Ford Motor Credit Company LLC
Ford Interest Advantage
FLOATING RATE DEMAND NOTES
Ford Motor Credit Company LLC offers its Ford Interest Advantage Floating Rate Demand Notes, referred to hereafter as the Notes, as a convenient means of investing directly in Ford Motor Credit Company LLC
("Ford Credit"). The Notes pay interest at a floating rate. Ford Credit files pricing supplements with the Securities and Exchange Commission
(the "SEC") that disclose the then-current interest rate on the Notes.
Key aspects of the Ford Interest Advantage program are:
- The Notes will pay interest above the average rate of taxable U.S. money market funds.
- You may redeem your Notes at any time.
- Your investment is recorded by an Agent Bank appointed by us.
- Interest payable on the Notes will accrue and be compounded daily and be automatically reinvested in Notes on the last day of each month.
Key factors to consider before investing include:
- The Notes are not equivalent to a deposit or other bank account and are not insured by the Federal Deposit Insurance Corporation or any other insurance.
- The Notes are not an investment in a money market mutual fund, in which investors purchase an interest in a diversified fund consisting of investments in short term debt securities of
many companies, and are not subject to the requirements of the Investment Company Act of 1940 (including requirements relating to diversification and quality of investments).
- The Notes are not an investment in a money market mutual fund and are not subject to the requirements of the Investment Company Act of 1940 (including requirements relating to diversification and quality of investments).
- The Notes are not obligations of or guaranteed by Ford Motor Company, the Agent Bank or anyone else.
- The Notes are unsecured obligations of Ford Credit and only Ford Credit's assets that have not been sold or securitized are available to pay the principal of and interest on the Notes. It is possible for you to lose some or all of your investment in the Notes, including accrued interest, if Ford Credit is unable to pay its debts, becomes bankrupt or seeks creditor protection.
- The Notes are not transferable.
Investment in the Notes involves certain risks. See "Risk Factors" beginning on Page 6 of this prospectus.
The Notes will rank equally and ratably with all other unsecured senior indebtedness of Ford Motor Credit Company LLC (parent company only). At June 30, 2015, Ford Credit had outstanding debt of $109.5 billion on a consolidated basis.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this Prospectus is October 7, 2015
TABLE OF CONTENTS
You should rely only on the information contained or incorporated by reference in this Prospectus (including any applicable pricing supplements). No one has been authorized to provide you with different information.
The Notes are not being offered in any jurisdiction where the offer is not permitted.
You should not assume that the information in this Prospectus is accurate as of any date other than the date of this Prospectus.
This section summarizes the terms of the Notes that are described in greater detail below under "Description of Notes." You should read this more detailed description together with the information contained in other parts of this prospectus, as well as the applicable pricing supplements relating to the Notes.
Ford Motor Credit Company LLC
One American Road
Dearborn, Michigan 48126
Ford Interest Advantage Floating Rate Demand Notes
Up to $10,000,000,000 aggregate principal amount
The Notes are unsecured and unsubordinated obligations of Ford Credit and will rank equally and ratably with all other unsecured senior indebtedness of Ford Credit. Ford Credit had outstanding $109.5 billion in senior, unsecured debt obligations on a consolidated basis as of June 30, 2015.
The Notes have no stated maturity. The Notes are demand investments redeemable in whole or in part at any time at the option of the holder. Ford Credit reserves the right to redeem the Notes of any holder at any time at its option. Ford Credit will consider redeeming the Notes of any holder who is determined by Ford Credit in its sole discretion to have abused the redemption provisions or other provisions of the Notes.
The Notes earn interest at a floating rate per annum equal to
the sum of the most recent seven-day average yield
(non-compounded) for all taxable money funds as reported weekly
in Money Fund Report® and at
least 1/4 of one percentage point. In addition, Ford Credit may from time to time, at its sole discretion, increase the rate of interest payable on the Notes by adding to this base rate an incremental per annum rate. Different incremental rates may be payable to investors based on such factors as Ford Credit may determine, including, but not limited to, the aggregate principal amount of their investment in the Notes. The interest rate is subject to
The interest rate applicable to the Notes and all subsequent changes to such interest rate will be disclosed in pricing Supplements filed with the SEC. Interest on the Notes will accrue and be compounded daily. Accrued interest will be automatically reinvested on the last day of each calendar month.
The Notes are not issued by, and do not constitute an investment in, a money market mutual fund, which is a diversified fund consisting of investments in short-term debt securities of many different issuers.
Ford Credit may assess certain fees from time to time as determined by Ford Credit in its sole discretion, including, without limitation, for checks returned for insufficient funds, for redemption checks written for less than $250.00, for failure to maintain the minimum net aggregate principal amount of Notes (presently set at $1,000), for wire redemptions, for stop payment requests and other unusual requests. Information on all fees charged with respect to the Notes is available on Ford Credit's website at www.fordcredit.com/fia. Any applicable fees will be directly deducted from the aggregate principal amount of your Notes.
Form of Notes
The Notes are issued as one or more global securities held by the depositary, which is currently The Bank of New York Mellon. Book-entry records for each investor are maintained by the Agent Bank. See "Description of Notes - General." The Notes are offered by prospectus and only to persons who have a registered address in the United States. Notes will only be issued to investors who provide either a U.S. social security number or a U.S. tax identification number.
Interest earned on the Notes is reportable as taxable income for U.S. federal tax purposes and is subject to taxation regardless of whether such interest is reinvested. Back-up witholding and information reporting may apply to certain persons.
The Northern Trust Company
The Bank of New York Mellon
Your investment in the Notes involves certain risks. Before investing in the Notes, in consultation with your own financial and legal advisers, you should carefully consider, among other matters, the following discussion of risks specific to an investment in the Notes, the risks described under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014 and in our First Quarter 2015 10-Q Report and Second
Quarter 2015 10-Q Report (as defined herein) (which descriptions are incorporated by reference herein), as well as the other information contained or incorporated by reference in this prospectus or any prospectus supplement hereto, including fillings made with the SEC after the date of this prospectus. The Notes are not an appropriate investment for you if you do not understand the terms of the Notes or financial matters generally. In addition, certain factors that may adversely affect the business of Ford Credit
and Ford Motor Company, referred to hereafter as Ford, are discussed in Ford Credit's periodic reports referred to in "Where You Can Find More Information," below. You should not purchase Notes unless you understand and know you can bear all of the investment risks involving the Notes.
