Mutual Reliance Review System for ExemptiveRelief Applications -- Subsidiary of U.S. corporation whereU.S. parent is credit supporter exempt from GAAP reconciliationrequirements and eligiblity requirements of NI 44-101 and AIFrequirement for future offerings - Subsidiary further exemptfrom MD&A requirements, material change requirements, proxyrequirements and insider reporting requirements - Relief subjectto conditions, including filing, under issuer's SEDAR profileof documents filed by the credit supporter of the issuer withthe Securities and Exchange Commission.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 75, 80(b)(iii), 77, 78, 107, 108, 109 and 121(2)(a)(ii).
National Instrument 44-101 - Short Form ProspectusDistributions.
National Instrument 44-102 - Shelf Distributions.
National Instrument 71-101 - MultijurisdictionalDisclosure System.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, MANITOBA, ONTARIO, QUEBEC,
NEW BRUNSWICK, NEWFOUNDLANDAND LABRADOR, NOVA SCOTIA,
PRINCE EDWARD ISLAND, YUKON,NORTHWEST TERRITORIES AND NUNAVUT
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
FORD MOTOR CREDIT COMPANY
AND FORD CREDIT CANADA LIMITED
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Quebec, New Brunswick, Newfoundland and Labrador, Nova Scotia,Prince Edward Island, Yukon, Northwest Territories and Nunavut(the "Jurisdictions") has received an applicationfrom Ford Motor Credit Company ("Ford Credit") andits subsidiary Ford Credit Canada Limited (the "Issuer",and together with Ford Credit, the "Filer") for adecision under the securities legislation of the Jurisdictions(the "Legislation") that the following requirementscontained in the Legislation shall not apply:
(a) the requirement under National Instrument44-101 Short Form Prospectus Distributions ("NI44-101") and National Instrument 44-102 Shelf Distributions("NI 44-102") that Ford Credit must be a reportingissuer with a 12-month reporting history in a Jurisdiction(the "Eligibility Requirement") in connection withthe issuance by the Issuer of non-convertible debt securities("Notes") with an Approved Rating (as such termis defined in NI 44-101) which are and will continue to befully and unconditionally guaranteed by Ford Credit pursuantto the Prospectus (as defined below) and any subsequentlyfiled short form base shelf prospectus, and, if applicable,prospectus supplement and pricing supplement filed under NI44-101 and NI 44-102 (collectively, a "Renewal Prospectus");
(b) the requirements under NI 44-101 that(i) the financial statements of Ford Credit that are incorporatedor included in the Prospectus and any Renewal Prospectus ofthe Issuer which are prepared in accordance with U.S. generallyaccepted accounting principles and audited in accordance withU.S. generally accepted auditing standards be reconciled toCanadian generally accepted accounting principles, and (ii)that the report of Ford Credit's auditor be reconciled toCanadian standards by disclosing any material differencesin form and content from a Canadian auditor's report and byconfirming that the auditing standards applied are substantiallyequivalent to Canadian generally accepted auditing standards(the "Reconciliation Requirements");
(c) the requirement under clause 13.1(1)2of Form 44-101F3 under NI 44-101 that a summary of financialinformation relating to the Issuer's operations be includedin a note to Ford Credit's annual financial statements thatare incorporated or included in the Prospectus and any RenewalProspectus (the "Summary Financial Information Requirement");
(d) the requirements that the Issuer:
(i) issue and file with the Decision Makerspress releases and file with the Decision Makers materialchange reports (together, the "Material Change Requirements");
(ii) comply with the proxy and proxy solicitationrequirements, including filing with the Decision Makersof an information circular or, if not applicable, a reportin the prescribed form (the "Proxy Requirements");and
(iii) in Ontario, Quebec and Saskatchewan,the Issuer file with the applicable Decision Maker an annualinformation form, and, where applicable, interim and annualmanagement discussion and analysis (collectively the "AnnualInformation Form and MD&A Requirements").
AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;
AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;
AND WHEREAS the Filer has representedto the Decision Makers that:
1. Ford Credit was incorporated under thelaws of the State of Delaware in 1959 and is not a reportingissuer or the equivalent in any of the Jurisdictions.
2. Ford Credit has been a reporting companyunder the United States Securities Exchange Act of 1934, asamended (the "1934 Act"), for more than 20 yearswith respect to its debt securities. Ford Credit has filedwith the United States Securities and Exchange Commission(the "SEC") all filings required to be made withthe SEC under sections 13 and 15(d) of the 1934 Act sinceit first became a reporting company under the 1934 Act.
