Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – exemption granted from certain prospectus incorporation by reference requirements to a credit support issuer of guaranteed medium term notes.
Applicable Legislative Provisions
National Instrument 44-101 Short Form Prospectus Distributions
Form 44-101F1 – Short Form Prospectus
August 22, 2014
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
CATERPILLAR FINANCIAL SERVICES LIMITED (the Issuer)
AND CATERPILLAR FINANCIAL SERVICES CORPORATION (the Guarantor and, together with the Issuer, the Filers)
DECISION
Background
The principal regulator in the Jurisdiction (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the Decision Maker (the Legislation) for a decision pursuant to Part 8 of National Instrument 44-101 – Short Form Prospectus Distributions (NI 44-101) that the Filers be exempt from the following requirements (collectively, the Exemption Sought):
(a) under Item 12.1(2.) of Form 44-101F1 – Short Form Prospectus (Form 44-101F1) to incorporate by reference the Non-Essential 8-Ks (as defined below) in a Prospectus (as defined below);
(b) Section 2.1(2) of NI 44-101, to the extent that such requirement to prepare a Prospectus in the form of Form 44-101F1 would include Item 12.1(2.) of Form 44-101F1; and
(c) Part 3 of NI 44-101, to the extent that such provisions would deem to incorporate by reference the Non-Essential 8-Ks in a Prospectus despite an exemption from Item 12.1(2.) of Form 44-101F1.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (collectively with the Jurisdiction, the Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filers:
The Guarantor
The principal executive offices of the Guarantor are located at 2020 West End Ave., Nashville, Tennesse, United State, 37203.
The Guarantor is a wholly-owned subsidiary of Caterpillar Inc., a Delaware corporation listed on the New York Stock Exchange under the symbol "CAT".
The Guarantor is not a reporting issuer or the equivalent in any of the Jurisdictions.
The Guarantor is a "U.S. credit supporter" (as defined in NI 44-101), in that it:
(a) was incorporated under the laws of the State of Delaware in 1981;
(b) is required to file reports under section 15(d) of the United States Securities Exchange Act of 1934 (the 1934 Act);
(c) has filed with the United States Securities and Exchange Commission (the SEC) all filings required to be made under Sections 13 and 15(d) of the 1934 Act since the Guarantor first became a reporting company in 1985;
(d) is not registered or required to be registered as an investment company under the United States Investment Company Act of 1940; and
(e) is not a commodity pool issuer as defined in National Instrument 71-101 – The Multijurisdictional Disclosure System.
The Guarantor is the "parent credit supporter" (as defined in National Instrument 51-102 – Continuous Disclosure Obligations (NI 51-102)) in respect of the Issuer Notes Program (as defined below).
The Guarantor has outstanding debt securities issued under its notes programs established from time to time in the United States (collectively, the Guarantor Notes Program).
The Issuer
The Issuer was continued under the Business Corporations Act (Ontario) on March 6, 2012.
The registered and principal office of the Issuer is located at 3457 Superior Court, Unit 2, Oakville, Ontario, L6L 0C4.
The Issuer is a direct wholly-owned finance subsidiary of Caterpillar Financial Nova Scotia Corporation, which is a direct wholly-owned subsidiary of the Guarantor.
The Issuer is not in default of any of its obligations under the securities legislation of any Jurisdiction.
The Issuer is a "credit support issuer" (as defined in NI 51-102) that qualifies for the exemptions contemplated by, and is in compliance with the requirements and conditions set out in, Section 13.4(2) of NI 51-102.
The Issuer became a reporting issuer or its equivalent in the Jurisdictions on July 17, 2001 by virtue of being issued a receipt for a final short form base shelf prospectus filed in each of the Jurisdictions, qualifying the distribution, from time to time during the period that the final short form base shelf prospectus remained valid (the Issuer Notes Program), of unsecured, unsubordinated medium term notes of the Issuer (the Notes).
The outstanding Notes have a "designated rating", as such term is defined in NI 44-101.
The Issuer Notes Program has been renewed, and the Issuer expects to continue to renew the Issuer Notes Program, from time to time, through the filing of further short form base shelf prospectuses (each, a Prospectus) in the Jurisdictions.
The Notes are fully and unconditionally guaranteed by the Guarantor as to payment of principal, interest and certain other amounts due thereunder and the holders of such Notes are entitled to receive payment from the Guarantor following the failure by the Issuer to make any such payment.
Pursuant to Section 12.1(2.) of 44-101F1, the Issuer is required to incorporate by reference all 1934 Act filings of the Guarantor that would be required to be incorporated by reference in a Form S-3 or a Form F-3 registration statement filed under the United States Securities Act of 1933 if the securities distributed under the Prospectus were being registered on Form S-3 or Form F-3.
The Non-Essential 8-Ks
In connection with issuances of debt securities by the Guarantor under the Guarantor Notes Program, the Guarantor is required to file with the SEC current reports on Form 8-K (the Non-Essential 8-Ks) whose contents are non-financial in nature and are comprised solely of (a) exhibits attaching opinions (and related consents) of legal counsel as to certain matters relating to the notes issued under the Guarantor Notes Program, including certain federal tax matters concerning the notes, the legality of the issuance of such notes, and whether such notes will be binding obligations of the Guarantor, and (b) disclosures referencing such exhibits.
The Non-Essential 8-Ks are publicly available under the profile of the Guarantor on the Electronic Data Gathering, Analysis and Retrieval System in the United States and the profile of the Issuer on the System for Electronic Document Analysis and Retrieval (SEDAR) in Canada.
By virtue of the Non-Essential 8-Ks being filed as reports on Form 8-K or being attached as exhibits or being incorporated by reference into the Guarantor's filings with the SEC, the Issuer is required to incorporate the Non-Essential 8-Ks into each Prospectus.
Decision
The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted with respect to each Prospectus provided that:
(a) the Issuer satisfies the conditions in the definition of "credit support issuer" in NI 51-102;
(b) the Guarantor satisfies the conditions in the definition of "parent credit supporter" in NI 51-102;
(c) the Notes satisfy the conditions in the definition of "designated credit support securities" in NI 51-102;
(d) the Issuer complies with all of the other applicable requirements of NI 44-101 and Form 44-101F1, except as varied by this decision or otherwise permitted under National Instrument 44-102 – Shelf Distributions;
(e) the Notes have a "designated rating" as such term is defined in NI 44-101;
(f) the Issuer discloses in each Prospectus that it has obtained the Exemption Sought; and
(g) the Issuer files the Non-Essential 8-Ks on SEDAR at the same time or as soon as practicable after the filing by the Guarantor of those documents with the SEC.
"Sonny Randhawa"
_________________________
Manager, Corporate Finance
Ontario Securities Commission