance of the senior notes. PNC Funding's unaudited financial data and other
information are part of the consolidated results of PNC. This data is prepared
on a basis consistent with that of PNC's audited consolidated financial
statements for the years ended December 31, 1999 and 2000. The following data
should be read in conjunction with PNC's unaudited consolidated financial
statements included in PNC's Quarterly Report on Form 10-Q for the three months
ended March 31, 2001 and audited consolidated financial statements incorporated
by reference in PNC's Annual Report on Form 10-K for the year ended December 31,
2000.
MARCH 31, 2001
--------------------------
ACTUAL AS ADJUSTED
--------- -------------
(U.S. DOLLARS IN MILLIONS)
Deposits.................................................... $47,189 $47,189
Subordinated debt........................................... 2,379 2,379
Other borrowed funds........................................ 9,900 10,900
------- -------
Total debt.................................................. 59,468 60,468
Mandatorily redeemable capital securities of subsidiary
trusts.................................................... 848 848
Equity capital:
Common stock.............................................. 1,764 1,764
Preferred stock........................................... 7 7
Treasury stock............................................ (3,151) (3,151)
Surplus................................................... 1,323 1,323
Retained earnings......................................... 6,857 6,857
Other..................................................... (19) (19)
------- -------
Total equity capital........................................ 6,781 6,781
------- -------
Total capitalization........................................ $67,097 $68,097
======= =======
At March 31, 2001, PNC's Articles of Incorporation, as amended and
restated, provided that the amount of authorized capital stock of PNC was $2.27
billion, comprised of 450.0 million shares of common stock, par value $5.00 per
share, and 20.0 million shares of preferred stock, par value $1.00 per share.
Effective April 24, 2001, PNC amended its Articles of Incorporation to increase
the amount of authorized capital stock of PNC to $4.02 billion, comprised of
800.0 million shares of common stock, par value $5.00 per share, and 20.0
million shares of preferred stock, par value $1.00 per share. At March 31, 2001,
the number of shares of common stock issued and outstanding was approximately
289.0 million, all of which were fully paid and nonassessable. Also, at March
31, 2001, PNC had five series of preferred stock outstanding with a total
liquidation value of $227.0 million.
As of the date of this prospectus supplement, there has been no material
change in the consolidated capitalization of PNC since March 31, 2001 other than
the increase in the authorized capital stock of PNC.
S-7
SUMMARY CONSOLIDATED FINANCIAL DATA
The following unaudited table sets forth certain consolidated financial
data for PNC and its subsidiaries and is qualified in its entirety by the
detailed information and financial statements included in the documents
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference" in the accompanying prospectus.
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- -----------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- ------- ------- ------- ------- -------
(U.S. DOLLARS IN MILLIONS)
SUMMARY OF OPERATIONS
Interest income.......................... $ 1,172 $ 1,161 $ 4,732 $ 4,583 $ 5,024 $ 4,912 $ 4,812
Interest expense......................... 618 606 2,568 2,239 2,536 2,467 2,413
Net interest income...................... 554 555 2,164 2,344 2,488 2,445 2,399
Provision for credit losses.............. 80 31 136 163 225 70
Noninterest income excluding net
securities gains (losses).............. 672 731 2,871 2,428 2,070 1,583 1,217
Net securities gains (losses)............ 29 (3) 20 22 16 40 22
Noninterest expense...................... 775 792 3,071 2,843 2,698 2,403 2,112
Applicable income taxes.................. 135 158 634 586 571 557 535
Income from continuing operations........ 265 302 1,214 1,202 1,080 1,038 991
Income from discontinued operations...... 40 6 65 62 35 14 1
Income before cumulative effect of
accounting change...................... 305 308 1,279 1,264 1,115 1,052 992
Cumulative effect of accounting change... (5)
Net income............................... $ 300 $ 308 $ 1,279 $ 1,264 $ 1,115 $ 1,052 $ 992
PERIOD-END BALANCE SHEET DATA
Total assets............................. $70,966 $68,474 $69,844 $69,286 $70,754 $71,694 $71,312
Loans, net of unearned income............ 45,626 50,259 50,601 49,673 57,633 54,235 51,791
Allowance for credit losses.............. 675 674 675 674 753 972 1,166
Shareholders' equity..................... 6,781 6,039 6,656 5,946 6,043 5,384 5,869
AVERAGE BALANCE SHEET DATA
Total assets............................. $71,992 $68,756 $68,978 $68,363 $69,624 $68,235 $68,988
Earning assets........................... 61,534 60,526 59,875 61,301 63,077 62,082 63,169
Loans, net of unearned income............ 49,637 49,966 50,018 52,780 55,613 52,899 48,757
Securities available for sale............ 8,061 6,128 6,061 6,084 6,129 8,316 13,384
Deposits................................. 46,268 44,255 45,672 44,152 43,894 43,931 44,499
Borrowed funds........................... 14,375 15,333 13,746 15,466 17,908 16,875 17,182
Shareholders' equity..................... 6,671 5,927 6,137 5,870 5,581 5,478 5,828
SELECTED RATIOS
Return on average common shareholders'
equity................................. 18.82% 21.71% 21.63% 22.41% 20.81% 20.01% 17.18%
Return on average assets................. 1.62 1.66 1.68 1.69 1.49 1.49 1.40
Average common shareholders' equity to
average total assets................... 8.83 8.17 8.44 8.13 7.56 7.57 8.32
Net interest margin...................... 3.53 3.46 3.37 3.68 3.85 3.94 3.83
CREDIT QUALITY RATIOS
Nonperforming loans to period-end
loans.................................. .74 .60 .64 .59 .50 .50 .67
Nonperforming assets to period-end loans,
loans held for sale and foreclosed
assets................................. .81 .65 .71 .61 .55 .59 .87
As a percent of average loans
Net charge-offs........................ .65 .25 .27 .31 .80 .51 .34
Provision for credit losses............ .65 .25 .27 .31 .40 .13
Allowance for credit losses............ 1.36 1.35 1.35 1.28 1.35 1.84 2.39
Allowance as a percent of period-end
Loans.................................. 1.48 1.34 1.33 1.36 1.31 1.79 2.25
Nonperforming loans.................... 200.89 224.67 208.98 231.62 263.29 360.00 337.97
RATIO OF EARNINGS TO FIXED CHARGES(A)
Excluding interest on deposits........... 2.59x 2.74x 2.79x 2.82x 2.42x 2.48x 2.50x
Including interest on deposits........... 1.62 1.73 1.69 1.76 1.63 1.63 1.62
- ---------------
(a) The consolidated ratio of earnings to fixed charges has been computed by
dividing income from continuing operations before taxes (which excludes the
income from discontinued operations and the cumulative effect of accounting
change) and fixed charges by fixed charges. Fixed charges represent all
interest expense (ratios are presented both excluding and including interest
on deposits), borrowed funds discount amortization expense and the portion
of net rental expense which is deemed to be equivalent to interest on debt.
Interest expense (other than on deposits) includes interest on bank notes
and senior debt, federal funds purchased, repurchase agreements, other
borrowed funds, and subordinated debt.