Credit Rating Impact on Ford Credit's Borrowing Costs. Ford Credit has not requested, and does not anticipate receiving, a rating specific to the Notes from any credit rating agency. Ford Credit's short- and long-term debt generally is rated by the following four credit rating agencies, designated as nationally recognized statistical rating organizations by the SEC, and their ratings of our debt as of the date of this prospectus are set forth below. Because credit rating agencies can change their ratings at any time, you are encouraged to consult our periodic reports filed with the SEC for any updates to our credit ratings.
|Moody's Investors Service, Inc.
|Standard & Poor's Rating Services,
|a division of McGraw-Hill Companies, Inc.
A credit rating reflects an assessment by the rating agency of the credit risk associated with Ford Credit or particular securities we issue, based on information provided by Ford Credit, Ford and other sources. Credit ratings are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency.
Each rating agency may have different criteria for evaluating company risk, and, therefore, ratings should be evaluated independently for each rating agency. Ford Credit's credit ratings are closely associated with the rating agencies' opinions of Ford. The credit ratings on Ford Credit may not reflect all risks related to the Notes.
Lower credit ratings generally result in higher borrowing costs and reduced access to capital markets and in the past we have been impacted by this. In the event Ford Credit's long and short-term debt ratings are downgraded, Ford Credit's cost of borrowing may be adversely affected, and it may have more limited access to the capital markets.
This may require Ford Credit to reduce the amount of receivables and operating leases it purchases or originates, which would adversely affect its profitability and could adversely affect its ability to support the sale of Ford vehicles.
The Interest Rate Paid on the Notes May Not Bear Any Relation to the Investment Risk. The interest rate on the Notes, which is the base rate described below under "Description of Notes - Interest Rate Information" plus any incremental rate we may choose to pay in our sole discretion, does not necessarily bear any relation to the risks associated with or change in the creditworthiness, credit rating or financial condition of either Ford or Ford Credit.
The Notes Are Not a Diversified Investment. The Notes are not an investment in a money market mutual fund holding diversified investments in the securities of many companies. Only the assets of Ford Credit that have not been sold or securitized are available to pay the principal of and interest on the Notes. Because the Notes are unsecured debt securities issued by a single issuer, you will not have the benefits of diversification offered by money market mutual funds or other investment companies. For this reason, investors also will not have the protections provided to mutual fund investors under the Investment Company Act of 1940.
Ford Credit Is Not a Bank, and Investments In the Notes Are Not Insured by the Federal Deposit Insurance Corporation or Any Other Source. Only Ford Credit is obligated to pay the principal of and interest on the Notes, and only its assets are available for this purpose. If Ford Credit's assets are insufficient to pay the principal of and interest on the Notes, you could lose some or all of your investment. No private or government source guarantees return of your investment in the event of a failure of Ford Credit to repay your investment. The Notes are not obligations of or guaranteed by Ford Motor Company, the Agent Bank or any other entity. No banking relationship exists between investors and the Agent Bank.
The Notes Are Not Transferable. You may redeem your investment in the Notes at any time in whole or in part as described in this prospectus. However, you cannot transfer your investment in the Notes to someone else. As a result, no secondary market for the Notes currently exists or will ever exist, and, consequently, there is no public market valuation of the Notes to assist investors in evaluating the Notes or their yield.
WHERE YOU CAN FIND MORE INFORMATION
The Notes are unsecured debt securities of Ford Credit, and only assets of Ford Credit that have not been sold or securitized are available for payments of principal and interest on the Notes. You can learn more about Ford Credit's business, financial results and credit ratings by reading the annual, quarterly and current reports and other information Ford Credit files with the SEC. You may read and copy any document Ford Credit files at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC filings of Ford Credit also are available to you at the SEC's web site at http://www.sec.gov.
The SEC allows Ford Credit to incorporate by reference the information it files with the SEC, which means that Ford Credit can disclose important information to you by referring you to those documents, which are considered part of this prospectus. Information that Ford Credit files later with the SEC will automatically update and supersede the previously filed information. Ford Credit incorporates by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the offering of all the Notes has been completed.
- Annual Report of Ford Credit on Form 10-K for the year ended December 31, 2014, which is referred to hereafter as the 2014 10-K Report.
- Quarterly Reports of Ford Credit on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015, which are referred to hereafter as the First Quarter 2015 10-Q Report and Second Quarter 2015 10-Q Report, respectively.
- Current Reports of Ford Credit on Form 8-K filed in 2015 on January 5, 2015, January 9, 2015, January 29, 2015, February 3, 2015, March 3, 2015, March 27, 2015, April 1, 2015, April 28, 2015, April 30, 2015, June 2, 2015, June 16, 2015, July 1, 2015, July 28, 2015, August 3, 2015, August 4, 2015, September 1, 2015, and October 1, 2015.
These reports include information about Ford as well as information about Ford Credit.
You may request copies of these filings at no cost, by writing or telephoning Ford Credit's principal executive offices at the following address:
Ford Motor Credit Company LLC
One American Road
Dearborn, MI 48126
Attn: Corporate Secretary
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959, was converted to a Delaware limited liability company on May 1, 2007 and is an indirect, wholly owned subsidiary of Ford. As used herein "Ford Credit" refers to Ford Motor Credit Company LLC and its subsidiaries unless the context otherwise requires.
Products and Services. Ford Credit offers a wide variety of automotive financing products to and through automotive dealers throughout the world.The predominant share of our business consists of financing Ford and Lincoln vehicles and supporting the dealers of those brands. We earn our revenue primarily from:
- Payments made under retail installment sale and lease contracts that we originate and purchase;
- Interest rate supplements and other support payments from Ford and affiliated companies; and
- Payments made under dealer financing programs.
As a result of our financing activities, we have a large portfolio of finance receivables and operating leases which we classify into two segments: "consumer" and "non-consumer".
