[Federal Register Volume 59, Number 29 (Friday, February 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3193]


[[Page Unknown]]

[Federal Register: February 11, 1994]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-25986]

 

Filings Under the Public Utility Holding Company Act of 1935 
(``Act'')

February 4, 1994.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated thereunder. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendments thereto is/are available for public 
inspection through the Commission's Office of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by February 28, 1994, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in case of an attorney at law, by 
certificate) should be filed with the request. Any request for hearing 
shall identify specifically the issues of fact or law that are 
disputed. A person who so requests will be notified of any hearing, if 
ordered, and will receive a copy of any notice or order issued in the 
matter. After said date, the application(s) and/or declaration(s), as 
filed or as amended, may be granted and/or permitted to become 
effective.

Entergy Corporation (70-8055)

    Entergy Corporation (``Entergy''), 225 Baronne Street, New Orleans, 
Louisiana 70112, a registered holding company, and its wholly owned 
public-utility subsidiary companies Gulf States Utilities Company 
(``Gulf States''), 350 Pine Street, Beaumont, Texas 77701, Arkansas 
Power & Light Company, 425 West Capitol, 40th Floor, Little Rock, 
Arkansas 72201, Louisiana Power & Light Company and New Orleans Public 
Service Inc., both located at 317 Baronne Street, New Orleans, 
Louisiana 70112, Mississippi Power & Light Company, 308 East Pearl 
Street, Jackson, Mississippi 39201, System Energy Resources, Inc., 
Entergy Operations, Inc., both located at 1349 Echelon Parkway, 
Jackson, Mississippi 39213, System Fuels, Inc., and Entergy Services, 
Inc., both located at 639 Loyola Avenue, New Orleans, Louisiana 70113 
(collectively, ``Participating Companies''), have filed a post-
effective amendment to their application-declaration under sections 
6(a), 7, 9(a), 10 and 12(b) of the Act and Rules 40, 43 and 50(a)(5) 
thereunder.
    By order dated November 18, 1992 (HCAR No. 25680) (``Order''), the 
Participating Companies were authorized, among other things, to: (1) 
Engage in external borrowing arrangements and issue and sell unsecured 
promissory notes to banks (``Notes'') and commercial paper to 
commercial paper dealers (``Commercial Paper''); and/or (2) finance 
their interim capital needs through the Entergy system money pool 
(``Money Pool''), through November 30, 1994.
    On December 31, 1993 Entergy and Gulf States, pursuant to the 
Commission's memorandum opinion and order dated December 17, 1993 (HCAR 
No. 25952), consummated various transactions whereupon Gulf States 
became a wholly owned operating subsidiary company of Entergy.
    Gulf States now proposes, through November 30, 1994, to borrow and 
lend money to the Money Pool, and to issue Notes and Commercial Paper 
to commercial paper dealers up to an aggregate principal amount of $455 
million (``Short-Term Borrowings''). Gulf States proposes to join as a 
participant in the Money Pool, which will continue to be administered 
and subject to the terms and conditions of the Order.
    Gulf States requests that the Commission reserve jurisdiction over 
its Short-Term Borrowings up to $320 million, pending completion of the 
record. Therefore, total borrowings by Gulf States will not exceed $125 
million through the Money Pool, the issuance and/or sale of the Notes 
and Commercial Paper.
    The Notes will mature in less than one year from the date of 
issuance, and, assuming a 6% per annum prime commercial bank rate, the 
effective interest rate cost would be approximately 6.7%. The 
Commercial Paper will be in the form of unsecured promissory notes 
having varying maturities not in excess of 270 days. No commission or 
fee will be payable by Gulf States in connection with the issuance and 
sale of the Commercial Paper. Gulf States has requested an exception 
from the competitive bidding requirements of Rule 50 pursuant to 
subsection (a)(5) with regard to the issue and sale of the commercial 
paper.
    The proceeds from the proposed borrowings will be used by Gulf 
States to provide interim financing for construction expenditures, 
which in 1994 is estimated to be $129.9 million. In addition, Gulf 
States will require $6.5 million to meet long-term debt maturities, to 
satisfy sinking fund requirements as well as for the possible 
refunding, redemption, purchase or other acquisition of all or a 
portion of certain series of high-cost debt and preferred stock.