S-8
CERTAIN TERMS OF THE SENIOR NOTES
The senior notes will be issued by PNC Funding. Each series of senior notes
will be Senior Debt Securities, as such term is defined in the accompanying
prospectus. The following description of the particular terms of the senior
notes supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Senior Debt Securities in
the accompanying prospectus, to which description we refer you. The accompanying
prospectus sets forth the meaning of certain capitalized terms used herein and
not otherwise defined.
GENERAL
The senior notes due on , 2003 (the "2003 Notes") and
the senior notes due on , 2006 (the "2006 Notes") will
initially be limited to $ aggregate principal amount and $
aggregate principal amount, respectively, and will be issued under an Indenture
dated as of December 1, 1991, among PNC, PNC Funding and The Chase Manhattan
Bank, as Trustee, as supplemented by a Supplemental Indenture dated as of
February 15, 1993 and a Second Supplemental Indenture dated as of February 11,
2000. References to the Indenture in this section will mean the Indenture as so
supplemented. The accompanying prospectus provides a more complete description
of the Indenture dated as of December 1, 1991 and the Supplemental Indenture.
The senior notes are unconditionally guaranteed as to payment of principal and
interest by PNC. Except as described below, the senior notes will be issued only
in book-entry form. The senior notes will be represented by one or more
permanent global certificates registered in the name of the nominee of DTC (each
a "Global Note" and collectively, the "Global Notes"). The senior notes will be
available for purchase in denominations of $1,000 and integral multiples
thereof.
The 2003 Notes and the 2006 Notes, respectively, will mature on ,
2003 and , 2006 at their principal amount unless previously
redeemed or cancelled. Except for certain reasons related to U.S. taxation as
discussed in "Certain Terms of the Senior Notes - Redemption for Taxation
Reasons," the senior notes may not be redeemed by PNC Funding prior to their
stated maturity.
If any of the interest payment dates or a maturity date falls on a day that
is not a business day, PNC Funding will postpone the interest payment date or
the maturity date to the next succeeding business day, but the payment made on
such dates will be treated as being made on the date payment was first due and
the holders of the senior notes will not be entitled to any further interest or
other payments with respect to such postponements. The term "business day" means
any day other than a Saturday or Sunday on which DTC, Euroclear and Clearstream,
Luxembourg are operating and on which banks and foreign exchange markets are
open for business in the city of offices of the principal paying agent and of
the Luxembourg paying and listing agent and a day that it is not a day on which
banks are generally authorized or required by law or executive order to be
closed in the City of New York, New York, the City of Pittsburgh, Pennsylvania
or the Commonwealth of Pennsylvania.
The interest payable on the senior notes on any interest payment date,
subject to certain exceptions, will be paid to the person in whose name the
senior notes are registered at the close of business on the fifteenth calendar
day, whether or not a business day, immediately preceding the interest payment
date. However, interest that PNC Funding pays on the maturity date will be paid
to the person to whom the principal will be payable. Interest will be payable by
wire transfer in immediately available funds in U.S. dollars at the office of
the principal paying agent in New York, New York, at the office of the
Luxembourg paying and listing agent for so long as the senior notes are listed
on the Luxembourg Stock Exchange, or at PNC Funding's option in the event the
senior notes are not represented by Global Notes, by check mailed to the address
of the person specified for payment in the preceding sentences.
The senior notes are unconditionally guaranteed by PNC and rank equally
with all of PNC Funding's other unsecured senior indebtedness. The guarantees
will rank equally with the senior unsecured indebtedness of PNC. The senior
notes are not guaranteed by the subsidiaries of PNC. The guarantees are
effectively subordinated to all indebtedness and other liabilities (including
trade payables and deposits) of such subsidiaries.
S-9
The senior notes and the guarantees are not deposits of a bank and are not
insured by the United States Federal Deposit Insurance Corporation or any other
insurer or government agency.
INTEREST
The 2003 Notes
The 2003 Notes will bear interest at a floating rate of LIBOR plus %. PNC
Funding will pay interest on the 2003 Notes quarterly in arrears by 2:30 p.m.
New York City time on , , and
of each year, each an "interest payment date" for the 2003 Notes, and
on the maturity date. Interest will be computed on the basis of a 360-day year
for the actual number of days elapsed.
Interest on the 2003 Notes will accrue from , 2001 to
, 2001 excluding the first interest payment date and then from, and
including, the immediately preceding interest payment date to which interest has
been paid or duly provided for to, but excluding, the next interest payment date
or the maturity date, as the case may be. Each of these periods is referred to
as an "interest period" for the 2003 Notes.
The interest rate on the 2003 Notes will be calculated by
, as calculation agent, except that the interest rate in
effect for the period from , 2001 to , 2001 (the
"initial interest rate") will be established by PNC Funding as the rate for
deposits in U.S. dollars having a maturity of three months commencing on
, 2001 that appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on , 2001. If no rate appears on Telerate Page
3750, as specified in the preceding sentence, then the initial interest rate
will be determined by PNC Funding in the manner described in clause (ii) below,
except that the banks referred to in such clause will be selected by PNC Funding
rather than the calculation agent.
The calculation agent will reset the interest rate with respect to the 2003
Notes on each interest payment date, each of which is referred to as an
"interest reset date." The second London business day preceding an interest
reset date will be the "interest determination date" for that interest reset
date. The interest rate in effect on each date that is not an interest reset
date will be the interest rate determined as of the interest determination date
pertaining to the immediately preceding interest reset date. The interest rate
in effect on any day that is an interest reset date will be the interest rate
determined as of the interest determination date pertaining to that interest
reset date, except that the interest rate in effect for the period from and
including , 2001 to , 2001, the initial
interest reset date.
"LIBOR" will be determined by the calculation agent in accordance with the
following provisions:
(i) With respect to any interest determination date, LIBOR will be the
rate for deposits in U.S. dollars having a maturity of three months
commencing on the first day of the applicable interest period that appears
on Telerate Page 3750 as of 11:00 a.m., London time, on that interest
determination date. If no rate appears on that interest determination date,
LIBOR, in respect to that interest determination date, will be determined
in accordance with the provisions described in (ii) below.
(ii) With respect to an interest determination date on which no rate
appears on Telerate Page 3750, as specified in (i) above, the calculation
agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
calculation agent, to provide the calculation agent with its offered
quotation for deposits in U.S. dollars for the period of three months,
commencing on the first day of the applicable interest period, 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 for a single transaction in U.S. dollars in that market at
the time. If at least two quotations are provided, then LIBOR on that
interest determination date will be the arithmetic mean of those
quotations. If fewer than two quotations are provided, then LIBOR on the
interest determination date will be the arithmetic mean (rounded, if
necessary, to the nearest one-hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards) of the
rates quoted at approximately 11:00 a.m., New York City time, on the
interest determination date by three major banks in New York City selected
by the
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calculation agent for loans in U.S. dollars to leading European banks,
having a three-month maturity and in a principal amount that is
representative for a single transaction in U.S. dollars in that market at
that time; provided, however, that if the banks selected by the calculation
agent are not providing quotations in the manner described by this
sentence, LIBOR for the interest period commencing on the interest reset
date following the interest determination date will be LIBOR in effect on
that interest determination date.