Finance receivables and operating leases in the consumer segment include products offered to individuals and businesses that finance the acquisition of Ford and Lincoln vehicles from dealers for personal and commercial use. Retail financing includes retail installment sale contracts for new and used vehicles and direct financing leases for new vehicles to retail customers, government entities, daily rental companies, and fleet customers.
Finance receivables in the non-consumer segment include products offered to automotive dealers, and receivables purchased from Ford and its affiliates. Ford Credit makes wholesale loans to dealers to finance the purchase of vehicle inventory (floorplan financing), as well as loans to dealers to finance working capital and improvements to dealership facilities, finance the purchase of dealership real estate, and finance other dealer vehicle programs. We also purchase receivables from Ford and its affiliates, primarily related to the sale of parts and accessories to dealers, receivables from Ford-related loans, and certain used vehicles from daily rental fleet companies.
We also service the finance receivables and leases we originate and purchase, make loans to Ford affiliates, and provide insurance services related to our financing programs.
Geographic Scope of Operations and Segment Information. We conduct our financing operations directly and indirectly through our subsidiaries and affiliates. We offer substantially similar products and services throughout many different regions, subject to local legal restrictions and market conditions. We divide our business segments based on geographic regions: a North America segment and an International segment. The North America segment includes our operations in the United States and Canada. The International segment includes our operations in all other countries in which we do business directly and indirectly.
North America Segment
Our United States operations accounted for 71% of our total managed
receivables at year-end 2014 and 2013, and our Canadian operations
accounted for 10% at year-end 2014 and 2013. Managed receivables equals
total net finance receivables and net investment in operating leases,
excluding unearned interest supplements and residual support, allowance
for credit losses, and other (primarily accumulated supplemental
In the United States and Canada, under the Ford Credit and Lincoln
Automotive Financial Services brand names, we provide financing services
to and through dealers of Ford and Lincoln vehicles.
Our International segment includes operations in three main regions:
Europe, Asia Pacific, and Latin America. Our Europe region is our largest international operation, accounting for approximately 15% and 16% of our
total managed receivables at year-end 2014 and 2013, respectively. Within
the International segment our Europe region accounted for 78% and 81% of
our managed receivables at year-end 2014 and 2013, respectively. Our
European operations are managed through a United Kingdom-based
subsidiary, FCE Bank plc, referred to hereafter as FCE. FCE operates in the
United Kingdom and has branches in 10 other European countries. FCE also
has operating subsidiaries in Switzerland, Poland, the Czech Republic, and
Hungary that provide a variety of retail, dealer, and operating lease financing.
The United Kingdom and Germany are our largest markets in Europe,
representing approximately 67% of FCE's finance receivables and operating
leases. Approximately 18% of FCE's finance and lease receivables are from
customers and dealers in Italy, France and Spain. FCE, through its
Worldwide Trade Financing division, provides financing to distributors/
importers in countries where typically there is no established local Ford
presence. The Worldwide Trade Financing division currently provides
financing in about 60 countries. In the Asia Pacific region, we operate in
China, and we plan to commence operations in India in 2015. In the Latin
America region, we operate in Mexico, Brazil, and Argentina. Our operations
include joint ventures with local financial institutions and other third parties in
various locations around the world. In addition, other private label operations
and alternative business arrangements exist in some markets.
The mailing address of Ford Credit's executive offices is One American
Road, Dearborn, Michigan 48126, United States of America. The telephone
number of such offices is (313) 322-3000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the years 2010-2014 for Ford
Credit are included as an exhibit to Ford Credit's 2014 10-K Report, which is
incorporated in this prospectus by reference. The ratio of earnings to fixed
charges for the years 2010-2014 for Ford are included as an exhibit to Ford's
Annual Report on Form 10-K for the year ended December 31, 2014 which is
incorporated in this prospectus by reference.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be added to the general
funds of Ford Credit and will be available for the purchase of receivables, for
loans and for use in connection with the retirement of debt. Such proceeds
initially may be used to reduce short-term borrowings (commercial paper or
borrowings under bank lines of credit) or may be invested temporarily in
Ford Credit expects to issue additional long-term and short-term debt
from time to time. The nature and amount of Ford Credit's long-term and
short-term debt and the proportionate amount of each can be expected to
vary from time to time, as a result of business requirements, market
conditions and other factors.
DESCRIPTION OF NOTES
Investments in the Notes are subject to the Ford Interest Advantage
Terms and Conditions, referred to hereafter as the Terms and Conditions.
The principal provisions of the Terms and Conditions are summarized in the
next few pages. This summary is subject to the detailed provisions of the
Terms and Conditions, which are controlling. A copy of the Terms and
Conditions has been filed with the SEC and is an exhibit to the registration
statement of which this prospectus is a part. A copy of the Terms and
Conditions is available to any investor upon written request.
A record of the amount invested in the Notes is maintained for each
investor. The net aggregate principal amount of your Notes (which at any
time equals all amounts you invested in the Notes, together with accrued
interest thereon, less your redemptions and fees, if any) is recorded on a
register maintained by The Northern Trust Company, acting as the Agent
An investment in the Notes does not constitute an investment in a
deposit or other bank account and is not protected by the Federal
Deposit Insurance Corporation or any other insurance. The Notes are
not guaranteed by Ford Motor Company or any third party. The Notes are
not an investment in a money market mutual fund holding diversified
investments in securities of many companies. Because the Notes are
unsecured debt securities issued by a single issuer (Ford Credit),
investors will not have the advantage of diversification offered by money
market mutual funds and will not have the protection provided by the
Investment Company Act of 1940.
The Notes will have no stated maturity. Investments in the Notes are
non-transferable. Ford Credit reserves the right to withdraw, cancel or modify
the offer of the Notes at any time. Ford Credit may reject any offer to
purchase Notes in whole or in part for any reason. In addition, Ford Credit
reserves the right to redeem the Notes of any holder at any time at its option.
Ford Credit will consider redeeming the Notes of any holder who is
determined by Ford Credit in its sole discretion to have abused the
redemption provisions or any other provision of the Notes.