Yankee Atomic Electric Company (70-8083)

    Yankee Atomic Electric Company (``Yankee Atomic''), 580 Main 
Street, Bolton, MA 01740, an indirect subsidiary company of New England 
Electric System and Northeast Utilities, both registered holding 
companies, has filed a post-effective amendment to its declaration 
under sections 6(a) and 7 of the Act.
    By order dated December 16, 1992 (HCAR No. 25709), the Commission 
authorized Yankee Atomic to issue and sell, from time to time through 
December 31, 1994, short-term notes (``Notes'') to banks up to an 
aggregate principal amount of $3 million at any one time. Yankee Atomic 
states that the nature of its business has changed to that of a service 
type company because the board of directors decided to cease 
permanently the production of power from its only generating plant.\1\ 
Yankee Atomic now requests an increase of the borrowing authority to 
$10 million at any one time and an extension of such authority through 
December 31, 1995.
---------------------------------------------------------------------------

    \1\Yankee Atomic currently has authority to enter into a service 
type business by Commission order dated August 20, 1968 (HCAR No. 
16141).
---------------------------------------------------------------------------

    The Notes will be payable in less than one year from the date of 
issuance. The interest rate will not exceed the prime lending rate of 
the banks plus 4%. Yankee Atomic will pay fees of up to \1/2\% on the 
total amount of the line to the banks in lieu of compensating balance 
arrangements. Certain of such borrowings may be without prepayment 
privileges. Based on fees of \1/2\% on the total amount of the line, 
the effective interest cost would be approximately 10.5% per annum, 
assuming a prime rate of 6%. The proposed borrowings will be repaid 
from time to time depending on the cash requirements of Yankee Atomic.

Central and South West Corporation, et al. (70-8157)

    Central and South West Corporation (``CSW''), a registered holding 
company, its service company subsidiary, Central and South West 
Services, Inc. (``CSWS''), both located at 1616 Woodall Rodgers 
Freeway, Dallas, Texas 75202, and CSW's public-utility subsidiary 
companies, Central Power and Light Company (``CPL''), 539 North 
Carancahua Street, Corpus Christi, Texas 78401-2802, Public Service 
Company of Oklahoma, 212 East Sixth Street, Tulsa, Oklahoma 74119-1212, 
Southwestern Electric Power Company, 428 Travis Street, Shreveport, 
Louisiana 71156-0001 and West Texas Utilities Company, 301 Cypress 
Street, Abilene, Texas 79601-5820, and a non-utility subsidiary 
company, Transok, Inc. (``Transok''), 2 West Sixth Street, Tulsa, 
Oklahoma 74119 (collectively, ``Subsidiaries'') have filed a post-
effective amendment to their application-declaration under sections 
6(a), 7, 9(a), 10, 12(b) and 12(f) of the Act and Rules 43, 45 and 
50(a)(5) thereunder.
    By prior order, dated March 31, 1993 (HCAR No. 25777) (``Order''), 
CSW and its Subsidiaries were authorized to continue, through March 31, 
1995, their short-term borrowing program, which includes: (1) The sale 
of commercial paper by CSW to commercial paper dealers and financial 
institutions and the sale of short-term notes to banks and their trust 
departments by CSW and the Subsidiaries; and (2) the CSW System Money 
Pool (``Money Pool''), as previously authorized by orders dated April 
5, 1989, October 10, 1989, May 15, 1990 and March 29, 1991 (HCAR Nos. 
24855, 24966, 25090 and 25288, respectively). The aggregate principal 
amount of outstanding borrowings for CSW and its Subsidiaries together 
may not exceed $800 million (``Aggregate Limitation'').
    By subsequent order, dated September 28, 1993 (HCAR No. 25897), 
Transok was authorized to increase, from $120 million to $200 million, 
its aggregate principal amount of short-term borrowing outstanding at 
any one time (``Individual Limitation''), on the same terms and 
conditions as provided in the Order. In all other respects the 
authority remained as previously ordered.
    CSW now proposes to increase the Aggregate Limitation, from $800 
million to $950 million, through March 31, 1995. Further, CSWS and CPL 
propose to increase their respective Individual Limitations from $90 
million to $150 million and from $250 million to $300 million.
    CSWS proposes to increase its authorization principally to finance 
anticipated expenditures for building construction and improvements, 
acquisition of computer hardware and reorganization and relocation 
costs. CPL proposes to increase its authorization to meet additional 
cash requirements resulting from the outage at the South Texas Project 
nuclear generating station and to provide interim financing for 
additional construction. In all other respects, the authority will 
remain as previously ordered.