"London business day" means any day on which dealings in U.S. dollars are
transacted in the London interbank market.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
Jones Market Service or any successor page or service, for the purposes of
displaying the London interbank offered rates for U.S. dollar deposits.
For so long as the 2003 Notes are listed on the Luxembourg Stock Exchange,
the calculation agent will notify the Luxembourg Stock Exchange and any holders
of 2003 Notes of the relevant interest rate, interest period and interest
(coupon) amount no later than the first business day following the relevant
interest reset date.
The 2006 Notes
The 2006 Notes will bear interest at the rate of % per annum. Interest
on the 2006 Notes will accrue from the date of original issuance, which will be
payable semiannually in arrears by 2:30 New York City time on and
of each year (each an "interest payment date" for the 2006
Notes), commencing , 2002. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months. The interest period
relating to an interest payment date shall be the period from but not including
the preceding interest payment date to and including the relevant interest
payment date.
ADDITIONAL PAYMENTS FOR TAXATION REASONS
All payments of principal and interest in respect of the senior notes shall
be made free and clear of, and without withholding or deduction for, any taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within the United States or any authority
therein or thereof having power to tax, unless such withholding or deduction is
required by law. In that event, PNC Funding shall pay such additional amounts as
shall result in net receipt by the holders of the senior notes who are United
States Aliens (as such term is defined below) of such amounts as would have been
received by them had no such withholding or deduction been required, except that
the foregoing obligation to pay additional amounts shall not apply to:
(i) any tax, assessment or governmental charge that would not have been
so imposed but for the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or holder of power over, such holder, if
such holder is an estate, trust, partnership or corporation) and the
United States, including, without limitation, such holder (or
fiduciary, settlor, beneficiary, member, shareholder or holder of a
power) being considered as:
(A) being or having been present or engaged in a trade or business
in the United States or having or having had a permanent
establishment therein;
(B) having a current or former relationship with the United States,
including a relationship as a citizen or resident or being
treated as a resident thereof;
(C) being or having been a personal holding company, a controlled
foreign corporation, a passive foreign investment company, a
foreign personal holding company with respect to the United
States, a corporation that has accumulated earnings to avoid
United States federal income tax or a private foundation or
other tax-exempt organization; or
(D) an actual or a constructive "10 percent shareholder" of PNC
Funding or PNC as defined in Section 871(h)(3) of the United
States Internal Revenue Code of 1986, as amended (the "Code");
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(ii) any holder who is a fiduciary or partnership or other than the sole
beneficial owner of the senior note, but only to the extent that a
beneficiary or settlor with respect to such fiduciary or member of
such partnership or a beneficial owner of the senior note would not
have been entitled to the payment of an additional amount had such
beneficiary, settlor, member or beneficial owner been the holder of
such senior note;
(iii) any tax, assessment or governmental charge that would not have been
imposed or withheld but for the failure of the holder, if required,
to comply with certification, identification or information
reporting or any other requirements under United States income tax
laws and regulations, without regard to any tax treaty, with respect
to the payment, concerning the nationality, residence, identity or
connection with the United States of the holder or a beneficial
owner of such senior note, if such compliance is required by United
States income tax laws and regulations, without regard to any tax
treaty, as a precondition to relief or exemption from such tax,
assessment or governmental charge;
(iv) any tax, assessment or governmental charge that would not have been
so imposed or withheld but for the presentation by the holder of such
senior note for payment on a date more than 30 days after the date on
which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later;
(v) any estate, inheritance, gift, sales, transfer, excise, wealth or
personal property tax or any similar tax, assessment or governmental
charge;
(vi) any tax, assessment or governmental charge that is payable otherwise
than by withholding by PNC Funding or a paying agent from the payment
of the principal of or interest on such senior note;
(vii) any tax, assessment or governmental charge required to be withheld
by any paying agent from such payment of principal of or interest on
any senior note, if such payment can be made without such
withholding by any other paying agent;
(viii) any tax required to be withheld or deducted from a payment to an
individual which is required to be made pursuant to any European
Union Directive on the taxation of savings implementing the
conclusion of the ECOFIN Council meeting of 26-27th November, 2000
or any law implementing or complying with, or introduced in order to
conform to, such Directive;
(ix) any senior note presented for payment by or on behalf of a holder who
would have been able to avoid such withholding or deduction by
presenting the relevant senior note to another paying agent in a
Member State of the European Union; or
(x) any combination of items (i), (ii), (iii), (iv), (v), (vi), (vii),
(viii) and/or (ix).
The term "United States" means the United States of America, the
Commonwealth of Puerto Rico and each possession of the United States of America
and place subject to its jurisdiction, and the term "United States Alien" means
any corporation, individual, estate or trust that, as to the United States, is
for United States federal income tax purposes (A) a foreign corporation, (B) a
non-resident alien individual or (C) a foreign estate or trust.
REDEMPTION FOR TAXATION REASONS
Each series of senior notes may be redeemed at the option of PNC Funding in
whole, but not in part, at any time, on giving not less than 30 nor more than 60
days' notice to the holders of such series of senior notes (which notice shall
be irrevocable), at their principal amount (together with interest accrued to
the date fixed for redemption), if (i) PNC Funding has or will become obliged to
pay additional amounts as a result of any change in, or amendment to, the laws
or regulations of the United States or any political subdivision or any
authority thereof or therein having power to tax, or any change in the
application or official interpretation of such laws or regulations, which change
or amendment becomes effective on or after the issue date of such series of
senior notes, and (ii) such obligation cannot be avoided by PNC Funding taking
reasonable measures available to it, provided that no such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which PNC
Funding would be obliged to pay such additional amounts were a payment in
respect of such series of senior notes then due.
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Before the publication of any notice of redemption pursuant to this paragraph,
PNC Funding shall deliver to the principal paying agent a certificate signed by
two officers of PNC Funding stating that PNC Funding is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of PNC Funding to so redeem have occurred, and an opinion
of independent legal advisers of recognized standing to the effect that PNC
Funding has or will become obliged to pay such additional amounts as a result of
such change or amendment.
BOOK-ENTRY SYSTEM
The senior notes of each series will be represented by one or more
permanent Global Notes. Ownership of beneficial interests in the Global Notes
will be limited to institutions that have accounts with DTC (each, a
"participant" and collectively, the "participants") or persons that may hold
interests through participants. Beneficial interest in the senior notes by
participants will be shown on, and transfers thereof will be effected only
through, records maintained by DTC or its nominee and its participants.
Beneficial interests in senior notes by persons that hold through participants
will be evidenced only by, and transfers of such beneficial interests with such
participants will be effected only through, records maintained by such
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to hold or transfer such beneficial interests.
PNC Funding has been advised by DTC that upon the issuance of a Global Note
or Global Notes and the deposit of such Global Note or Global Notes with DTC or
its custodian, DTC will immediately credit, on its book-entry registration and
transfer system, the respective principal amounts of the senior notes
represented by such Global Note or Global Notes to the accounts of the
participants designated by the underwriters. Each owner of a beneficial interest
in a Global Note is required to hold at all times a beneficial interest in such
Global Note of $1,000 principal amount or any integral multiple of $1,000 in
excess thereof.
