RULE 424B(3) REGISTRATION NO. 33-49947 PROSPECTUS SUPPLEMENT - --------------------- (TO PROSPECTUS SUPPLEMENT DATED OCTOBER 4, 1993 AND PROSPECTUS DATED AUGUST 27, 1993) MERRILL LYNCH & CO., INC. MEDIUM-TERM NOTES, SERIES B DUE NINE MONTHS OR MORE FROM DATE OF ISSUE ONE YEAR FRENCH FRANC FORWARD RATE NOTES WITH FFR EXPOSURE ON GAIN/LOSS DUE MARCH 17, 1995 Original Issue Date: March 17, 1994 Principal Amount: U.S.$50 million Maturity Date: March 17, 1995 Interest Rate: 4.45% Redemption Date: Not Applicable Principal Redemption Amount: the greater of (a) U.S. dollar principal amount + [[French Franc Carry Amount + Long Position Unwind Amount] / FFR/USD] and (b) zero Optional Repayment Dates: Not Applicable Interest Payment Dates: September 17, 1994 and March 17, 1995 DESCRIPTION OF THE NOTES GENERAL The Medium-Term Notes, Series B of Merrill Lynch & Co., Inc. (the "Company"), offered hereby are "One Year French Franc Forward Rate Notes with FFR Exposure on Gain/Loss due March 17, 1995" and are referred to in this Prospectus Supplement as the "Notes". The Notes are Fixed Rate Notes and certain provisions of the Notes are more fully described in the accompanying Prospectus and Prospectus Supplement. On February 10, 1994, the Company increased to $3,650,000,000 the aggregate principal amount of Medium-Term Notes, Series B authorized to be issued pursuant to the attached Prospectus Supplement and supplements related thereto. Such amount represents an increased authorization of $650,000,000. The principal of the Notes repayable on the Maturity Date specified above (the "Principal Redemption Amount") will be determined pursuant to the formulae applicable to the Notes described herein, and such amount may be less than, equal to or more than the principal amount of the Notes (but will not be less than zero). The Notes will be issued as Book-Entry Notes in denominations of U.S.$1,000,000 and integral multiples of U.S.$100,000 in excess thereof. The Notes will not be subject to redemption by the Company in whole or in part prior to the Maturity Date. IN CERTAIN CIRCUMSTANCES, THE PRINCIPAL REDEMPTION AMOUNT OF A NOTE PAYABLE ON THE MATURITY DATE MAY BE LESS THAN THE PRINCIPAL AMOUNT OF SUCH NOTE, BUT MAY NOT BE LESS THAN ZERO. This Prospectus Supplement relates to $50,000,000 aggregate principal amount of Notes which the Company has agreed to sell to Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), and which the Underwriter has agreed to purchase from the Company, at a price of 99.875% of the principal amount thereof. The Underwriter has advised the Company that it proposes initially to offer the Notes to the public at a public offering price equal to 100% of the principal amount thereof. After the initial public offering, such public offering price may be changed. The date of this Prospectus Supplement is March 16, 1994. INTEREST Each Note will bear interest, payable in U.S. dollars, on the Principal Amount of such Note from and including March 17, 1994 to but excluding the Maturity Date. Interest on the Notes will be payable in U.S. dollars on the Interest Payment Dates specified above at a per annum rate equal to 4.45%. Interest will be payable semi-annually in arrears on September 17, 1994 and on March 17, 1995. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Interest payable on the Maturity Date will be payable to the person to whom the Principal Redemption Amount, if any, is payable. PRINCIPAL REDEMPTION AMOUNT The Principal Redemption Amount of a Note payable by the Company on the Maturity Date will be payable in U.S. dollars based on the following formula, as determined by the relevant Calculation Agent on the Determination Date, provided that in no event shall the Principal Redemption Amount be less -------- than zero: U.S. dollar principal amount of such Note + [[French Franc Carry Amount + Long Position Unwind Amount] / FFR/USD]. On any New York Business Day on or after May 17, 1994 and prior to 5:00 P.M. New York City time on the second New York Business Day prior to the