The Southern Company (70-8309)

    The Southern Company (``Southern''), 64 Perimeter Center East, 
Atlanta, Georgia 30346, a registered holding company, has filed an 
application-declaration pursuant to sections 6(a), 6(b), 7, 32 and 33 
of the Act and rules 50(a)(5) and 53 thereunder.
    Southern proposes to issue and sell from time to time, prior to 
April 1, 1996, short-term and/or term notes to lenders and commercial 
paper to dealers in an aggregate principal amount at any one time 
outstanding of up to $500,000,000.
    Southern has agreements with several banks providing for revolving 
loans on a short-term or term-loan basis and credit commitments, each 
evidenced by an agreement (``Agreement''), in aggregate amounts of up 
to $130,000,000 outstanding at any one time.
    Each short-term borrowing by Southern under the Agreements will be 
evidenced by a promissory note to be dated the date of the initial 
borrowing, with the date and amount of each short-term borrowing 
thereafter to be recorded on a ``grid'' attached to the note. Each 
borrowing under a short-term note will mature not more than 360 days 
after the date of borrowing. Such short-term borrowings will be 
renewable at maturity and, under certain of the Agreements, may be 
converted to term loans at Southern's option. Under the term-loan 
option, borrowings would be repaid in twelve equal quarterly 
installments, beginning after the termination date in effect at the 
time of the borrowing, or at an earlier date at Southern's option.
    The committed interest rate options available under each Agreement 
will be (a) the bank's floating prime rate (``Base Borrowing''), (b) 
the bank's certificate of deposit rate adjusted for Federal Reserve 
Board reserve requirements imposed upon the bank (``CD Borrowing'') 
plus up to \3/4\ of 1%, and (c) Libor adjusted for Federal Reserve 
Board reserve requirements imposed upon the bank (``Eurodollar 
Borrowing'') plus up to \5/8\ of 1%. In addition, under each Agreement, 
subject to the further agreement of Southern and each bank, Southern 
may borrow at negotiated rates that are lower than the bank's committed 
rates. Under each Agreement, Southern is obligated to pay a commitment 
fee based upon the unused portion of the bank's commitment in the 
amount of up to \1/5\ of 1% per annum. Compensating balances may be 
used in lieu of fees to compensate certain of the banks.
    Southern proposes that it may effect borrowings under the above-
described existing facilities or under facilities that may hereafter be 
arranged on terms no less favorable to Southern than those described 
below with respect to other borrowing arrangements.
    Southern also proposes to effect borrowings from certain banks or 
other lending institutions. These borrowings will be evidenced by notes 
to be dated as of the date of such borrowings and to mature in not more 
than 3 years after the date of issue, or by grid notes evidencing all 
outstanding borrowings from each lender to be dated as of the date of 
the initial borrowings and to mature not more than 3 years after the 
date of issue.
    Borrowings from these institutions will be at the lender's 
prevailing rate offered to corporate borrowers of similar quality, 
which will not exceed the prime rate or (i) Libor plus up to \3/4\ of 
1%, (ii) the lender's certificate of deposit rate plus up to 1% or 
(iii) a rate not to exceed the prime rate to be established by bids 
obtained from the lenders pror to a proposed borrowing. Southern may 
pay a commitment fee based upon the unused portion of each lender's 
commitment in the amount of up to \1/2\ of 1% per annum. Compensating 
balances may be used in lieu of fees to compensate certain of the 
lenders. Southern proposes that any note evidencing such borrowings may 
not be prepayable, or that it may be prepaid with a payment of a 
premium that is not in excess of the stated interest rate on the note 
to be prepaid, which premium, in the case of a note having a maturity 
of more than one year, would generally thereafter decline to the date 
of the note's final maturity.
    Southern also proposes to issue and sell commercial paper to 
dealers from time to time through April 1, 1996. The commercial paper 
will be in the form of promissory notes with varying maturities not to 
exceed nine months, will be issued in denominations of not less than 
$50,000 and will not by its terms be prepayable prior to maturity. The 
commercial paper will be sold by Southern directly to or through a 
dealer or dealers. The discount rate (or the interest rate in the case 
of interest-bearing notes), including any commissions, will not be in 
excess of the discount rate per annum (or equivalent interest rate) 
prevailing at the date of issuance for commercial paper of comparable 
quality of the particular maturity sold by issuers thereof to 
commercial paper dealers. No commission or fee will be payable in 
connection with the issuance and sale of commercial paper, except for a 
commission not to exceed \1/8\ of 1% per annum payable to the dealer in 
respect of commercial paper sold through the dealer as principal.
    Southern proposes to use the net proceeds from the proposed 
borrowings, together with other available funds, to make additional 
equity investments in subsidiaries, including capital contributions to 
its operating subsidiaries, and for other corporate purposes. Such 
other purposes include investments in one or more direct or indirect 
subsidiaries of Southern that are ``exempt wholesale generators'' or 
``foreign utility companies,'' as defined in sections 32 and 33 of the 
Act, respectively. Southern states that, at any point in time, the 
aggregate of outstanding borrowings and/or commercial paper sales, 
proceeds of sales of new common stock used for the purpose of acquiring 
the securities of or other interest in any such entities, and 
guarantees of the securities of such entities, would not, in the 
aggregate, exceed $500,000,000.

