[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14736]


[[Page Unknown]]

[Federal Register: June 17, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26064]

 

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

June 10, 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 July 5, 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.

American Electric Power Company Inc., et al. (70-7022)

    American Electric Power Company, Inc. (``AEP''), a registered 
holding company, and AEP Generating Company (``Generating''), an 
electric public utility subsidiary of AEP, both of 1 Riverside Plaza, 
Columbus, Ohio 43215, have filed a post-effective amendment to their 
application-declaration filed under Sections 9(a), 10, 12(b) and 12(d) 
of the Act and Rules 44 and 45 thereunder.
    By order dated August 17, 1984 (HCAR No. 23399), Generating 
acquired a \1/2\ undivided interest in the Rockport Generating Station 
(``Plant'') with Indiana & Michigan Electric Company, now Indiana 
Michigan Power Company (``I&M''), also a subsidiary of AEP, including 
responsibility for 50% of the costs associated with acquiring certain 
air and water pollution control devices (``Project'').
    By order dated October 4, 1984 (HCAR No. 23445) (``October 1984 
Order''), Generating was authorized to enter into an Agreement of Sale 
(``Agreement'') with the City of Rockport, Indiana (``City'') providing 
for the construction and installation of the Project by the City, and 
the issuance by the City of pollution control revenue bonds (``Series 
1984 A bonds'') to finance Generating's share of the Project. The 
October 1984 Order authorized the issuance of the Series 1984 A Bonds 
in a principal amount of $150 million. In addition, the October 1984 
Order reserved jurisdiction ``with respect to the fees and commissions 
to be incurred by [Generating] and AEP in connection with this 
transaction, and the terms of sale under the Agreement.''
    By order dated September 6, 1985 (HCAR No. 23821) (``1985 Order''), 
Generating was authorized to enter into a First Amendment to Agreement 
of Sale (``1985 Agreement'') with the City providing for the issuance 
and sale of three additional series of pollution control bonds 
(collectively, ``Series 1985 Bonds''), each in the principal amount of 
$55 million with a maturity of September 1, 2014. One series of the 
Series 1985 Bonds was issued with a variable interest rate (``Variable 
Rate Bonds'') the rate of which was based upon an index and not to 
exceed 12% per annum, determined weekly and payable monthly. A second 
series of the Series 1985 Bonds was issued with the interest payable 
semi-annually at a rate which will be adjusted every five years based 
upon an index (``Adjustable Bonds''). A third series of the Series 1985 
Bonds was issued with the interest rate fixed at 9\3/8\% per annum, 
payable semi-annually (``Fixed Rate Bonds''), and these Fixed Rate 
Bonds were issued subject to optional redemption following an initial 
period not to exceed ten years. The proceeds of the Series 1985 Bonds 
were used to cover a portion of the cost of construction of the Project 
and to refund the outstanding short-term Series 1984 A Bonds in the 
principal amount of $150 million. The 1985 Order included no 
reservation of jurisdiction.
    AEP and Generating now propose that Generating entire into an 
agreement with the City whereby the City will issue and sell up to $55 
million of a series of refunding bonds (``Refunding Bonds'') the net 
proceeds from the sale of which will be used to provide for the payment 
of principal required for the refunding prior to their stated maturity 
of $55 million principal amount of the Fixed Rate Bonds. The Refunding 
Bonds will be issued under and secured by the existing indenture 
(``Indenture'') between the City and the Lincoln National Bank and 
Trust Company, as trustee (``Trustee'') and a fifth supplemental 
indenture (``Fifth Supplemental Indenture'') to be execute pursuant to 
Commission authorization under this post-effective amendment. Pursuant 
to the Indenture and the Fifth Supplemental Indenture, the proceeds of 
the sale of the Refunding Fixed Rate Bonds will be deposited with the 
Trustee and applied by the Trustee, together with other funds supplied 
by Generating, to the redemption of the Series 1985 A Bonds at a price 
of 102% of the principal amount thereof.
    It is stated that the Refunding Fixed Rate Bonds will bear interest 
semi-annually and mature at a date or dates not more than 40 years from 
the date of their issuance. The Refunding Fixed Rate Bonds may be 
subject to mandatory or optional redemption under circumstances and 
terms specified at the time of pricing, and, if it is deemed advisable, 
may also include a sinking fund provision. In addition, the Refunding 
Fixed Rate Bonds may not, if it is deemed advisable, be redeemable at 
the option of the City in whole or in part at any time for a period to 
be determined at the time of pricing the Refunding Fixed Rate Bonds.
    Generating has been advised that, depending on maturity and other 
factors, the annual interest rate on obligations, interest on which is 
so excludable from gross income, historically has been, and can be 
expected at the time of issuance of the Refunding Fixed Rate Bonds to 
be, 1\1/2\% to 2\1/2\% or more lower than the rates of obligations of 
like terms and comparable quality, interest on which is fully subject 
to Federal income tax. In any event, on series or Refunding Fixed Rate 
Bonds will be issued at rates in excess of those generally obtained at 
the time of pricing for sales of substantially similar tax-exempt bonds 
(having the same maturity, issued by entities of comparable credit 
quality and having similar terms, conditions and features). As of June 
1, 1994, Generating anticipated that the interest rate for the 
Refunding Fixed Rate Bonds would be 7.25% without any credit 
enhancement and 6.75% with bond insurance.
    Generating will not agree, without further Commission 
authorization, to the issuance of any Refunding Fixed Rate Bond by the 
City (i) if the stated maturity of any such Bond shall be more than 
forth (40) years, (ii) if the rate of interest to be borne by any such 
Bond shall exceed 8% per annum, (iii) if the discount from the initial 
public offering price of any such Bond shall exceed 5% of the principal 
amount thereof, or (iv) if the initial public offering price shall be 
less than 95% of the principal amount thereof.
    Generating also proposes to provide credit enhancement for the 
Refunding Bonds in the form of a letter of credit, surety bond or bond 
insurance and pay any related fees. As a supplement or alternative to a 
letter of credit, surety bond or bond insurance, AEP proposes to 
guarantee the Refunding Bonds. Any letter of credit would not exceed 
$55 million and would be for a term ranging from one to five years and 
would be renewable. Drawings under the letter of credit would bear 
interest at no more than 1% above the bank's prime rate. Generating may 
pay an annual fee which would not exceed 1.25% of the face amount of 
the letter of credit.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14736 Filed 6-16-94; 8:45 am]
BILLING CODE 8010-01-M