Maturity Date, the Holder of the Notes may exercise the Principal Redemption Lock Option to lock-in the Principal Redemption Amount on the date (the "Principal Redemption Lock Option Date") which is the earlier of (i) the New York Business Day selected by such Holder (which may not be earlier than the second Calculation Business Day after the Exercise Date) and (ii) the Maturity Date. The Principal Redemption Lock Option can be exercised only by a Holder or Holders holding a Note or Notes having an aggregate principal amount of $50,000,000 or more. In the event that the Principal Redemption Lock Option is exercised by the Holder of any Note, such election shall be binding and irrevocable with respect to such Note. To exercise the Principal Redemption Lock Option, the beneficial owner of a Note must (i) give irrevocable written exercise instructions on a New York Business Day (the "Exercise Date") to (a) Merrill Lynch Capital Services, Inc. ("MLCS"), World Financial Center, North Tower, 7th Floor, New York, New York 10281 (phone 212-449-6177) and (b) the Trustee, Chase Manhattan Bank (National Association), 4 Chase MetroTech Center, Brooklyn, New York 11245, Attention: Corporate Trust Administration, and (ii) cause title of such Note to be transferred free on the records of the Securities Depository to the Trustee by the second New York Business Day immediately succeeding the Exercise Date. Upon receipt of the Note, the Trustee will record that the Principal Redemption Lock Option with respect to such Note has been exercised and will cause title of the Note to be transferred free on the records of the Securities Depository to the account of the Participant designated by the beneficial owner. If the Trustee does not receive the transfer of the Note for which exercise notice has been duly given to MLCS and the Trustee by the close of business of the second New York Business Day immediately succeeding the Exercise Date, the Principal Redemption Lock Option will be deemed not to have been exercised with respect to such Note. In the absence of manifest error, determinations by the relevant Calculation Agent shall be final and binding on the Company and the Holders of the Notes. S-2 If an Event of Default (as defined in the Indenture) with respect to the Notes shall have occurred and be continuing, the Principal Redemption Amount of all of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. In such cases, the Principal Redemption Amount declared due and payable on the date of acceleration will be calculated as if such date of acceleration were the Principal Redemption Lock Option Date. Any payment of principal or interest required to be made on an Interest Payment Date or the Maturity Date, as the case may be, which is not a New York Business Day may be made on the next succeeding New York Business Day with the same force and effect as if made on such Interest Payment Date or the Maturity Date, as the case may be, and no interest will accrue with respect to such payment for the period from and after such Interest Payment Date or the Maturity Date, as the case may be. DEFINITIONS As used with respect to the Notes, the following terms and definitions apply: "Days Since" shall mean the number of days, determined on the basis of a 360-day year, from and including the immediately preceding PIBOR Reset Date, or date of original issuance if no PIBOR Reset Dates have occurred prior to a Principal Redemption Lock Option Date, to but excluding the Principal Redemption Lock Option Date. "Days To" shall mean the number of days, determined on the basis of a 360-day year, from and including the Principal Redemption Lock Option Date to but excluding the date that except for the Principal Redemption Lock Option would have been the next succeeding PIBOR Reset Date. "D360" shall mean the number of days, determined on the basis of a 360-day year of twelve 30-day months, from and including the Principal Redemption Lock Option Date to but excluding the Maturity Date. "French Franc Carry Amount" shall equal: (i) if the Principal Redemption Lock Option is not exercised prior to maturity: (a) FFR Notional Amount X 6.195%, minus (b) FFR Notional Amount/360 X [[(6.26% X 92) X P2 X P3 X P4] + [(PIBOR(2) X 94) X P3 X P4] + [(PIBOR(3) X 91) X P4] + [PIBOR(4) X 88]] S-3 (ii) if the Principal Redemption Lock Option Date is on or after May 17, 1994 but before June 17, 1994: (a) FFR Notional Amount X [6.195% - Swap Rate X D360/360], minus (b) FFR Notional Amount/360 X (1+PIBOR(Maturity) X (273+Days To)/360)/(1+PIBOR(Lock) X Days To/360) X [(6.26% X Days Since) X (1+PIBOR(Lock) X Days To/360) + ((6.26% - PIBOR(Lock)) X Days To)] (iii) if the Principal Redemption Lock Option Date is on or after June 17, 1994 but before September 17, 1994: (a) FFR Notional Amount X [6.195% - Swap Rate X D360/360], minus (b) FFR Notional Amount/360 X (1+PIBOR(Maturity) X (179+Days To)/360)/(1+PIBOR(Lock) X Days To/360) X [(6.26% X 92) X (1+PIBOR(2) X Days Since/360) X (1+PIBOR (Lock) X Days To/360) + (PIBOR(2) X Days Since) X (1+PIBOR(Lock) X Days To/360) + ((PIBOR(2) - PIBOR(Lock)) X Days To)] (iv) if the Principal Redemption Lock Option Date is on or after September 17, 1994 but before December 17, 1994: (a) FFR Notional Amount X [6.195% - Swap Rate X D360/360], minus (b) FFR Notional Amount/360 X (1+PIBOR(Maturity) X (88+Days To)/360)/(1+PIBOR(Lock) X Days To/360) X [(6.26% X 92) X P2 X (1+PIBOR(3) X Days Since/360) X (1+PIBOR(Lock) X Days To/360) + (PIBOR(2) X 94) X (1+PIBOR(3) X Days Since/360) X (1+PIBOR(Lock) X Days To/360) + (PIBOR(3) X Days Since) X (1+PIBOR(Lock) X Days To/360) + ((PIBOR(3) - PIBOR(Lock)) X Days To)] S-4 (v) if the Principal Redemption Lock Option Date is on or after December 17, 1994 but before the Maturity Date: (a) FFR Notional Amount X [6.195% - Swap Rate X D360/360], minus (b) FFR Notional Amount/360 X [(6.26% X 92) X P2 X P3 X (1+PIBOR(4) X Days Since/360) X (1+PIBOR(Lock) X Days To/360) + (PIBOR(2) X 94) X P3 X (1+PIBOR(4) X Days Since/360) X (1+PIBOR(Lock) X Days To/360) + (PIBOR(3) X 91) X (1+PIBOR(4) X Days Since/360) X (1+PIBOR(Lock) X Days To/360) + (PIBOR(4) X Days Since) X (1+PIBOR(Lock) X Days To/360) + ((PIBOR(4) - PIBOR(Lock)) X Days To)] "FFR Notional Amount" means FFR37,000,000 for each U.S.$1,000,000 principal amount of Notes. "Calculation Business Day" means any day which is both a New York Business Day and a Paris Business Day. "Calculation Agent" means (i) with respect to the calculation of FFR/USD, Merrill Lynch International Bank, and (ii) with respect to all other terms relating to the Principal Redemption Amount and the Principal Redemption Amount, Merrill Lynch Capital Services, Inc. "Determination Date" means (i) if the Principal Redemption Lock Option is not elected, the second Calculation Business Day prior to the Maturity Date, and (ii) if the Redemption Lock Option is elected, the second Calculation Business Day prior to the Principal Redemption Lock Option Date. "FFR/USD" means the exchange rate for French Francs per U.S. dollar as determined by the relevant Calculation Agent equal to the arithmetic mean of spot offer rates for French Francs (spot bid for U.S. dollars) at 10 A.M. (Paris time) on the second Calculation Business Day preceding the Maturity Date, or, if the Principal Redemption Lock Option is exercised, on the second Calculation Business Day prior to the Principal Redemption Lock Option Date, for an amount of French Francs equal to an amount representative of transactions in such market at such time for delivery on the Maturity Date which have been obtained by the Calculation Agent from five major currency exchange rate market makers selected by the Calculation Agent, after eliminating the highest and lowest of such rates (or, in the event of equality of the highest and/or lowest rates, after eliminating one of such highest and/or lowest rates, as the case may be). If fewer than five market-makers are quoting as described in this paragraph, then the FFR/USD will equal the arithmetic mean of the spot offer rates obtained and neither the highest