CNG Transmission Corp., et al (70-8329)

    CNG Transmission Corp. (``Transmission''), 445 West Main Street, 
Clarksburg, West Virginia 26301, an interstate pipeline company and 
subsidiary company of Consolidated Natural Gas Co. (``CNG''), a 
registered holding company, the East Ohio Gas Co. (``East Ohio''), 1717 
E. 9th Street, Cleveland, Ohio 44114, Hope Gas, Inc. (``Hope''), Union 
National Center, P.O. Box 2868, Clarksburg, West Virginia 26302, 
Peoples Natural Gas Company (``Peoples''), CNG Tower, 625 Liberty 
Avenue, Pittsburgh, Pennsylvania 15222, and River Gas Company 
(``River''), 324 4th Street, Marietta, Ohio 45750, each a local 
distribution company and a subsidiary company of CNG, have filed an 
application-declaration under Sections 6(a), 7, 9(a) 10, and 12(b) and 
Rule 45 promulgated thereunder.
    The application-declaration requests the Commission to authorize 
Transmission, from time to time through June 30, 1995, to extend its 
credit to East Ohio, Hope, Peoples, and River up to an aggregate amount 
of $120 million and to authorize Transmission, from time to time 
through June 30, 1995, to acquire promissory notes from East Ohio, 
Hope, Peoples, and River up to an aggregate principal amount of $120 
million.
    In 1992, FERC issued Order No. 636 to require inter-state gas 
pipeline companies to eliminate their merchant role and to require them 
to ``unbundle'' their various services. On October 1, 1993, 
Transmission restructured its services in accordance with Order 636. In 
connection therewith, FERC authorized Transmission to recover through 
its customers the costs of the transition pursuant to Order 636 
(``Transition Costs'').
    The Transition Costs consist of the unrecovered purchased gas and 
sales-related transportation costs that remained on the date CNG 
implemented its Order 636 services. The initial bill for the Transition 
Costs amounts to about $177.9 million (``Initial Costs''). Transmission 
expects to bill additional Transition Costs in the future in 
consequence of prior period adjustments, annual LIFO storage account 
adjustments, additional charges or refunds for pipeline supplies, and 
other activities related to the implementation of Order 636.
    The FERC authorized Transmission to recover the Transition Costs 
through a direct bill mechanism to its customers, based on an 
allocation to which those customers agreed. FERC also approved an 
alternative mechanism for Transmission to recover the Transmission 
Costs, under which alternative the customers are allowed to amortize 
their respective shares of the Transition Costs over a 36-month period, 
with interest payable on the unpaid balance. To elect that alternative, 
the customers are required to execute promissory notes.
    Transmission will bill its customers, which include East Ohio, 
Hope, Peoples, and River, their allocated shares of the Initial Costs, 
which are $52.9 million, $4.6 million, $20.6 million, and $.6 million, 
respectively.
    Transmission anticipates that East Ohio, Hope, Peoples, and River 
all will elect the above-described alternative. Thus Transmission 
proposes to extend its credit to the four distribution companies and 
allow them to amortize their respective shares over 36-month periods. 
The interest on the unpaid balance will be the effective FERC interest 
rate prescribed in 18 CFR 154.67(c)(2)(iii)(A), which is now 6% per 
annum. If Transmission deems it appropriate, it might require one or 
all of the local distribution companies to sign promissory notes.