Principal and interest payments on the senior 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 and holder of the Global Note or Global Notes. Such
payments to DTC or its nominee, as the case may be, will be made in immediately
available funds, provided that, in the case of payments of principal and
interest on the respective dates of maturity, the applicable Global Note or
Global Notes are presented to the principal paying agent in time for the
principal payment agent to make such payments in such funds in accordance with
its normal procedures. PNC Funding and the principal paying agent will treat the
persons in whose names the senior notes are registered as the owners of such
senior notes for the purpose of receiving payment of principal of and interest
on the senior notes and for all other purposes whatsoever. Therefore, so long as
DTC or its nominee is the registered owner of a Global Note, DTC or that nominee
will be considered the sole owner or holder of the senior notes represented by
that Global Note for all purposes under the senior notes, and neither PNC
Funding nor the principal paying agent has any direct responsibility or
liability for the payment of principal of or interest on the senior notes to the
participants or owners of beneficial interests in the Global Notes.
DTC has advised PNC Funding and the principal paying agent that upon
receipt of any payment of principal or interest in respect of a Global Note, it
will immediately credit the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Note or Global Notes as shown in the records of DTC or its
nominee. Payments by participants to owners of beneficial interests in Global
Notes held through participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants or indirect participants.
No Global Note may be transferred except as a whole by DTC to a nominee of
DTC or by a nominee of DTC to another nominee of DTC.
Except in the limited circumstances set forth in "Certificated Notes,"
participants and owners of beneficial interests in the Global Notes will not be
entitled to receive senior notes in definitive form and will not be considered
holders of senior notes. In such circumstances, upon surrender by DTC or
successor depositary of a Global Note, senior notes in definitive form will be
issued to each person that DTC or
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successor depositary identifies as the beneficial owner of the related senior
notes. Upon such issuance, the principal paying agent is required to register
such senior notes in the name of, and cause the same to be delivered to, such
person or persons (or nominee thereof). Such senior notes will be issued in
fully registered form without coupons, in denominations of $1,000 or any amount
in excess thereof which is an integral multiple of $1,000. Such senior notes may
not subsequently be exchanged by a holder for senior notes in denominations of
less than $1,000.
Except as provided above, beneficial owners of Global Notes will not be
entitled to receive physical delivery of senior notes in definitive form and no
Global Note will be exchangeable except for another Global Note of like
denomination and tenor to be registered in the name of DTC or its nominee.
Accordingly, each person owning a beneficial interest in a Global Note must rely
on the procedures of DTC and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the senior notes. PNC Funding understands
that under existing industry practices, if PNC Funding requests any action of
holders of a series of the senior notes or any holders of a beneficial interest
in a Global Note desire to give or take any action holders of a series of the
senior notes are entitled to give or take under such senior notes, DTC would
authorize the participants owning the relevant beneficial interest to give or
take such action, and the participants would authorize the beneficial owners
owning through such participants to give or take such action or would otherwise
act upon the instructions of the beneficial owners owning through them.
Beneficial interests in the Global Notes will be represented through
book-entry accounts of financial institutions acting on behalf of beneficial
owners as direct and indirect participants in DTC. Investors may elect to hold
interests in the Global Notes through either DTC (in the United States) or
Clearstream, Luxembourg or Euroclear (in Europe), either directly if they are
participants of such systems or indirectly through organizations that are
participants in such systems. Clearstream, Luxembourg and Euroclear will hold
interests on behalf of their participants through customers' securities accounts
in Clearstream, Luxembourg's and Euroclear's names on the books of their U.S.
depositaries, which in turn will hold such interests in customers' securities
accounts in the U.S. depositaries' names on the books of DTC.
DTC has advised PNC Funding as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered under Section 17A of the Exchange Act;
- DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates;
- Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations;
- Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either
directly or indirectly; and
- The rules applicable to DTC and its participants are on file with the
Securities and Exchange Commission.
Clearstream, Luxembourg has advised PNC Funding that it is incorporated
under the laws of Luxembourg as a bank. Clearstream, Luxembourg holds securities
for its customers and facilitates the clearance and settlement of securities
transactions between its customers through electronic book-entry changes in
accounts of its customers, thereby eliminating the need for physical movement of
certificates. Clearstream, Luxembourg provides to its customers, among other
things, services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream, Luxembourg interfaces with domestic markets in over 30 countries.
As a bank, Clearstream, Luxembourg is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Sector (Commission de
Surveillance du Secteur Financier). Clearstream, Luxembourg
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customers are recognized financial institutions around the world, including
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations, and may include the underwriters. Clearstream's U.S.
customers are limited to securities brokers and dealers and banks. Indirect
access to Clearstream, Luxembourg is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with Clearstream, Luxembourg customers either directly or
indirectly.
Euroclear has advised PNC Funding that it was created in 1968 to hold
securities for participants of Euroclear and to clear and settle transactions
between Euroclear participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries.
Euroclear is operated by the Euroclear Bank S.A./ N.V. (the "Euroclear
Operator"), under contract with Euroclear Clearance Systems, S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear participants. Euroclear participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or indirectly.
The Euroclear Operator advises as follows: Under Belgian law, investors
that are credited with securities on the records of the Euroclear Operator have
a co-property right in the fungible pool of interests in securities on deposit
with the Euroclear Operator in an amount equal to the amount of interests in
securities credited to their accounts. In the event of the insolvency of the
Euroclear Operator, Euroclear participants would have a right under Belgian law
to the return of the amount and type of interests in securities credited to
their accounts with the Euroclear Operator. If the Euroclear Operator did not
have a sufficient amount of interests in securities on deposit of a particular
type to cover the claims of all participants credited with such interests in
securities on the Euroclear Operator's records, all participants having an
amount of interests in securities of such type credited to their accounts with
the Euroclear Operator would have the right under Belgian law to the return of
their pro rata share of the amount of interests in securities actually on
deposit.
Euroclear further advises that investors that acquire, hold and transfer
interests in the senior notes by book-entry through accounts with the Euroclear
Operator or any other securities intermediary are subject to the laws and
contractual provisions governing their relationship with their intermediary, as
well as the laws and contractual provisions governing the relationship between
such an intermediary and each other intermediary, if any, standing between
themselves and the Global Notes.
Under Belgian law, the Euroclear Operator is required to pass on the
benefits of ownership in any interests in securities on deposit with it (such as
dividends, voting rights and other entitlements) to any person credited with
such interests in securities on its records.
PNC Funding has provided the descriptions of the operations and procedures
of DTC set forth in "Book-Entry System" and elsewhere herein, and the
descriptions of the operations and procedures of DTC, Clearstream, Luxembourg
and Euroclear solely as a matter of convenience. These operations and procedures
are solely within the control of those organizations and are subject to change
by them from time to time. PNC Funding, the underwriters and the principal
paying agent do not take any responsibility for these operations or procedures,
and you are urged to contact DTC, Clearstream, Luxembourg and Euroclear or their
participants directly to discuss these matters.