3. As at December 31, 2002, Ford Credit hadin excess of US$124 billion in long-term debt outstanding.All of Ford Credit's outstanding long-term debt is rated "BBB"by Standard & Poor's, "A3" by Moody's InvestorsService, and "BBB+" by Fitch, Inc.
4. Ford Credit has, for a period of more than12 months, filed its annual reports on Form 10K, quarterlyreports on Form 10Q, and current reports on Form 8K in Canadaunder the System for Electronic Document Analysis and Retrieval("SEDAR") established by National Instrument 13-101,under the SEDAR profile of the Issuer.
5. The common stock in the capital of FordCredit is indirectly owned by Ford Motor Company ("Ford"),a publicly traded Delaware corporation.
6. Ford Credit offers a wide variety of automotivefinancial services to and through automotive dealers throughoutthe world under the Ford Credit brand name and through dealersof Ford vehicles and non-Ford dealers. For the year endedDecember 31, 2002, the net income of Ford Credit was approximatelyUS$1.2 billion.
7. The registered and principal office ofthe Issuer is in Ontario.
8. The Issuer was incorporated under the federallaws of Canada on July 23, 1962 and was continued under theCanada Business Corporations Act on December 5, 1980.The Issuer is an indirect wholly-owned subsidiary of FordCredit.
9. The Issuer provides wholesale financingand capital loans to authorized Ford Motor Company of Canada,Limited vehicle dealers and purchases retail installment salecontracts and retail leases from such dealers. The Issueralso makes loans to vehicle leasing companies, the majorityof which are affiliated with such dealers.
10. The Issuer is, and has been for more than12 months, a reporting issuer or the equivalent thereof inall Jurisdictions and will continue to be a reporting issueror the equivalent thereof in the Jurisdictions. As of thedate hereof, the Issuer is not in default of any requirementsunder the Legislation.
11. The long-term debt of the Issuer is currentlyrated "BBB(High)" by Dominion Bond Rating ServiceLimited, "BBB" by Standard & Poor's, "A3"by Moody's Investors Service, and "BBB+" by Fitch,Inc.
12. As of June 12, 2003, the Issuer had approximatelyCdn.$4.19 billion of Notes outstanding.
13. Ford Credit satisfies all the criteriaset forth in paragraph 3.1(a) of National Instrument 71-101("NI 71-101") and is eligible to use the multi-jurisdictionaldisclosure system ("MJDS") (as set out in NI 71-101)for the purpose of distributing approved rating non-convertibledebt in Canada based on compliance with United States prospectusrequirements with certain additional Canadian disclosure.
14. Except for the fact that the Issuer isnot incorporated under United States law, Future Offerings(as defined below) would comply with the alternative eligibilitycriteria for offerings of non-convertible debt having an approvedrating under the MJDS as set forth in paragraphs 3.1 and 3.2of NI 71-101.
15. In the circumstances, were Ford Creditto effect an offering of the Notes under the MJDS it wouldbe unnecessary for it to reconcile to Canadian GAAP its financialstatements included in or incorporated by reference into theprospectus in connection with the issuance of the Notes.
16. Part 7 of NI 44-101 and Item 20.1 of Form44-101F3 of NI 44-101 require the reconciliation to CanadianGAAP of financial statements prepared in accordance with foreignGAAP that are included in a short form prospectus.
17. The Issuer does not satisfy the alternativequalification criteria for issuers of guaranteed non-convertibledebt securities, as set out in section 2.5 of NI 44-101, solelybecause Ford Credit (as guarantor of Future Offerings) isnot a reporting issuer or the equivalent in any Jurisdictionnotwithstanding that Ford Credit has filed in the Jurisdictionsfor more than 12 months its continuous disclosure documentsfiled with the SEC in the U.S.
18. The Issuer has established a program toraise up to approximately Cdn.$3 billion in Canada throughthe issuance of Notes from time to time during the currencyof the Prospectus (as defined below), pursuant to a shortform base shelf prospectus dated December 6, 2002, prospectussupplement dated December 6, 2002 and applicable pricing supplements(collectively, the "Prospectus"), and the Issuerintends to effect future offerings ("Future Offerings")of Notes by filing a Renewal Prospectus upon the lapse ofthe Prospectus and each Renewal Prospectus.