System Fuels, Inc. et al. (70-8331)

    Entergy Corporation (``Entergy''), 225 Baronne Street, New Orleans, 
Louisiana 70112, a registered holding company, and its indirect fuel 
supply subsidiary company, System Fuels, Inc. (``SFI''), 639 Loyola 
Avenue, New Orleans, Louisiana 70113, which is jointly owned by 
Entergy's public-utility subsidiary companies Arkansas Power & Light 
Company, Louisiana Power & Light Company, Mississippi Power & Light 
Company and New Orleans Public Service Inc. (together, ``Parents'') 
have filed an application-declaration under Sections 6(a), 7, 9(a), 10 
and 12(b) of the Act and Rule 45 thereunder.
    SFI is currently authorized by the Commission to effect external 
borrowings under: (1) A $20 million Revolving Credit Agreement with 
Bank of America National Trust and Savings Association (``B of A''), as 
last authorized by Commission order dated October 15, 1993 (HCAR No. 
25909); and (2) a $45 million Credit Agreement with the Yasuda Trust & 
Banking Co., Ltd. (``Yasuda''), as agent for the lenders, as last 
authorized by Commission order dated February 5, 1992 (HCAR No. 25467). 
In addition, SFI is authorized to effect unsecured short-term 
borrowings through the Entergy System Money Pool (``Money Pool'') under 
Commission order dated November 18, 1992 (HCAR No. 25680).
    SFI proposes to borrow and reborrow from Entergy pursuant to a loan 
agreement (``Loan Agreement'') from time-to-time, through December 31, 
1996, up to an aggregate principal amount of $30 million at any one 
time outstanding, and, if additional external financing subsequently 
becomes available, to enter into a loan agreement or agreements with 
one or more banks, through December 31, 1996, for up to an aggregate of 
$30 million at any one time outstanding. To the extent that SFI 
subsequently obtains any additional external bank loan commitment(s), 
the commitment(s) would correspondingly reduce the amount of Entergy's 
commitment to SFI pursuant to the Loan Agreement.
    Borrowings by SFI under the Loan Agreement and any additional bank 
loan commitment(s) shall be in addition to: (1) Borrowings by SFI from 
its Parents evidenced by promissory notes in the outstanding aggregate 
principal of $34 million, due December 31, 2008 (``Notes''), below; (2) 
borrowings by SFI from time-to-time through the Money Pool; and (3) 
borrowings by SFI pursuant to the B of A and Yasuda credit agreements. 
However, the Parents' investments in SFI, including the Notes, shall at 
all times equal at least 35 percent of the sum of: (1) The Parents' 
investments plus (2) all other outstanding indebtedness of SFI for 
borrowed money. As of September 30, 1993, the Parents' investments in 
SFI totalled $34.020 million consisting of: (1) $20,000 of common stock 
(200 shares at $100 per share) (HCAR No. 17400, December 17, 1971); and 
(2) $34 million in aggregate principal amount of Notes, as last 
authorized by Commission order dated December 23, 1982 (HCAR No. 
22800).
    The Borrowings by SFI from Entergy will be evidenced by a note of 
SFI representing the obligation of SFI to pay the full amount of the 
original loan commitment of $30 million or, if less, the aggregate 
unpaid principal amount of all loans made by Entergy, plus accrued 
interest. The note will mature on December 31, 1996 and will bear 
interest at the prime rate of Chemical Banking Corporation, New York, 
New York. SFI may at any time prepay in whole or in part, without 
premium or penalty, the unpaid principal amount of the note, and will 
be required to prepay the unpaid principal amount of the note to the 
extent that such amount exceeds Entergy's commitment at any time in 
effect.
    As an alternative, in whole or in part, to the proposed Loan 
Agreement with Entergy, SFI may endeavor to negotiate additional 
external borrowing arrangements with one or more banks, through 
December 31, 1996, for up to an aggregate of $30 million at any one 
time outstanding with the commitment(s) of any such bank or banks to 
correspondingly reduce the amount of Entergy's commitment to SFI under 
the Loan Agreement.
    The proposed bank borrowings would be evidenced by unsecured 
promissory notes customarily used by the lending bank or banks, would 
be payable not later than December 31, 1996, and would bear interest at 
a rate per annum no greater than two percentage points over the prime 
commercial bank rate in effect on the date of issuance or renewal or 
from time-to-time. However, the rate of interest on the notes may be 
based upon other market rates or indices such that as a result of 
fluctuations in such rates or indices, the rate may exceed for certain 
brief periods, the above-described maximum rate of interest. However, 
the effective interest rate for any 30-day period, on an annualized 
basis, may not exceed the above maximum rate. The selected rate would 
be the most favorable effective borrowing rate of SFI, taking into 
account compensating balances and/or commitment or other similar fees, 
and the proposed amount and maturity of each borrowing. The notes to 
banks would, at the option of SFI, or, under certain circumstances, 
with the consent of the lending bank, be prepayable, in whole or in 
part, at any time without premium or penalty. Compensating balances or 
the payment of equivalent commitment or other similar fees are not 
expected to exceed 10%. Assuming that a 10% compensating balance is 
maintained and assuming an interest rate of 8% per annum, the effective 
interest cost for borrowings from a bank or banks would be 
approximately 8.89% per annum.
    As an inducement to the bank or banks to make loans to SFI, Entergy 
requests authorization to guarantee the obligations of SFI to the bank 
or banks.
    SFI intends to use the proceeds of the proposed borrowings for the 
repayment from time-to-time of borrowings effected by SFI through the 
Money pool, which borrowings aggregated $31.976 million as of September 
30, 1993, for the repayment of other borrowings effected by SFI from 
time-to-time, for financing the acquisition and ownership of fuel and 
related facilities, for working capital purposes, and for other 
purposes in connection with SFI's fuel supply business.

