Company Name: Exxon Capital Holdings Corp.
Public Availability Date: May 13, 1988

INQUIRY LETTER

Sullivan & Cromwell
125 Broad Street
New York 10004
TELEPHONE(212) 558-4000

February 24, 1988

William E. Morley, Esq.,
Chief Counsel,
Division of Corporation
Securities and Exchange Commission,
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Exxon Capital Holdings Corporation

Dear Mr. Morley:

Exxon Capital Holdings Corporation ("Exxon Capital Holdings") proposes to effect private placements of shares of one or more series of broker-remarketed preferred stock, such placements to be followed by an exchange offer registered under the Securities Act of 1933 (the "Securities Act") to the then owners of such preferred stock ("Exchange Offerees") of one or more new series of broker-remarketed preferred stock (such shares of privately placed preferred stock and registered preferred stock are sometimes collectively referred to herein as the "preferred shares"). This letter is to request confirmation that subsequent resales of registered preferred stock by the Exchange Offerees will be viewed by the Securities and Exchange Commission staff no differently from resales by non-affiliated purchasers after completion of any registered primary offering of securities and, therefore, that resales of registered preferred shares by the Exchange Offerees may be affected without any further registration under the Securities Act or the delivery of a prospectus.

The Issuer

Exxon Capital Holdings is a Delaware corporation and a wholly-owned subsidiary of Exxon Corporation ("Exxon"). Exxon Capital Holdings, through its subsidiaries Exxon Coal Resources U.S.A., Inc. and Exxon Pipeline Company, is engaged in transportation of petroleum products and coal mining in the United States. In addition, Exxon Capital Holdings subsidiary Exxon Capital Corporation engages in the borrowing of funds and the lending of such funds to Exxon and its affiliates. For the calendar year ended December 31, 1987, Exxon Capital Holdings consolidated revenues and net profits were in excess of $1.2 billion and $360 million, respectively, and at that date its consolidated assets were in excess of $3.5 billion. Exxon Capital Holdings is not currently a reporting company under the Securities Exchange Act of 1934 (the "Exchange Act"). However consistent with the Commission staff position in City Capital Funding, Inc. (Commission staff no-action letter, avail, November 12, 1984; a copy of this letter is included for your convenient reference), Exxon Capital Holdings would agree to file, upon completion of the exchange offer, periodic and other reports required under Section 13(a) of the Exchange Act notwithstanding the suspension provisions contained in Section 15(d) thereof for securities held of record by fewer than 300 persons.

The Preferred Shares and Remarketing Procedures

The preferred shares are a preferred stock with variable dividend rates and periods. Each share may have the same or a different dividend period and rate from the other preferred shares. The preferred shares sold in the private placements initially will have dividend periods of between one business day and 364 days, and dividend rates determined in light of then applicable market conditions. Thereafter, the broker-dealers which are appointed by Exxon Capital Holdings as remarketing agents in connection with subsequent dividend period and rate resets will establish dividend periods which they determine provide the lowest cost of capital for Exxon Capital Holdings and dividend rates (based on market conditions) which are the lowest at which any shares tendered for remarketing can be remarketed at their liquidation preference. At the end of each dividend for each share, such share will be deemed to have been tendered for sale by remarketing, unless its owner shall have provided notice to the contrary. The remarketing agents may purchase tendered preferred shares as principal, which they may later remarket. As is the case with other broker-remarketed and auction-rate preferred stock programs with which you are familiar, the remarketing agents will be paid a fee by Exxon Capital Holdings as compensation for their services. Such fee will be based on the total amount of preferred shares outstanding at any point in time. The preferred shares will be rated by two national securities rating organizations. Although no presentation has been made to any such organization, Exxon Capital Holdings expects that such shares will receive the highest investment grade rating.

The Private Placements and Exchange Offer

In view of current market conditions and other factors, Exxon Capital Holdings wishes to proceed with an offering of preferred shares as soon as practical. Exxon Capital Holdings proposes to offer preferred shares in units of $500,000 or more initially only on a private placement basis to corporations which are "accredited investors" as defined in Securities Act Regulation D. Pending completion of the exchange offer discussed below, subsequent remarketing in the context of dividend period and rate resets will also be conducted on a private placement basis. However, Exxon Capital Holdings has been advised by the proposed remarketing agents that in the longer term, the public remarketing of the preferred shares, which are then expected to be in units of $100,000 of more, likely will enable it to achieve a lower cost of capital by broadening the market for the shares. Therefore, at an appropriate time in the future it intends to register under the Securities Act an exchange offer consisting of one or more new series of preferred shares ("registered preferred shares") to be offered to the then owners of the privately placed preferred shares. The exact timing of such exchange offer is not known at this time. However, Exxon Capital Holdings intends to effect the exchange offer as soon as practical after the closing of the private placements and, based on current plans, it is contemplated that the exchange offer may be effected as soon as two months after such closing. Although the exact terms of the registered preferred shares will not be finally established until the time of the exchange offer, such terms very likely will be substantially identical to the privately placed preferred shares. Finally, the placement memorandum to be used in connection with the private placements is expected to contain a brief disclosure of the material elements of the contemplated exchange offer (to the extent known at the time of such placements) together with a disclosure to the effect that there is no assurance that the exchange offer in fact will be effected.

Resales by Exchange Offerees

Exxon Capital Holdings wishes confirmation from the Commission staff that subsequent resales of registered preferred shares by the Exchange Offerees will be viewed no differently from resales by non-affiliated purchasers after completion of any registered primary offering of securities and, therefore, that resales of registered preferred shares by the Exchange Offerees may be effected without any further registration under the Securities Act or the delivery of a prospectus.

Pending completion of rating agency review and depending on market condition, Exxon Capital Holdings intends to proceed with the private placements as soon as practical. Therefore, we would appreciate it very much if you would provide the above confirmation as promptly as possible.

If I can be of any further assistance in your consideration of the matters addressed in this letter, please call me at (212) 558-3537.

Very truly yours,

Gregory K. Palm

cc: Richard E. Gutman, Esq.
(Exxon Corporation)

STAFF REPLY LETTER

April 13, 1988

RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE

Re: Exxon Capital Holdings Corporation (the "Company")

Incoming letter dated February 24, 1988

On the basis of the facts presented, and under the assumption that the Exchange Offerees and remarketing agents are not affiliates of the Company, this Division is of the view that the Exchange Offerees may resell the registered broker-remarketed preferred stock without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such securities are acquired in the ordinary course of their business and such purchasers have no arrangement with any person to participate in the distribution of such securities.

Because this position is based on the representations made to the Division is your letter, it should be noted that any different facts or conditions might require a different conclusion.

Sincerely,

Abigail Arms

Special Counsel