nor the lowest of such quotations will be eliminated. If only one market-maker is quoting as described in this paragraph, then FFR/USD will equal such quote. "Long Position Unwind Amount" shall equal: FFR Notional Amount X 4.19 X (6.195% - Swap Rate) "New York Business Day" means any day that is not a Saturday or a Sunday and that, in The City of New York, is not a day on which banking institutions are generally authorized or obligated by law to close. S-5 "Paris Business Day" means a day (other than a Saturday or Sunday) on which banks and foreign exchange markets are open for business in Paris. "PIBOR" means (a) with respect to PIBOR(2), PIBOR(3), PIBOR(4), and PIBOR(Lock) and PIBOR(Maturity), if the Principal Redemption Lock Option Date is the same day as an otherwise specified PIBOR Reset Date, the rate expressed as a percentage determined on the relevant PIBOR Reset Date equal to the rate for deposits in French Francs for a period of the relevant PIBOR Index Maturity which appears on the Reuters Screen PIBO Page as of 11:00 A.M., Paris time, on the day that is one Paris Business Day preceding such PIBOR Reset Date. If such rate does not appear on the Reuters Screen PIBO Page, PIBOR shall mean the rate determined on the basis of the rates at which deposits in French Francs are offered by the Paris office of four major banks in the Paris interbank market at approximately 11:00 A.M., Paris time, on the day that is one Paris Business Day preceding such PIBOR Reset Date in an amount equal to an amount representative of a transaction in such market at such time. If at least two quotations are provided, PIBOR for such PIBOR Reset Date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, PIBOR for such PIBOR Reset Date will be the arithmetic mean of the rates quoted by major banks in Paris, selected by the Calculation Agent, at approximately 11:00 A.M., Paris time, on the Paris Business Day preceding such PIBOR Reset Date for loans in French Francs to leading European banks for a period of the PIBOR Index Maturity commencing on that PIBOR Reset Date in an amount equal to an amount representative of a transaction in such market at such time. (b) with respect to PIBOR(Lock) and PIBOR(Maturity), if the Principal Redemption Lock Option Date is not the same day as an otherwise specified PIBOR Reset Date, the rate expressed as a percentage determined on the Paris Business Day preceding the relevant PIBOR Reset Date equal to the rate for deposits in French Francs for a period of the relevant PIBOR Index Maturity as calculated by the Calculation Agent based on its interpolation of the rate for such PIBOR Index Maturity using rates for various maturities as reported as specified in (a) above. "PIBOR Reset Date" in connection with the use of the term "PIBOR" shall mean the date specified below corresponding to the designation in the parentheses following the term PIBOR: (2) June 17, 1994 (3) September 17, 1994 (4) December 17, 1994 (Lock) the Principal Redemption Lock Option Date (Maturity) the Principal Redemption Lock Option Date "PIBOR Index Maturity" shall mean: (i) with respect to PIBOR(2), PIBOR(3) and PIBOR(4), three months; (ii) with respect to PIBOR(Lock), the term from the Principal Redemption Lock Option Date through the date of what would otherwise have been the next succeeding PIBOR Reset Date or Maturity Date, as the case may be; and (iii) with respect to PIBOR(Maturity), the term from the Principal Redemption Lock Option Date through the Maturity Date. "P2" means: (1 + PIBOR(2)) X (94/360). "P3" means: (1 + PIBOR(3)) X (91/360). "P4" means: (1 + PIBOR(4)) X (88/360). S-6 "Reuters Screen" means, when used in connection with any designated page, the display page so designated on the Reuter Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying a comparable rate). "Swap Rate" means: (i) if the Principal Redemption Lock Option is not elected, the offered- side fixed rate (expressed as a percent) of a fixed for floating FFR PIBOR interest rate swap transaction (a "Swap Transaction") with