The Notes are unsecured obligations of Ford Credit, will be issued in
registered form only, without coupons, and will be identical except for the
issue date. Ford Credit does not maintain reserves for its obligations under
the Notes and the Notes are not subject to any sinking fund. The Notes are
redeemable at the option of the holder thereof as described below. The
Notes rank equally and ratably with all other unsecured senior indebtedness
of Ford Motor Credit Company LLC (parent company only). At June 30, 2015,
Ford Credit had outstanding debt of $109.5 billion on a consolidated basis.
The Notes will be issued in the form of one or more global certificates that
will be deposited with a depositary, referred to hereafter as the Depositary,
which at present is The Bank of New York Mellon. Beneficial interests in
global certificates will be shown on records maintained by the Depositary or
the Agent Bank. While the Notes are represented by one or more global
- You will not be able to have the Notes registered in your name.
- You will not be able to receive a physical certificate for the Notes.
- Our obligations under the Notes, as well as the obligations of the Trustee, will run only to owners of beneficial interests in the Notes as recorded in records maintained by the Depositary or the Agent Bank.
You can obtain current Note investment information by calling toll-free 800-462-2614 or by visiting our website at http://www.fordcredit.com/fia. You also may write to Ford Interest Advantage, The Northern Trust Company, P.O. Box 75936, Chicago, Illinois 60675-5936 to obtain Note investment information. Further information about the Notes and assistance in investing is available on the web site or by calling the number or writing to the address given above.
Information on all fees charged in connection with administration of Note investments is available on our web site or from the Agent Bank.
Plan provisions summarized here may be modified for limited numbers of investors who voluntarily participate in tests of new program features evaluated by Ford Credit from time to time.
Interest Rate Information
Current interest rate information is available on our website
(www.fordcredit.com/fia) or by calling toll-free 800-462-2614. In addition, we
file pricing supplements with the SEC that disclose the then-current interest
rates on the Notes.
Base Rate. The Notes earn interest at a floating rate per annum equal to the sum of the most recent seven-day average yield (non-compounded) for all taxable money funds as reported weekly in Money Fund Report®* and at least 1/4 of one percentage point, referred to herein as the base rate. The base rate is determined and becomes effective on the next following Monday each time a new seven-day average yield (non-compounded) for all taxable money funds reported in Money Fund Report® is available. Such new seven-day average yield (non-compounded) plus 1/4 of one percentage point becomes the base rate for the following seven-day period. If in any week Money Fund Report®is not available, the base rate for the following calendar week will be the same as that for the previous calendar week. If Money Fund Report® ceases to be published, an approximately equivalent effective base rate for investments in the Notes will be determined on the basis of a formula established by Ford Credit.
Money Fund Report® is published weekly and includes yield statistics for nearly all taxable money funds in operation. The reported yields are obtained from the money funds themselves and are stated on a consistent simple interest basis to represent the annualized total yield to the investor, after deducting any management fees and expenses of each of the money funds. While Money Fund Report® states that the yield information obtained from money funds is screened by the publisher, no guarantee of the accuracy of the information contained in Money Fund Report® is made by Ford Credit.
Incremental Rate. Ford Credit may from time to time, at its sole discretion, increase the rate of interest payable on the Notes beyond the base rate by adding to the base rate an incremental per annum rate. The amount of the incremental per annum rate added to the base rate, if any, shall be determined by Ford Credit in its sole discretion. Different incremental rates may be payable to investors based on such factors as Ford Credit may determine, including, but not limited to, the net aggregate principal amount of their Notes. Payment of incremental rates may be discontinued at any time.
Interest Generally. Interest on Notes either at the base rate or an
incremental rate, as the case may be, accrues daily and is credited to each
investor and automatically reinvested as of the last day of each calendar
month. The weekly interest rate paid on investments in the Notes may not
provide a basis for comparison with other investments which use a different
method of calculating a variable yield or which pay a fixed yield for a stated
period of time. In addition, money market mutual funds subject to the
Investment Company Act of 1940 generally are required to maintain a
diversified portfolio of short-term investments, substantially all of which must
be assigned the highest short-term rating from at least two nationally
recognized statistical rating organizations.
Interest credited for any given past period on investments in the Notes is
not an indication or representation of future results. Because the weekly
interest rate applicable to investments in the Notes may fluctuate, such
information may not provide a basis for comparison with bank deposits,
other investments which pay a fixed yield for a stated period of time, or
investment companies, including money market mutual funds, which may
use a different method of calculating yield. Information on the current interest
rate applicable to investments in the Notes is available on our web site, or by
calling toll-free 800-462-2614. In addition, we file pricing supplements with
the SEC disclosing the current interest rates applicable to the Notes.
Ford Credit may from time to time offer marketing incentives to certain
investors, including but not limited to investors making an initial investment
in the Notes, existing investors who refer new investors, and/or investors who
enroll in an automatic investment option or certain payroll deduction
programs. These incentives, if offered, may include offers to issue additional
principal amount of Notes. Whether Ford Credit offers any marketing
incentives in the future and, if so, what form of incentive will be offered and to
whom will be decided by Ford Credit in its sole discretion and will be
disclosed on our website. Any such marketing incentive may be modified or
terminated at any time by Ford Credit in its sole discretion.
How to Open a Note
To open a Ford Interest Advantage Note, after reading this entire
prospectus, you must complete and execute an enrollment form. To obtain
an enrollment form you may either print a copy of the enrollment form from
the website or call the customer service line and request an enrollment
package to be mailed to you. The properly completed and executed
enrollment form must be delivered to the Agent Bank. The completed
enrollment form must be accompanied by an initial investment of at least
If your enrollment form is delivered in paper form through the mail, your
initial investment must accompany the enrollment form and must be made
by check. Cashier's checks, third party checks, starter checks, and money
orders may not be used to establish your initial investment. The amount of
the initial investment must be at least $1,000. Checks should be made
payable to "Ford Interest Advantage." The completed and executed
enrollment form and check should be mailed to The Northern Trust
Company, P.O. Box 75936, Chicago, Illinois 60675-5936. The alternative
methods of investment described below may be used for subsequent
investments once your initial Note investment is made. Initial investment by check shall be invested in Notes, and will begin accruing interest, as
described below under "— Investments by Check."