The laws of some jurisdictions may require that purchasers of securities
take physical delivery of those securities in definitive form. Accordingly, the
ability to transfer interests in the senior notes represented by a Global Note
to those persons may be limited. In addition, because DTC can act only on behalf
of its participants, who in turn act on behalf of persons who hold interests
through participants, the ability of a person having an interest in senior notes
represented by a Global Note to pledge or transfer such interest to persons or
entities that do not participate in DTC's system, or otherwise to take actions
in respect of such interest, may be affected by the lack of a physical
definitive security in respect of such interest.
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Neither PNC Funding nor the principal paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of senior notes by DTC, Clearstream, Luxembourg, or
Euroclear, or for maintaining, supervising or reviewing any records of those
organizations relating to the senior notes.
Distributions on the senior notes held beneficially through Clearstream,
Luxembourg, will be credited to cash accounts of its customers in accordance
with its rules and procedures, to the extent received by the U.S. depositary for
Clearstream, Luxembourg.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of Euroclear, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipt of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear participants and has no record of or relationship with persons holding
through Euroclear participants.
Distributions on the senior notes held beneficially through Euroclear will
be credited to the cash accounts of its participants in accordance with the
Terms and Conditions, to the extent received by the U.S. depositary for
Euroclear.
CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the senior notes will be made in immediately
available funds. Secondary market trading between DTC participants will occur in
the ordinary way in accordance with DTC rules and will be settled in immediately
available funds. Secondary market trading between Clearstream, Luxembourg
customers and/or Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of Clearstream,
Luxembourg and Euroclear and will be settled using the procedures applicable to
conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream,
Luxembourg customers or Euroclear participants, on the other, will be effected
in DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by the U.S. depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to the U.S.
depositary to take action to effect final settlement on its behalf by delivering
or receiving the senior notes in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Clearstream, Luxembourg customers and Euroclear participants may not
deliver instructions directly to their U.S. depositaries.
Because of time-zone differences, credits of the senior notes received in
Clearstream, Luxembourg or Euroclear as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing and
dated the business day following DTC settlement date. Such credits or any
transactions in the senior notes settled during such processing will be reported
to the relevant Clearstream, Luxembourg customers or Euroclear participants on
such business day. Cash received in Clearstream, Luxembourg or Euroclear as a
result of sales of the senior notes by or through a Clearstream, Luxembourg
customer or a Euroclear participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the relevant
Clearstream, Luxembourg or Euroclear cash account only as of the business day
following settlement in DTC.
Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the
foregoing procedures to facilitate transfers of the senior notes among
participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time.
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CERTIFICATED NOTES
PNC Funding will issue certificated notes in registered form to each person
that DTC identifies as the beneficial owner of the senior notes represented by
the Global Notes upon surrender by DTC of the Global Notes if:
- DTC notifies PNC Funding that it is no longer willing or able to act as
depositary for the Global Notes, and PNC Funding has not appointed a
successor depositary within 90 days of that notice;
- an event of default has occurred and is continuing, and DTC requests the
issuance of certificated notes; or
- PNC Funding determines not to have the senior notes represented by Global
Notes.
Neither PNC Funding nor the principal paying agent will be liable for any
delay by DTC, its nominee or any direct or indirect participant in identifying
the beneficial owners of the related senior notes. PNC Funding and the principal
paying agent may conclusively rely on, and will be protected in relying on,
instructions from DTC or its nominee for all purposes, including with respect to
the registration and delivery, and the respective principal amounts, of the
senior notes to be issued.
If PNC Funding issues certificated senior notes, holders may obtain
certificates at the offices of the Luxembourg paying and listing agent. PNC
Funding will make those certificates available in Luxembourg at the time PNC
Funding delivers certificates to the principal paying agent.
PAYMENT AND PRINCIPAL PAYING AGENTS
The Chase Manhattan Bank will act as PNC Funding's principal paying agent
with respect to the senior notes through its offices presently located at 450
West 33rd Street, New York, New York 10001. PNC Funding may at any time rescind
the designation of a paying agent, appoint a successor paying agent, or approve
a change in the office through which any paying agent acts. For as long as a
series of the senior notes is listed on the Luxembourg Stock Exchange, PNC
Funding will maintain a paying agent in Luxembourg with respect to the series of
senior notes so listed. Deutsche Bank Luxembourg SA, as the Luxembourg paying
and listing agent, will act as PNC Funding's paying agent in Luxembourg with
respect to the senior notes through its offices located at 2 Boulevard Konrad
Adenauer, L-1115 Luxembourg. Payments of interest and principal may be made by
wire-transfer in immediately available funds in U.S. dollars for senior notes
held in book-entry form or, at PNC Funding's option in the event the senior
notes are not represented by Global Notes, by check mailed to the address of the
person entitled to the payment as it appears in the senior note register.
Payment of principal will be made upon the surrender of the relevant senior
notes at the offices of the principal paying agent or Luxembourg paying and
listing agent.
For as long as a series of the senior notes is listed on the Luxembourg
Stock Exchange, PNC Funding will publish notice of any change in a paying agent
with respect to such series of the senior notes in a daily newspaper of general
circulation in Luxembourg (which is expected to be the Luxembourger Wort).
FURTHER ISSUANCES
PNC Funding may from time to time without the consent of the holders of
either series of the senior notes create and issue further notes having the same
terms and conditions as either series of the senior notes (so that, for the
avoidance of doubt, references in the conditions of such senior notes to "issue
date" shall be to the first issue date of the relevant series of the senior
notes) and so that the same shall be consolidated and form a single series with
such senior notes, and references in this Certain Terms of the Senior Notes to
"senior notes" shall be construed accordingly.
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NOTICES
Notices to the holders of registered senior notes will be mailed to them at
their respective addresses in the register of the senior notes and will be
deemed to have been given on the fourth weekday (being a day other than Saturday
or Sunday) after the date of mailing. Notices to the holders of registered
senior notes that are listed on the Luxembourg Stock Exchange will also be
published in a daily newspaper of general circulation in Luxembourg (which is
expected to be the Luxembourger Wort). For so long as a series of the senior
notes are listed on the Luxembourg Stock Exchange, any appointment of or change
in the Luxembourg paying and listing agent with respect to the series so listed
will be published in Luxembourg in the manner set forth above.
GOVERNING LAW
The senior notes and the guarantees will be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following general discussion summarizes the material United States
federal income tax consequences of the purchase, ownership and disposition of
the senior notes. This discussion is a summary for general information only and
does not consider all aspects of United States federal income taxation that may
be relevant to an investor in light of that investor's particular circumstances.
This discussion deals only with senior notes purchased at their original
offering price and held as capital assets within the meaning of Section 1221 of
the United States Internal Revenue Code of 1986, referred to in this discussion
as the "Code," as amended to the date of this prospectus supplement. This
summary does not address all of the tax consequences that may be relevant to a
holder of senior notes nor does it address the federal income tax consequences
to holders subject to special treatment under the United States federal income
tax laws, such as brokers or dealers in securities or currencies, certain
securities traders, tax-exempt entities, banks, thrifts, insurance companies,
other financial institutions, persons that hold senior notes as a position in a
"straddle" or as part of a "synthetic security," "hedging," "conversion" or
other integrated instrument, persons that have a "functional currency" other
than the United States dollar, investors in pass-through entities and certain
United States expatriates. Further, this summary does not address
- the income tax consequences to shareholders in, or partners or
beneficiaries of, a holder of the senior notes, or
- any state, local or foreign tax consequences of the purchase, ownership,
or disposition of the senior notes.