a five year maturity, beginning on the Maturity Date, such rate being determined by the relevant Calculation Agent as of 11:00 A.M. (Paris time) on the Determination Date as shown on Reuters Screen Page ICAT; provided that if such rate is not being shown on Reuters Screen Page ICAT by 3:00 P.M. (Paris time) on the Determination Date, then the Swap Rate shall mean the offered-side fixed rate (expressed as a percent) of a Swap Transaction with a five year maturity, beginning on the Maturity Date, such rate being determined by the relevant Calculation Agent as of 11:00 A.M. (Paris time) on the Determination Date as shown on Telerate Page 2514; provided further that if such rate is not being shown on Telerate Page 2514 by 3:00 P.M. (Paris time) on the Determination Date, then the Swap Rate shall mean the offered-side fixed rate (expressed as a percent) of a Swap Transaction with a five year maturity, beginning on the Maturity Date, such rate being determined by the relevant Calculation Agent as of 11:00 A.M. (Paris time) on the Determination Date as shown on Telerate Page 42284; provided further that if such is not being shown on Telerate Page 42284 by 3:00 P.M. (Paris time) on the Determination Date, then the Swap Rate shall be determined by such Calculation Agent on such Determination Date based on the arithmetic mean of the rate quoted by three leading market-makers in Paris in such interest rate transactions selected by such Calculation Agent (from five such market-makers and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)); provided further that if two, three or four (and not five) of such market-makers are quoting as described, then the Swap Rate shall be based on the arithmetic mean of the rates obtained and neither the highest nor the lowest of such quotations will be eliminated; and provided further that if only one such market-maker is quoting as described, then the Swap Rate shall be the rate obtained. (ii) if the Principal Redemption Lock Option is elected, the offered-side fixed rate (expressed as a percent) of a Swap Transaction with a maturity equal to the period from the Rate Lock Option Date to the date five years from the Maturity Date, beginning on the Principal Redemption Lock Option Date, determined by the Calculation Agent on the Determination Date in the following manner: (a) determine the offered-side fixed rate for a Swap Transaction with a maturity of five years beginning on the Maturity Date as described in (i) above (the "Five Year Swap Rate"); (b) determine the offered-side fixed rate for a Swap Transaction with a maturity of seven years beginning on the Maturity Date as described in (i) above (the "Seven Year Swap Rate"); (c) multiply the difference between the Seven Year Swap Rate and the Five Year Swap Rate by a factor equal to: (x) the number of days, determined on the basis of a 360-day year of twelve 30-day months, from the Principal Redemption Lock Option Date to the Maturity Date, divided by (y) 360. (d) add the value calculated in (c) above to the Five Year Swap Rate. S-7 "Telerate Page" means, when used in connection with any designated page, the display page so designated on the Dow Jones Telerate Service (or such other page as may replace such page on that service for the purpose of displaying a comparable rate). All other capitalized terms used but not defined herein shall have the meanings assigned to such terms in the accompanying Prospectus and Prospectus Supplement. S-8 The following table sets forth the closing values of the FFR/USD exchange rate, the Swap Rate for a Swap Transaction with a maturity of five years and PIBOR for three months on the last business day of each quarter for the periods indicated. The historical experience of such rates should not be taken as an indication of future performance, and no assurance can be given as to the levels of such rates as of their respective Determination Dates. PIBOR and the Swap Rate used to determine the Principal Redemption Amount may be maturities other than those specified below.