Alternatively, Ford Credit may allow the enrollment form to be completed
and submitted online through the Ford Interest Advantage website at
www.fordcredit.com/fia. Please refer to the Ford Interest Advantage website
to determine if Ford Credit is currently permitting the enrollment form to be
completed online and submitted electronically and for instructions,
requirements, and guidelines with respect thereto. If Ford Credit permits
electronic delivery of the enrollment form, the initial investment must be
made at the time the enrollment form is delivered through the website by wire
transfer or direct transfer from your existing bank account as discussed
below under "How to Invest".
All investments must be made in U.S. dollars. Investments in the Notes
may be made individually, jointly, or as custodial or trust investments and
may be opened by individuals, corporations, partnerships, limited liability
companies, firms or associations. Any Note jointly owned by two or more
investors will be deemed to be owned by such investors as joint tenants with
right of survivorship unless otherwise indicated or instructed in writing.
Employees of Ford Credit, Ford and certain other subsidiaries may invest
in the Notes through payroll deduction subject to limitations established from
time to time by Ford Credit.
How to Invest
General. You may purchase Notes at any time, without charge to you,
by check, by wire transfer, by automatic charge to your bank account, by
transfer from other Ford Interest Advantage Notes owned by you, or by such
other means as Ford Credit from time to time determines. The minimum
amount which you may invest after your initial investment is $50. A minimum
net aggregate principal amount of Notes (presently set at $1,000) must be
maintained at all times. If your net aggregate principal amount of Notes falls
below the minimum required, Ford Credit may redeem your Notes or deduct
a monthly maintenance fee from the net aggregate principal amount of your
Notes. Redemptions of Notes for this purpose will be effected by mailing a
check for the principal amount of the Notes, plus accrued and unpaid
interest, to the investor address of record. The investor will be notified in
advance if Notes are to be redeemed for this reason.
Investments by Check. Once your initial Note investment is made, you
may invest additional funds by sending a check. Investment checks may be
mailed to us or remotely captured on a mobile electronic device using the
Ford Interest Advantage Mobile App. If the investment check is mailed to us,
it should be sent to Ford Interest Advantage, The Northern Trust Company,
P.O. Box 75935, Chicago, Illinois 60675-5935. Checks mailed to any address other than the address set forth in the proceeding sentence may result in a
delay in the processing of your investment. An investment check sent to Ford
Interest Advantage by remote capture on a mobile electronic device can be
transmitted to us through the Ford Interest Advantage Mobile App. Ford
Credit reserves the right to suspend or terminate the Ford Interest Advantage
Mobile App in its sole discretion at any time. Use of the Mobile App is subject
to the Ford Interest Advantage Mobile App Terms and Conditions found on
our website. Your personal check (whether mailed or remotely captured on a
mobile electronic device and sent via the mobile app), should be made
payable to "Ford Interest Advantage." Third party checks made payable to
you must be endorsed and both sides of such third party check must be
captured on the mobile electronic device and sent to The Northern Trust
Company via the Mobile App. The endorsement should include the words "For Investment Only." For subsequent investments, you should indicate
your investment identification number (i.e., Note number) on the check and
enclose an investment form which is provided as a detachable stub on
statements (whether paper or eStatements) and investment confirmations
mailed by the Agent Bank. Check investments sent by regular mail and
received by the Agent Bank prior to 9:00 a.m. Eastern Time will be invested in
Notes, and will begin accruing interest, on the first business day following the
business day on which the check investment is received by the Agent Bank
in proper form. Check investments sent by remote capture on a mobile
electronic device and received by the Agent Bank prior to 9:00 a.m. Eastern
Time will be invested in Notes, and will begin accruing interest, on the
business day on which it is received by the Agent Bank in proper form. Check
investments received by the Agent Bank (whether by mail or remote capture)
after that time on a business day, or on a non-business day, will be invested
in Notes, and will begin accruing interest, on the day following the first
business day after that check investment is received. Checks are accepted
subject to collection at full face value in U.S. funds and must be drawn in U.S.
dollars on a bank in the U.S. Investments made by check may be redeemed
after 10 business days or any shorter time as determined from time to time by
Investments by Electronic Transfer. Once your initial Note investment is
made by check, or if Ford Credit is permitting electronic delivery of
enrollment forms at the time of your initial investment, you may invest
additional funds by wire transfer or automated clearing house transfer of
funds to Ford Interest Advantage, The Northern Trust Company. The Routing
Code of The Northern Trust Company for such transfers is 0710-00152. For
all investments through these electronic transfers, the transfer instructions
must include the name "Ford Interest Advantage" and your name, address,
and identification number (i.e., Note number). Subsequent investments by
electronic transfer after the initial investment received by the Agent Bank
prior to 2:00 p.m. Eastern Time will be invested in Notes, and will begin accruing interest, on the business day received. Investments by electronic
transfer received after that time on a business day, or on a non-business day,
will be invested in Notes, and will begin accruing interest, on the first
business day after that transfer is received. Transferring funds electronically
by means other than wire transfer or automated clearing house transfer to
the Agent Bank may result in a delay in crediting the investment to your Note
investment. Neither Ford Credit nor the Agent Bank will be responsible for
delays in funds transfer systems. Amounts invested by electronic transfer
typically will be available for redemption on the day of receipt in good order
in the case of wire transfers, and five business days after receipt in the case
of automated clearing house transfers, or such shorter time as Ford Credit
may determine from time to time.
Investments by Automatic Monthly or Periodic Charge to Bank
Accounts. Once your initial Note investment is made, you may invest additional funds
by authorizing the Agent Bank to make automatic monthly or periodic
charges of $50 or more to your bank account. Upon receipt of your
authorization, the Agent Bank will prepare an electronic funds transfer drawn
against your bank account for the prescribed amount and will invest the
proceeds in the Notes. The proceeds will accrue interest on the same
conditions as set forth under "— Investments by Check." You may change
the amount of the automatic or periodic investment (subject to the
$50 monthly minimum) or terminate investments at any time by providing
notice to the Agent Bank. From time to time, Ford Credit may, in its sole
discretion, authorize the Agent Bank to accept deposits of less than the $50
minimum amount. The requested change or termination will be effective as
soon as practicable after receipt of notice by the Agent Bank. Investments
made by Automatic Monthly or Periodic Charge to bank accounts may be
redeemed after five business days or such shorter time as determined from
time to time by Ford Credit.