Kingsport Power Company (70-8343)

    Kingsport Power Company (``Kingsport''), 422 Broad Street, 
Kingsport, Tennessee 37660, an electric utility subsidiary company of 
American Electric Power Company, Inc., a registered holding company, 
has filed a declaration under sections 6(a) and 7 of the Act and Rule 
50(a)(5) thereunder.
    Kingsport proposes to issue and sell from time-to-time through June 
30, 1995 its unsecured promissory notes (``Notes'') in the aggregate 
principal amount of $5 million, to one or more commercial banks, 
financial institutions or other institutional investors pursuant to one 
or more term loan agreements (``Proposed Term Loan Agreement''). The 
Proposed Term Loan Agreement and the Notes thereunder would be for a 
term of not less than nine months nor more than ten years from the date 
of borrowing.
    The Proposed Term Loan Agreement would provide that the Notes bear 
interest at either a fixed rate, a fluctuating rate or some combination 
of fixed and fluctuating rates. The actual rate of interest which each 
Note shall bear shall be subject to further negotiation between 
Kingsport and the lender. Any fixed rate of interest of the Notes will 
not be greater than 250 basis points above the yield to maturity, at 
the time of the issuance of the Notes, of United States Treasury 
obligations that mature on or about the date of maturity of the Notes. 
Any fluctuating rate will not be greater than 200 basis points above 
the rate of interest announced publicly by a major bank from time-to-
time as its base or prime rate.
    No compensating balances shall be maintained with, or fees in the 
form of substitute interest paid to, a lender under the Proposed Term 
Loan Agreement. However, in the event a bank or financial institution 
arranges for a borrowing from a third party, such institution may 
charge Kingsport a placement fee, not to exceed \7/8\% of the principal 
amount of such borrowing.
    The Proposed Term Loan Agreement specifies that, in the event a 
Note bearing interest at a fixed rate is paid prior to maturity, in 
whole or in part, and the fixed rate at that time exceeds the yield to 
maturity of certain United States Treasury securities maturing on or 
close to the Note, Kingsport shall pay to the lender an amount based 
upon the present value of such prepaid amounts discounted at such 
treasury yield.
    Proceeds realized from the sale of the Notes will be used to repay 
short-term debt of Kingsport. At September 30, 1993, the outstanding 
short-term indebtedness of Kingsport was $6.225 million.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-3193 Filed 2-10-94; 8:45 am]
BILLING CODE 8010-01-M