19. The Issuer was exempted from the ReconciliationRequirements and the Summary Financial Information Requirementin respect of the Prospectus as was evidenced by the issuanceof a receipt therefor by the Decision Makers.
20. The Notes are and will continue to befully and unconditionally guaranteed by Ford Credit as topayment of principal, premium, if any, and interest, if any,such that the holders thereof will be entitled to receivepayment from Ford Credit upon the failure by the Issuer tomake any such payment. All Notes are and will continue tohave an Approved Rating (as defined in NI 44-101).
AND WHEREAS under the System this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");
AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers inOntario, Québec and Saskatchewan is that the Annual InformationForm and MD&A Requirements shall not apply to the Issuer,so long as the Issuer and Ford Credit comply with all of therequirements of the Decisions below.
September 30, 2003.
THE DECISION of the Decision Makers underthe Legislation is that the Eligibility Requirement, the ReconciliationRequirements and the Summary Financial Information Requirementshall not apply to offerings of Notes under the Prospectus orto Future Offerings under any Renewal Prospectus provided that:
(a) the Issuer complies with all of the otherrequirements of NI 44-101 and NI 44-102, except as variedin paragraph (c) below;
(b) at all times during the currency of theProspectus and each Renewal Prospectus:
(i) Ford Credit files with the DecisionMakers an annual information form in the form of an annualreport on Form 10-K ("Ford Credit's AIF") foreach of its subsequently completed fiscal years ended December31, in electronic format through SEDAR (as defined in NationalInstrument 13-101) under the Issuer's SEDAR profile on thesame date as, or as soon as practicable after, the dateon which Ford Credit files or furnishes the material tothe SEC; and
(ii) Ford Credit files with the DecisionMakers, in electronic format under the Issuer's SEDAR profile,the Form 10Qs and the Form 8Ks that Ford Credit has filedunder sections 13 and 15(d) of the 1934 Act on the samedate as, or as soon as practicable after, the date on whichFord Credit files or furnishes the material to the SEC;
(c) each Renewal Prospectus is prepared pursuantto the procedures contained in NI 44-101 and NI 44-102 andcomplies with the requirements set out in Form 44-101F3, withthe disclosure required by Item 12 of Form 44-101F3 beingaddressed by incorporating by reference Ford Credit's publicdisclosure documents as well as Ford Credit's AIF, and insteadof the financial information disclosure required by item 13.1(1)2of Form 44-101F3, the Issuer will incorporate by referencein each Renewal Prospectus the applicable documents set forthin paragraphs (j) and (k) of the Further Decision below;
(d) each Renewal Prospectus includes all materialdisclosure concerning the Issuer;
(e) each Renewal Prospectus incorporates byreference disclosure made in Ford Credit's most recent Form10-K (as filed under the 1934 Act) together with all Form10-Qs and Form 8-Ks filed under the 1934 Act in respect ofthe financial year following the year that is the subjectof Ford Credit's most recently filed Form 10-K and incorporatesby reference any documents of the foregoing type filed afterthe date of such Renewal Prospectus and prior to terminationof the applicable Future Offering;
(f) the consolidated annual and interim financialstatements of Ford Credit that will be included in or incorporatedby reference into the Prospectus and each Renewal Prospectusare prepared in accordance with U.S. GAAP as supplementedby the SEC and otherwise comply with the requirements of U.S.law, and in the case of audited financial statements, suchfinancial statements are audited in accordance with U.S. GAAS;
(g) Ford Credit continues to fully and unconditionallyguarantee the Notes as to the payments required to be madeby the Issuer to holders of the Notes;
(h) the Notes have an Approved Rating (asdefined in NI 44-101);
(i) Ford Credit signs each Renewal Prospectusas credit supporter;
(j) Ford Credit or an affiliate thereof remainsthe direct or indirect beneficial owner of all the issuedand outstanding voting securities of the Issuer;
(k) Ford Credit continues to satisfy the criteriaset forth in paragraph 3.1 of NI 71-101 (or any successorprovision) and remains eligible to use MJDS (or any successorinstrument) for the purpose of distributing approved ratingnon-convertible debt in Canada; and
(l) Ford Credit undertakes to file with theDecision Makers, in electronic format under the Issuer's SEDARprofile, all documents that it files under sections 13 and15(d) of the 1934 Act until such time as the Notes are nolonger outstanding.