Investment by Transfer between FIA Notes. If you own more than one
Note, you may transfer funds from one Note to another Note owned by you.
Such a transfer will be accomplished by redeeming a portion of the Note
from which the transfer will originate and investing the proceeds of such
redemption in the Note to which the transfer is directed. Transfers between
Notes may only be made between Notes owned by the same investor,
including to or from an individual, joint, custodial or trust investment Note of
which such investor is an owner, custodian or trustee, as applicable. You may
submit a form available on our website to establish a recurring transfer or a
one-time transfer between your Notes or you may use our on-line service at
any time to establish such a transfer.
Forms to establish the Automatic Monthly or Periodic Charge to bank accounts are available from the Agent Bank. or on-line via the FIA website.
Investment Information. The Agent Bank maintains a record of your
investments in the Notes. The net outstanding aggregate principal amount of
your Notes is equal to all amounts invested in the Notes, including Notes
purchased with reinvested interest, less redemptions and fees, if any. Shortly
after the end of each reporting period, the Agent Bank will send you, or make
available to you, a Note investment statement (via mail or electronically)
setting forth a summary of all transactions relating to your investment in the
Notes during the period, including beginning and ending aggregate
principal amounts and interest paid and reinvested for the period.
Statements are presently offered quarterly or, by special request to the Agent
Bank, monthly. This information is also available through our website. You
are responsible for examining each statement mailed or otherwise made
available to you promptly to determine the accuracy of all redemptions and
investments made to your Notes. Failure to promptly report to the Agent
Bank an unauthorized payment may impact your ability to recover such
unauthorized payment. In addition, you must promptly provide the Agent
Bank with notice of any change in your address. If your registered investment
address is not kept up to date and mail is returned to us by the United States
Post Office and we cannot locate you, we may be required after a specified
time period to remit your investment as abandoned property as required by
applicable state unclaimed property law.
The full amount of your taxable interest income reportable for Federal
income tax purposes for the year also will be provided annually.
How to Redeem Investments
General. You may redeem all or any part of your investment at any time.
Investments may be redeemed by writing a redemption check, by writing or
telephoning a request for redemption by bank check and by electronic
transfer. We may also offer other methods of redemption from time to time, at
our option, including on-line bill pay features. Any on-line redemption
methods that Ford Credit may offer from time to time will be subject in all
respects to the Ford Credit On-line Terms and Conditions, which can be
found on our website. Any redemption method other than by redemption
check or by a written request for redemption by bank check or electronic
transfer that we may offer from time to time may be suspended or eliminated
at any time in Ford Credit's sole discretion. If the amount to be redeemed
represents an investment made by check, the redemption request will not be
honored if made within 10 business days from the receipt of the related
investment check. If you need more immediate access to your funds, you
may avoid this delay by investing through one of the other available means of
investment. Investors redeeming their Notes will receive all accrued and
unpaid interest. In addition, Ford Credit reserves the right to redeem the Notes of any holder at any time at its option. Ford Credit will consider
exercising this right and redeeming the Notes of any holder who is
determined by Ford Credit in its sole discretion to have abused the
redemption provisions or other provisions of the Notes.
Redemption by Bank Check. You may redeem all or a portion of the net aggregate principal amount of your Notes at any time by writing or telephoning the Agent Bank requesting redemption. Redemptions will be made by bank check ($250 minimum), mailed to your registered address.
Written requests for redemption by bank check should be sent to Ford
Interest Advantage, c/o The Northern Trust Company, P.O. Box 75936,
Chicago, Illinois 60675-5936. All written requests for redemption require a
signature of a Noteholder, signed exactly as the Noteholder's name appears
on the investment enrollment form submitted to the Agent Bank or on the
signature card submitted to the Agent Bank if the enrollment form was
delivered electronically through the website. Failure to submit such signature
card will result in no redemption checks being issued with respect to such
Note. If the request in proper form for redemption by bank check is received
by the Agent Bank in its Ford Interest Advantage Servicing Area prior to
11:00 a.m. Eastern Time on a business day, the bank check normally will be
mailed on that business day. Bank checks normally will be mailed on the next
business day if the redemption request, in proper form, is received by the
Agent Bank after 11:00 a.m. Eastern Time on a business day. Interest will
accrue to but not including the business day the bank check is prepared.
Written and telephone redemption requests should not be made to Ford or Ford Credit.
Check Redemption. You will be provided with a supply of redemption
checks free of charge following receipt by the Agent Bank of a properly
completed investment enrollment form. If the enrollment form is delivered
electronically, you must complete and sign a signature card and return it to
the Agent Bank before redemption checks will be provided. You may order
additional redemption checks by using the check reorder form in your
current checkbook, by telephoning The Northern Trust Company toll-free at
800-462-2614, or through our web site. Redemption checks will be sent only
to the registered investment owners and only to the registered investment
address. Allowing redemption by check does not create a checking or other
bank account or a depositor or banking relationship with the Agent Bank or
You may make redemption checks payable to the order of anyone in any
amount not less than the minimum redemption amount (currently $250).
Checks presented for less than the minimum redemption amount will not be honored. No fee will be charged by Ford Credit to process checks payable in
amounts equal to or greater than the minimum redemption amount. Ford
Credit may modify the minimum redemption amount from time to time. Ford
Credit also may, at its sole discretion, elect to honor checks for less than the
minimum redemption amount and may charge a processing fee for such
checks which will be deducted from the net aggregate principal amount of
your Notes. The amount of the Notes to be redeemed by check will continue
accruing interest until the redemption check is presented for payment.
If the amount of a redemption check is greater than the net aggregate principal amount of your Notes, the check will not be honored and will be returned marked "insufficient funds" and you will be charged a fee in an amount determined by Ford Credit. You also will be charged a fee to place a stop order on a redemption check. Copies of redemption checks on which payment has been made will be provided to you by the Agent Bank upon your request, but a fee may be charged for this service. Ford Credit reserves the right at any time to modify, terminate or suspend the procedures permitting check redemptions.