This discussion is based upon the Code, existing and proposed regulations
thereunder, and current administrative rulings and court decisions. All of the
foregoing are subject to change, possibly on a retroactive basis, and any such
change could affect the continuing validity of this discussion.
PERSONS CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF SENIOR NOTES
SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF UNITED
STATES FEDERAL INCOME TAX LAWS, AS WELL AS THE LAWS OF ANY STATE, LOCAL, OR
FOREIGN TAXING JURISDICTION.
For purposes of this discussion, the term "United States holder" means a
beneficial owner of a senior note that for United States federal income tax
purposes is
- a citizen or resident of the United States,
- a corporation or other entity taxable as a corporation created or
organized under the laws of the United States or any State thereof or the
District of Columbia,
- an estate the income of which is includible in its gross income for
United States federal income tax purposes without regard to its source,
or
- a trust if a court within the United States is able to exercise primary
supervision over its administration and one or more United States persons
have the authority to control all substantial decisions of the trust.
Certain United States federal income tax consequences relevant to a
beneficial owner of a senior note other than a United States holder, referred to
in this discussion as a "non-U.S. holder," are discussed separately below.
UNITED STATES HOLDERS
The following discussion applies to you if you are a United States holder.
Payments of Interest
Stated interest paid or accrued on the senior notes generally will be
taxable to you as ordinary income at the time the interest is paid or accrued in
accordance with your method of accounting for United States federal income tax
purposes.
S-19
Sale or Redemption of the Senior Notes
When you dispose of a senior note by sale, exchange, redemption or other
taxable disposition, you generally will recognize gain or loss equal to the
difference, if any, between (i) the amount realized on the disposition (other
than amounts attributable to accrued and unpaid interest) and (ii) your tax
basis in the senior note. Your tax basis in a senior note generally will equal
the cost of the senior note. When a senior note is sold, exchanged, redeemed or
otherwise disposed of between interest payment dates, the portion of the amount
realized on the disposition that is attributable to interest accrued to the date
of sale but not yet reported as interest income must be reported at the time of
sale.
The gain or loss on a senior note generally will constitute capital gain or
loss, and will be long-term capital gain or loss if you have held the senior
note for longer than one year. Under current law, net capital gains of
individuals may be taxed at lower rates than items of ordinary income. Your
ability to offset capital losses against ordinary income is limited.
NON-U.S. HOLDERS
The following discussion summarizes certain United States federal income
tax consequences relevant to a non-U.S. holder of a senior note.
Payments of Stated Interest
Under current United States federal income tax law, and subject to the
discussion of backup withholding below, payments of stated interest on a senior
note to a non-U.S. holder will not be subject to United States federal income or
withholding tax if
- the non-U.S. holder does not actually or constructively own 10 percent or
more of the combined voting power of all classes of stock of PNC Funding
or PNC,
- the non-U.S. holder is not a controlled foreign corporation related to
PNC Funding or PNC, through stock ownership,
- the non-U.S. holder is not a bank receiving interest described in Section
881(c)(3)(A) of the Code,
- the non-U.S. holder as the beneficial owner of the senior note either (i)
provides a statement signed under penalties of perjury that includes the
beneficial owner's name, address and U.S. taxpayer identification number,
if any, and certifies (on an IRS Form W-8BEN or a substantially similar
substitute form) that the beneficial owner of the senior note is a
non-U.S. holder in compliance with applicable requirements, or (ii) holds
its note directly through a "qualified intermediary," and the qualified
intermediary has sufficient information in its files indicating that the
beneficial owner is not a United States holder, and
- PNC, PNC Funding, its paying agent and all intermediaries between the
non-U.S. holder and PNC Funding or its paying agent do not have actual
knowledge or reason to know that the non-U.S. beneficial ownership
statement is false.
A "qualified intermediary" is a bank, broker or other intermediary that (1)
is either a U.S. or non-U.S. entity, (2) is acting out of a non-U.S. branch or
office and (3) has signed an agreement with the Internal Revenue Service
providing that it will administer all or part of the U.S. withholding rules
under specified procedures.
A payment of stated interest on a senior note to a non-U.S. holder who
fails to satisfy one of the foregoing requirements generally will be subject to
withholding tax at a rate of 30% (subject to reduction or exemption under any
applicable tax treaty) unless
- the payment is effectively connected with a trade or business conducted
within the United States by that non-U.S. holder,
- the non-U.S. holder provides a properly completed IRS Form W-8ECI prior
to the payment of interest, and
- PNC, PNC Funding, its paying agent and all intermediaries between the
non-U.S. holder and PNC Funding or its paying agent do not have actual
knowledge or reason to know that the form is false.
S-20
Interest on a senior note that is effectively connected with the conduct of
a trade or business in the United States by a non-U.S. holder, although exempt
from the withholding tax (assuming appropriate certification is provided),
generally will be subject to graduated United States federal income tax on a net
income basis as if those amounts were earned by a United States holder.
Corporate non-U.S. holders receiving effectively connected interest may also be
subject to an additional branch profits tax.
Sale or Redemption of Senior Notes
Except as described below and subject to the discussion concerning backup
withholding, a non-U.S. holder generally will not be subject to United States
federal income tax with respect to any gain realized upon the sale or redemption
of a senior note unless (i) the gain is effectively connected with a United
States trade or business of the non-U.S. holder or (ii) subject to certain
exceptions, the non-U.S. holder is an individual who holds the senior note as a
capital asset and is present in the United States for 183 days or more in the
taxable year of the disposition.
United States Federal Estate Tax
A senior note held by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to United States
federal estate tax as a result of such individual's death if at the time of
death (i) the individual did not own actually or constructively 10% or more of
the total combined voting power of all classes of stock of PNC Funding or PNC
and (ii) payments of interest on senior notes held by such individual would not
have been effectively connected with a United States trade or business.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, senior notes held by a non-corporate United
States holder. Payments made on, and proceeds from the sale of, senior notes
held by a United States holder may be subject to a "backup" withholding tax of
up to 31% unless the holder complies with certain identification or exemption
requirements.
Payments of stated interest and of proceeds from the sale of senior notes
made to a non-U.S. holder will not be subject to information reporting or backup
withholding tax if the holder certifies as to its non-U.S. status or otherwise
establishes entitlement to exemption and the payor has no actual knowledge or
reason to know that the holder is in fact a United States holder. A non-U.S.
holder may certify to its non-U.S. status by providing an IRS Form W-8BEN or
W-8ECI or a substantially similar substitute form or holding its senior note
through a Qualified Intermediary with sufficient information in its files as
described above. With some exceptions, a payment to a foreign partnership will
be treated as a payment directly to its partners. Notwithstanding the foregoing,
interest payments to a non-U.S. holder may be reported to the IRS on Form
1042-S.
Any amount withheld, whether with respect to a United States holder or a
non-U.S. holder, will be allowed as a credit against the holder's United States
federal income tax liability, or refunded, provided the required information is
provided to the IRS.