September 30, 2003.
THE FURTHER DECISION of the DecisionMakers under the Legislation is that the Material Change Requirementsand the Proxy Requirements (collectively, the "ContinuousDisclosure Requirements"), in all Jurisdictions havingContinuous Disclosure Requirements, shall not apply to the Issuer,so long as:
(a) in place of the Material Change Requirements:(i) Ford Credit files with the Decision Makers the mandatoryreports on Form 8-K (including press releases) filed by FordCredit with the SEC on the same date as, or as soon as practicableafter, the date on which Ford Credit files the report withthe SEC; (ii) Ford Credit forthwith issues in each Jurisdictionany press release that discloses material information andwhich is required to be issued in connection with the mandatoryForm 8-K requirements applicable to Ford Credit; (iii) ifthere is a material change in respect of the business, operationsor capital of the Issuer that is not a material change inrespect of Ford Credit, the Issuer will comply with the requirementsof the Legislation to issue a press release and file a materialchange report notwithstanding that the change may not be materialin respect of Ford Credit; and (iv) such documents are provided,as soon as practicable, to holders of Notes whose last addressas shown on the books of the Issuer is in Canada, in the mannerand if required by applicable US law to be sent to Ford Creditdebt holders resident in the US;
(b) in the place of the Proxy Requirements:(i) Ford Credit shall comply with the requirements of the1934 Act and the rules and regulations thereunder relatingto proxy statements, proxies and proxy solicitations in connectionwith any meetings of its noteholders (if any); (ii) Ford Creditshall file with the Decision Makers the materials relatingto any such meeting filed by Ford Credit within one businessday after they are filed by Ford Credit with the SEC; and(iii) such documents are provided, as soon as practicable,to holders of Notes whose last address as shown on the booksof the Issuer is in Canada, in the manner and if requiredby applicable US law to be sent to Ford Credit debt holdersresident in the US;
(c) Ford Credit or an affiliate thereof remainsthe direct or indirect beneficial owner of all the issuedand outstanding voting securities of the Issuer;
(d) Ford Credit maintains a class of securitiesregistered pursuant to the 1934 Act;
(e) Ford Credit signs each Renewal Prospectusas credit supporter;
(f) Ford Credit continues to satisfy the criteriaset forth in paragraph 3.1 of NI 71-101 (or any successorprovision) and remains eligible to use MJDS (or any successorinstrument) for the purpose of distributing approved ratingnon-convertible debt in Canada;
(g) the Notes have an Approved Rating (asdefined in NI 44-101);
(h) Ford Credit continues to fully and unconditionallyguarantee the Notes as to the payments required to be madeby the Issuer to holders of the Notes;
(i) the Issuer does not issue additional securitiesother than Notes and debt securities ranking pari passuor junior to the Notes, and other than securities issued toFord Credit or Ford or to wholly owned subsidiaries of FordCredit or Ford;
(j) the Issuer continues to file, in electronicformat on SEDAR, annual audited comparative financial statementsfor each completed financial year, prepared in accordancewith generally accepted accounting principles in Canada ("CanadianGAAP"), accompanied by a report of the auditors of theIssuer;
(k) the Issuer continues to file, in electronicformat on SEDAR, interim comparative consolidated financialstatements for each completed interim period and the correspondinginterim period in the previous financial year, prepared inaccordance with Canadian GAAP, together with earnings coverageratios as and if required by the Legislation;
(l) such filings as are referred to in (j)and (k) above are provided, as soon as practicable, to holdersof Notes whose last address as shown on the books of the Issueris in Canada, in the manner and if required by applicableUS law to be sent to Ford Credit debt holders resident inthe US;
(m) Ford Credit provides, as soon as practicable,copies of all continuous disclosure documents filed by itwith the SEC under sections 13 and 15(d) of the 1934 Act,including, but not limited to, copies of any Form 10-K andForm 10-Q to holders of Notes whose last address as shownon the books of the Issuer is in Canada, in the manner andif required by applicable US law to be sent to Ford Creditdebt holders resident in the US;
(n) such filings as are referred to in (j)and (k) above are made within the time limits required bythe Legislation in respect of such financial statements; and
(o) all filing fees that would otherwise bepayable by the Issuer in connection with the Continuous DisclosureRequirements are paid.
September 30, 2003.
"Paul M. Moore"
"Wendell S. Wigle"