Redemption by Electronic Transfer. By selecting the Redemption by
Electronic Transfer Option on the investment enrollment form or in a
subsequent written request, you may arrange to have redemption proceeds
transferred by wire transfer or automated clearing house transfer to an
account at a bank or other financial institution. The minimum amounts for
such transfers are $500 for wire transfers and $50 for automated clearing
house transfers. By use of this redemption option, you authorize the Agent
Bank to act on telephone or written redemption instructions or instructions
transmitted through the Ford Interest Advantage Website, without signature
guarantees, from any person or persons representing themselves to be the
registered owners of your Notes. The Agent Bank's records of such
instructions are binding. Wire transfers may only be initiated by written
request to the Agent Bank or by calling 1-800-462-2614. In order to be
eligible for redemption by electronic transfer, you must designate an account
number at a bank or other financial institution to receive electronic transfers
of redemption proceeds. The day and time at which a Redemption by
Electronic Transfer is received by the receiving financial institution will vary
based on the type of transfer selected and the time of day that complete
transfer instructions are received by the Agent Bank. Interest will accrue to
but not including the business day on which the redemption proceeds are
transferred. A fee may be charged for redemptions by electronic transfer.
If you have not selected the Redemption by Electronic Transfer Option on
the investment application or in a subsequent request, you may request
redemption by wire transfer subject to the conditions described in the preceding and following paragraphs and such other conditions as Ford
Credit may determine in its sole discretion.
Electronic transfer redemption instructions must designate Ford Interest
Advantage, your name, the Note investment number, the name(s) of the
registered owner(s) submitting the electronic redemption request and the
routing code of the bank. Electronic transfer redemption instructions may be
effected by telephoning the Agent Bank toll-free at 800-462-2614, through
our web site or by such other means as Ford Credit may determine in its sole
discretion. The bank and account number may be changed only upon
written request to the Agent Bank with the signature of each registered
investment owner (including joint owners) of the Notes. Alternatively, Ford
Credit may allow such changes to be made on-line through its website or
otherwise as it determines in its sole discretion from time to time. Neither the
Agent Bank nor Ford Credit will be responsible for delays in the electronic
funds transfer system or the authenticity of withdrawal instructions.
Electronic transfer redemption proceeds will be wired to an account at a
bank that is a member of the Federal Reserve System, or to a correspondent
bank of the bank if the bank is not a member of the Federal Reserve System.
If the correspondent bank fails to notify the bank immediately, there may be a
delay in crediting the funds to the bank account. The procedures permitting
redemptions by electronic transfer may be modified, terminated or
suspended at any time by Ford Credit.
Indenture and Trustee
The Notes are issuable under an Indenture dated as of July 1, 1985, as
supplemented, referred to hereafter as the Indenture, between Ford Credit
and The Bank of New York Mellon (The Bank of New York Mellon, in its
capacity as trustee under the Indenture, or any successor trustee is referred
to hereafter as the Trustee). A copy of the Indenture also is filed as an exhibit
to the registration statement filed with the SEC covering the offering of the
Notes, and statements in this prospectus relating to the Notes are subject to
the detailed provisions of the Indenture and the Ford Interest Advantage
Terms and Conditions. Whenever any particular section of the Indenture or
any term used in it is referred to, the statement in connection with which such
reference is made is qualified in its entirety by such reference.
The Bank of New York Mellon, the trustee under the Indenture, is also the
trustee under indentures covering a number of outstanding issues of notes
and debentures of Ford, is a depositary of Ford Credit and Ford, has from
time to time made loans to Ford Credit, Ford and its subsidiaries and has
performed other services for such companies in the normal course of its
Limitation on Liens
If Ford Credit or any Restricted Subsidiary (as defined in the Indenture) shall pledge or otherwise
subject to any lien (as defined in the Indenture as a Mortgage) any of its property or assets, Ford Credit
will secure or cause such Restricted Subsidiary to secure the debt securities equally and ratably with (or
prior to) the indebtedness secured by such Mortgage. This restriction does not apply to Mortgages
securing such indebtedness which shall not exceed $5 million in the aggregate at any one time outstanding
and does not apply to:
- certain Mortgages created or incurred to secure financing of the export or marketing of goods outside the United States;
- Mortgages on accounts receivable payable in foreign currencies securing indebtedness incurred and payable outside the United States;
- Mortgages in favor of Ford Credit or any Restricted Subsidiary;
- Mortgages in favor of governmental bodies to secure progress, advance or other payments, or deposits with any governmental body required in connection with the business of Ford Credit or a Restricted Subsidiary;
- deposits made in connection with pending litigation;
- Mortgages existing at the time of acquisition of the assets secured thereby (including acquisition through merger or consolidation) and certain purchase money Mortgages; and
- any extension, renewal or replacement of any Mortgage or Mortgages referred to in the foregoing clauses, inclusive. (Section 5.05 in the Indenture.)
Merger and Consolidation
The Indenture provides that no consolidation or merger of Ford Credit
with or into any other corporation shall be permitted, and no sale or
conveyance of its property as an entirety, or substantially as an entirety, may
be made to another corporation, if, as a result thereof, any asset of Ford
Credit or a Restricted Subsidiary would become subject to a Mortgage,
unless the debt securities shall be equally and ratably secured with (or prior
to) the indebtedness secured by such Mortgage, or unless such Mortgage
could be created pursuant to Section 5.05 in the Indenture (summarized
under "— Limitation on Liens" above) without equally and ratably securing
the Indenture Securities. (Section 12.03 in the Indenture.)
Events of Default
The following events are defined in the Indenture as Events of Default:
- failure to pay principal or interest when due;
- failure to perform any other covenants for 90 days after notice; and
- the bankruptcy, insolvency or related reorganization of Ford Credit. (Section 7.01 in the Indenture.)