HOLDERS OF SENIOR NOTES SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
APPLICATION OF INFORMATION REPORTING AND BACKUP WITHHOLDING IN THEIR PARTICULAR
SITUATIONS, THE AVAILABILITY OF AN EXEMPTION THEREFROM, AND THE PROCEDURE FOR
OBTAINING SUCH AN EXEMPTION, IF AVAILABLE.
Proposed European Union Withholding Directive
The European Union is currently considering proposals for a new directive
regarding the taxation of savings income. According to the most recently
available information it is proposed that, subject to a number of important
conditions being met, Member States will be required to provide to the tax
authorities of another Member State details of payments of interest or other
similar income paid by a person within its jurisdiction to an individual
resident in that other Member State, subject to the right of certain individual
Member States to opt instead for a withholding system for a transitional period
in relation to such payments. Full details of the proposals are not currently
available, and they may in any case be subject to further amendment.
S-21
UNDERWRITING
J.P. Morgan Securities Inc. and Salomon Smith Barney Inc. are acting as
joint bookrunning managers of the offering and, together with Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and PNC Capital Markets,
Inc., are acting as representatives of the underwriters named below.
Subject to the terms and conditions stated in the underwriting agreement,
dated the date of this prospectus supplement, each underwriter named below has
agreed to purchase, and we have agreed to sell to that underwriter, the
principal amount of senior notes set forth opposite the underwriter's name.
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF 2003 NOTES OF 2006 NOTES
----------- ---------------- ----------------
J.P. Morgan Securities Inc. ..................
Salomon Smith Barney Inc. ....................
Goldman, Sachs & Co. .........................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................
PNC Capital Markets, Inc. ....................
Total.................................... $ $
=========== ===========
We have been advised by the underwriters that they propose initially to
offer the senior notes to the public at the public offering prices set forth on
the cover page of this prospectus supplement, and to certain dealers at that
price less a concession not in excess of % of the principal amount of the
2003 Notes and % of the principal amount of the 2006 Notes. The
underwriters may allow, and these dealers may reallow, a concession to certain
other dealers not in excess of % of the principal amount of the 2003 Notes
and % of the principal amount of the 2006 Notes. After the initial public
offering, the public offering price and these concessions may be changed from
time to time.
The following table shows the underwriting discounts and commissions that
PNC Funding is to pay to the underwriters in connection with this offering
(expressed as a percentage of the principal amount of each series of senior
notes).
PAID BY PNC FUNDING CORP
------------------------
Per senior note due 2003.............................. %
Per senior note due 2006.............................. %
Although application has been made to list the senior notes on the
Luxembourg Stock Exchange, the senior notes are new issues of securities with no
established trading market. The underwriters have advised us that they intend to
make a market in both the 2003 Notes and the 2006 Notes, but the underwriters
are not obligated to do so and may discontinue any market making at any time
without notice. The trading markets for the senior notes may not be liquid.
The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters will purchase all the senior notes if any are purchased.
In connection with this offering, some of the underwriters and their
respective affiliates may engage in transactions that stabilize, maintain, or
otherwise affect the market prices of the senior notes. In any jurisdiction
where there can be only one stabilizing agent, or its affiliates shall
effect such transactions. Those transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M, pursuant to
which those underwriters and affiliates may bid for or purchase the 2003 Notes
or the 2006 Notes for the purpose of stabilizing the market price. The
underwriters also may create short positions for the account of the underwriters
by selling more 2003 Notes or 2006 Notes in connection with this offering than
they are committed to purchase from us. In that case, the underwriters may
purchase such senior notes in the open market following completion of this
offering to cover their short position or positions. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
2003 Notes or the 2006 Notes at levels above those which might otherwise prevail
in the open market. None of the transactions described in this paragraph is
required, and, if they are undertaken, they may be discontinued at any time.
S-22
The underwriters and their respective associates and affiliates may be
customers of, engage in transactions with, and perform investment banking and
other financial services (including commercial lending) for us and our
subsidiaries in the ordinary course of business. PNC Capital Markets, Inc., one
of our indirect wholly-owned subsidiaries, is acting as one of the underwriters.
When a member of the National Association of Securities Dealers, Inc. ("NASD"),
such as PNC Capital Markets, Inc., participates in the distribution of an
affiliated company's securities, the offering must be conducted in accordance
with applicable provisions of the NASD's Conduct Rule 2720. We are considered to
be an "affiliate" (as such term is defined in Rule 2720) of PNC Capital Markets,
Inc. Our offer and sale of the senior notes will comply with the applicable
requirements of Rule 2720 regarding the underwriting of securities of
affiliates. No NASD member participating in the offering of the 2003 Notes or
the 2006 Notes will execute a transaction in such senior notes in a
discretionary account without the prior written specific approval of the
member's customer. The Chase Manhattan Bank, an affiliate of J.P. Morgan
Securities Inc., is the trustee under the Indenture.
This prospectus supplement and the accompanying prospectus may be used by
PNC Capital Markets, Inc. and J.J.B. Hilliard, W.L. Lyons, Inc. in connection
with offers and sales related to secondary market transactions in the senior
notes. PNC Capital Markets, Inc., J.J.B. Hilliard, W.L. Lyons, Inc. and
affiliates of PNC and PNC Funding may act as principal or agent in those
transactions. Those sales will be made at prices related to prevailing market
prices at the time of sale or otherwise.
The underwriting agreement provides that PNC Funding and PNC will jointly
and severally indemnify the underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or contribute to
payments the underwriters may be required to make in respect of those
liabilities.
OFFERING RESTRICTIONS
The senior notes are offered for sale in the United States and in
jurisdictions outside the United States, subject to applicable law.
Each of the underwriters has agreed that it will not offer, sell, or
deliver any of the senior notes, directly or indirectly, or distribute this
prospectus supplement or the accompanying prospectus or any other offering
material relating to the senior notes, in or from any jurisdiction outside the
United States except under circumstances that will, to the best of the
underwriter's knowledge and belief, result in compliance with the applicable
laws and regulations and which will not impose any obligations on us except as
set forth in the underwriting agreement.
You may be required to pay stamp taxes and other charges in accordance with
the laws and practices of the country in which you purchase the senior notes.
These taxes and charges are in addition to the issue price set forth on the
cover page.
UNITED KINGDOM
Each underwriter has represented and agreed that it and each of its
affiliates:
- has not offered or sold and, prior to the expiry of the period of
six months from the time of closing, will not offer or sell any of
the senior notes to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding,
managing, or disposing of investments (as principal or agent) for
the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, as amended;
- has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the senior notes in, from or otherwise involving the
United Kingdom; and
S-23
- has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
issue of the senior notes to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions Order 1996, as amended) or is a person
to whom those documents may otherwise lawfully be issued or passed
on.
GERMANY
In connection with the initial placement of senior notes in Germany, each
of the underwriters has represented and agreed that it has not offered or sold
and it will not offer or sell any senior notes in Germany other than in
compliance with the Securities Prospectus Act
(Wertpapier-Verkaufsprospektgesetz) of 13th December, 1990 as amended or any
other law applicable in Germany governing the issue, offering and sale of
securities.
THE NETHERLANDS
Each of the underwriters has represented and agreed that it has not,
directly or indirectly, offered or sold and will not, directly or indirectly,
offer or sell in the Netherlands any senior notes other than to persons who
trade or invest in securities in the conduct of a profession or business (which
include banks, stockbrokers, insurance companies, pension funds, other
institutional investors and finance companies and treasury departments of large
enterprises).
THE REPUBLIC OF FRANCE
Each of the underwriters has represented and agreed that the senior notes
are being issued outside of France, and that it, in connection with the initial
distribution of the senior notes, has not offered or sold and will not offer or
sell senior notes in France, and that it has not distributed and will not
distribute or cause to be distributed in France this prospectus supplement and
accompanying prospectus or any other offering material relating to the senior
notes, except to (i) qualified investors (investisseurs qualifies) and/or (ii) a
restricted circle of investors (Cercle restreint d'investisseurs), all as
defined in Article 6 of the Order ("Ordinance") dated 28th September, 1967 (as
amended) and Decree no. 98-880 dated 1st October, 1998 and in compliance with
regulations issued from time to time by the Commission des Operations de Bourse.
JAPAN
The senior notes have not been and will not be registered under the
Securities and Exchange Law of Japan and each of the underwriters has
represented and agreed that it and its affiliates have not offered or sold, and
will not offer or sell, directly or indirectly, any of the senior notes in or to
residents of Japan or to any persons for reoffering or resale, directly or
indirectly, in Japan or to any resident of Japan, except pursuant to an
exemption from the registration requirements of the Securities and Exchange Law
available thereunder and in compliance with the other relevant laws and
regulations of Japan.
HONG KONG
Each of the underwriters has represented and agreed that it and its
affiliates have not offered or sold, and will not offer or sell, any of the
senior notes by means of any document to persons in Hong Kong other than persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent, or otherwise in circumstances which do not constitute an
offer to the public within the meaning of the Hong Kong Companies Ordinance
(Chapter 32 of the Laws of Hong Kong).
S-24
LEGAL OPINIONS
The legal opinion required to be furnished by PNC Funding and PNC pursuant
to the underwriting agreement, dated the date of this prospectus supplement,
among PNC Funding and the underwriters will be rendered by Thomas R. Moore,
Esq., Senior Counsel and Corporate Secretary of PNC. As of July 24, 2001, Mr.
Moore was the beneficial owner of 2,256 shares of common stock of PNC. Mr. Moore
also holds unexercised nonstatutory options to purchase 3,500 shares of common
stock of PNC.
The underwriters are represented by Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019. As to matters of Pennsylvania law, Cravath,
Swaine & Moore will rely on the opinion of Thomas R. Moore, Esq., Senior Counsel
and Corporate Secretary of PNC.
EXPERTS
Ernst & Young LLP, independent auditors, have audited PNC's consolidated
financial statements incorporated by reference in PNC's Annual Report on Form
10-K for the year ended December 31, 2000, as set forth in their report, which
is incorporated by reference in this document. PNC's consolidated financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given their authority as experts in accounting and auditing.
S-25
GENERAL INFORMATION
(1) In connection with the application to list the senior notes on the
Luxembourg Stock Exchange, a legal notice relating to the issue of the
senior notes and copies of the Articles of Incorporation and By-laws of PNC
Funding and the Articles of Incorporation, as amended and restated, and
By-laws of PNC will be deposited with the Chief Registrar of the District
Court in Luxembourg (Greffier en Chef du Tribunal d'Arrondissement de et
Luxembourg) where such documents may be examined and copies obtained free of
charge.
(2) PNC Funding and PNC have obtained all necessary consents, approvals and
authorizations in connection with the issue, performance and/or guaranty of
the senior notes. The issuance of the senior notes was authorized by
resolutions adopted by the Board of Directors of PNC Funding on April 19,
1999. The guaranty of the senior notes was authorized by resolutions adopted
by the Board of Directors of PNC on April 19, 1999.
(3) The senior notes have been accepted for clearance through DTC in the United
States, and through the Euroclear and Clearstream, Luxembourg clearance
systems in Europe. The CUSIP number for the 2003 Notes is and for the 2006
Notes is . The International Securities Identification Number (ISIN) for the
2003 Notes is and for the 2006 Notes is . The Common Code for the 2003 Notes
is and for the 2006 Notes is .
(4) The independent certified public accountants of PNC are Ernst & Young LLP.
Ernst & Young, a leading accounting and auditing firm in the United States
and Canada, is located at One Oxford Center, Pittsburgh, Pennsylvania 15219.
Ernst & Young provided various audit and other services for PNC during 2000.
Such services included an audit of annual consolidated financial statements,
interim reviews of quarterly consolidated financial statements, review and
consultation connected with certain filings with the Securities and Exchange
Commission, internal control reviews required by regulatory authorities and
certain contractual agreements or requested by PNC's management or internal
audit staff, consultation on tax, financial accounting and reporting
matters, and meetings with the audit committee of the Board of Directors of
PNC.
(5) Except as disclosed herein or in the documents incorporated herein by
reference, as of the date of this prospectus supplement there has been no
material adverse change in the consolidated financial position of PNC
Funding or PNC since the date of the last financial statements.
(6) Neither PNC Funding nor PNC is a party to any litigation, administrative
proceedings or arbitration which is or may be material in the context of the
issue of the senior notes and to their knowledge none has been threatened.
(7) Prior to the completion of issuance of the senior notes, the following
documents will be available for inspection (and obtainable in the case of
the documents incorporated by reference (see below)) during usual business
hours on any business day at the offices of the Luxembourg paying and
listing agent:
- the underwriting agreement;
- the Articles of Incorporation and By-laws of PNC Funding and the amended
and restated Articles of Incorporation and By-laws of PNC;
- the documents incorporated by reference into this prospectus supplement
and the accompanying prospectus; and
- a copy of this prospectus supplement together with the accompanying
prospectus.
(8) Copies of the documents incorporated by reference may be obtained free
of charge at the offices of the Luxembourg paying and listing agent
during usual business hours on any business day. Such documents include
PNC's:
(a) most recent audited consolidated annual financial statements for the
year ended December 31, 2000 and, for so long as a series of the senior
notes are listed on Luxembourg Stock Exchange, all audited consolidated
annual financial statements subsequently filed with the Securities and
Exchange Commission no later than the tenth business day after such
audited consolidated annual financial statements are filed; and
S-26
(b) most recent unaudited consolidated quarterly interim financial
statements, and for so long as a series of the senior notes are listed
on Luxembourg Stock Exchange, all unaudited consolidated quarterly
interim financial statements subsequently filed with the Securities and
Exchange Commission no later than the tenth business day after such
unaudited consolidated quarterly interim financial statements are
filed.
S-27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$1,000,000,000
PNC FUNDING CORP
$ FLOATING RATE SENIOR NOTES DUE 2003
$ % SENIOR NOTES DUE 2006
UNCONDITIONALLY GUARANTEED BY
THE PNC FINANCIAL SERVICES GROUP, INC.
PNC LOGO
------------------
PROSPECTUS SUPPLEMENT
, 2001
------------------
JPMORGAN
SALOMON SMITH BARNEY
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
PNC CAPITAL MARKETS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------