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default, give the Noteholders notice of all uncured defaults
known to it (the term default to include the events specified above without
grace periods); provided that, except in the case of default in the payment of
principal or interest on any of the Notes, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interests of the Noteholders. (Section 7.07 in the
Ford Credit is required to furnish to the Trustee annually a statement of
certain officers of Ford Credit stating whether or not to the best of their
knowledge Ford Credit is in default in the performance and observance of
the terms of the Indenture and, if Ford Credit is in default, specifying such
default. (Section 5.06 in the Indenture.)
The holders of a majority in aggregate principal amount of all
outstanding Notes have the right to waive certain defaults and, subject to
certain limitations, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Section 7.06 in the Indenture.) The
Indenture provides that, in case an Event of Default shall occur (which shall
not have been cured or waived), the Trustee is required to exercise such of its
rights and powers under the Indenture, and to use the degree of care and
skill in their exercise, that a prudent man would exercise or use in the
conduct of his own affairs, but otherwise need only perform such duties as
are specifically set forth in the Indenture. (Section 8.01 in the Indenture)
Subject to such provisions, the Trustee is under no obligation to exercise any
of its rights or powers under the Indenture at the request of any of the
Noteholders unless they shall have offered to the Trustee reasonable security
or indemnity. (Section 8.02 in the Indenture.)
Modification of the Indenture
With certain exceptions, under the Indenture, Ford Credits
rights and obligations and the rights of the Noteholders may be
modified by Ford Credit with the consent of the holders of not
in aggregate principal amount of the Notes then outstanding; but no such modifications may be made which would (i) diminish the principal amount of any Note, or accrued and unpaid interest thereon; or (ii) reduce the above-stated percentage of Notes, the consent of the holders of which is required to modify or alter the Indenture, without the consent of the holders of all Notes then outstanding. (Section 11.02 in the Indenture.)
AGENT BANK AND ADMINISTRATION
Ford Credit employs an Agent Bank, currently The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois 60603, to act as Ford
Credit's agent for the Ford Interest Advantage. Services performed by the
Agent Bank and its affiliates include establishment and maintenance of Note
investment records, including transactions processing and accounting;
preparation of Note investment statements and other correspondence;
investor servicing; advice on the principal balance of Notes; accrual of interest
income and payment of interest earned; and required tax reporting and filings
with proper authorities. For these services, Ford Credit pays the Agent Bank an
agency and administrative fee monthly based on the number of Notes with
positive balances at the end of each month, as well as reasonable
out-of-pocket costs (such as, but not limited to, postage, forms, telephone and
wire expenses). These costs and all other costs incurred in connection with the
offering of the Notes are paid by Ford Credit. Investors may be charged
administrative service fees as described in this Prospectus. Also, investors
may incur charges in obtaining required signature guarantees.
Ford Credit has established a Ford Interest Advantage Committee, which
meets as needed to assist in the administration of the Terms and Conditions,
interpret their provisions, establish rules or procedures relating to the Notes,
or determine procedures to set rates of interest for the Notes. The members
of the committee are employees of Ford Credit or Ford.
The Notes are not qualified under Section 401(a) of the Internal Revenue
Code. Accordingly, all interest credited to the Notes or paid in any taxable
year is reportable by the investor, and other holders, as taxable income for
Federal income tax purposes. No part of the taxable interest is excludable
from taxable income.
The statement sent to the investor or other holders by the Agent Bank (via
mail or electronically) covering the final reporting period of each year will state
the full amount reportable as taxable income. The Agent Bank also will file tax
information returns as required by law. State and local income taxes and
related tax reporting also may be applicable. Investors are individually responsible for complying with applicable Federal, state and local tax laws and
should consult their individual tax advisors regarding any specific questions.
TERMINATION, SUSPENSION OR MODIFICATION
Ford Credit expects that Ford Interest Advantage will continue for some
time, but reserves the right at any time to terminate, to suspend or from time
to time to modify the program in part, or in its entirety, or in respect of
categories of investors, including, but not limited to, investors located in one
or more jurisdictions. Ford Credit may, in its discretion, temporarily suspend
the acceptance of new investments in Notes without such suspension
constituting a suspension or termination of the program. Any modification
that affects the rights or duties of the Trustee may be made only with the
consent of the Trustee. No termination, modification or suspension will affect
your right to redeem your Notes or diminish the net aggregate principal
amount of your Notes as of the effective date thereof.
RIGHTS NOT TRANSFERABLE
No right or interest in or to a Note is assignable or transferable in whole or
in part except for redemptions and no attempted assignment or transfer
otherwise will be effective. Except for redemptions, and except for the right to
correct any investments in Notes made in error, no right or interest of any
investor in a Note shall be liable for, or subject to, any obligation or liability of
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by Ford Credit directly on its
behalf and no commissions will be paid. Ford Credit may from time to time
designate agents in certain jurisdictions through whom Notes may be
offered. Such agents shall receive no commissions but shall be reimbursed
for certain expenses incurred in connection with such efforts. Ford Credit has
the sole right to accept offers to purchase Notes and may reject any
proposed purchase of Notes in whole or in part.
David J. Witten, who is Ford Credit's Assistant Secretary, has given an opinion about the legality of the Notes. Mr. Witten owns shares of Ford common stock.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The financial statements and management's assessment of the
effectiveness of internal control over financial reporting (which is included in
Management's Report on Internal Control over Financial Reporting)
incorporated in this prospectus by reference to the Annual Report on
Form 10-K for the year ended December 31, 2014 have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
With respect to the unaudited financial information of Ford Credit for the
three and six month periods ended June 30, 2015 and 2014 and the three
month periods ended March 31, 2015 and 2014, incorporated by reference
in this prospectus, PricewaterhouseCoopers LLP reported that it has applied
limited procedures in accordance with professional standards for a review of
such information. However, its separate reports dated April 28, 2015 and
July 28, 2015, incorporated by reference in this prospectus, states that
PricewaterhouseCoopers LLP did not audit and do not express an opinion
on that unaudited consolidated financial information. Accordingly, the
degree of reliance on its reports on such information should be restricted in
light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of
Section 11 of the Securities Act of 1933, as amended (the "Act"), for its
reports on the unaudited consolidated financial information because the
reports are not a "report" or a "part" of the registration statement prepared
or certified by PricewaterhouseCoopers LLP within the meaning of
Sections 7 and 11 of the Act.