[Federal Register Volume 59, Number 189 (Friday, September 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24171]


[[Page Unknown]]

[Federal Register: September 30, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26130]

 

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

September 23, 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 October 17, 1994 to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 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.

General Public Utilities Corporation, et al. (70-7926)

    General Public Utilities Corporation (``GPU''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, a registered holding company, 
and its public-utility subsidiary companies Jersey Central Power & 
Light Company (``JCP&L''), 300 Madison Avenue, Morristown, New Jersey 
07960, Metropolitan Edison Company (``Met-Ed''), 2800 Pottsville Pike, 
P.O. Box 16001, Reading, Pennsylvania 19640 and Pennsylvania Electric 
Company (``Penelec''), 1001 Broad Street, Johnstown, Pennsylvania 15907 
(collectively, the ``GPU Companies''), have filed a post-effective 
amendment under sections 6(a) and 7 of the Act and rules 53 and 54 
thereunder to their declaration previously filed under sections 6(a) 
and 7 and rule 50(a)(5).
    By order dated March 18, 1992 (HCAR No. 25493) (``Order''), the 
Commission authorized the GPU Companies from time to time through March 
31, 1995 to: (1) Issue, sell and renew unsecured promissory notes 
(``Notes'') in amounts up to $150 million outstanding at any one time 
and maturing not more than six months from the date of issue, to 
certain banks under the terms of a revolving credit agreement (``Credit 
Agreement'') with Citibank, N.A. and Chemical Bank as co-agents and 
Chemical Bank as the administrative agent; (2) issue, sell and renew 
their unsecured promissory notes, maturing not more than nine months 
from the date of issue, pursuant to loan participation arrangements and 
informal lines of credit (``Lines of Credit'') in amounts up to the 
limitations on short-term indebtedness contained in their respective 
charters but, the case of GPU, $200 million; (3) incur other short-term 
unsecured debt (``Other Short-Term Debt''), from time to time, in 
amounts up to the limits permitted by their respective charters but, in 
the case of GPU, $200 million; and (4) in the case of JCP&L, Met-Ed and 
Penelec, issue and sell their respective unsecured promissory notes as 
commercial paper (``Commercial Paper'') in amounts up to their 
respective charter limits. In no event, however, would the total amount 
of such unsecured debt of any GPU Company outstanding at any one time 
exceed the limitations on such indebtedness imposed by such company's 
charter but, in case of GPU, $200 million.
    At June 30, 1994, the charter limits of JCP&L, Met-Ed and Penelec 
would have permitted them to have maximum short-term indebtedness 
outstanding at any one time of $275, $122 and $137 million, 
respectively.
    The GPU Companies now propose to extend the term of the Credit 
Agreement and to provide for an increase in the amount of borrowings 
that the GPU Companies may make thereunder. They also propose to extend 
and increase their other short-term borrowing capability. Accordingly, 
the GPU Companies now request authority from the effective date of the 
authorization herein sought through December 31, 1997 from time to time 
(1) To issue, sell and renew their unsecured promissory notes (``New 
Notes'') to certain banks (``Banks'') under the terms of a new 
revolving credit agreement or an amendment to the existing agreement 
(``New Credit Agreement'') in amounts up to $250 million outstanding at 
any one time, (2) to issue, sell and renew their unsecured promissory 
notes pursuant to loan participation arrangements and lines of credit 
(``New Lines of Credit'') in amounts up to the limitations on short-
term indebtedness contained in their respective charters and, in the 
case of GPU, $200 million, (3) in the cases of JCP&L, Met-Ed and 
Penelec to issue and sell their respective unsecured promissory notes 
as commercial paper (``New Commercial Paper'') in amounts up to their 
respective charter limits, and (4) to incur other short-term unsecured 
debt from time to time in amounts up to the limits permitted by their 
respective charters and, in the case of GPU, $200 million. In no event, 
however, would the total amount of such unsecured debt of any GPU 
Company outstanding at any one time exceed the limitation on such 
indebtedness imposed by such Company's charter and, in the case of GPU, 
$200 million. Citibank, N.A. and Chemical Bank would serve as co-agents 
under the New Credit Agreement and Chemical Bank would also serve as 
administrative agent.
    New Notes issued under the New Credit Agreement would mature not 
more than six months from their date of issue. The annual interest rate 
on each borrowing would be either (a) The Alternate Base Rate, as in 
effect from time to time, (b) the CD Rate, as in effect from time to 
time, plus an amount ranging from .375% to .625% depending upon the 
Debt Rating of the borrower and, in the case of GPU, the Debt Rating of 
JCP&L, or (c) the Eurodollar Rate, as in effect from time to time, plus 
an amount ranging from .25% to .50% depending upon the Debt Rating of 
the borrower and, in the case of GPU, the Debt Rating of JCP&L.
    The New Credit Agreement will afford the GPU Companies the option 
of inviting competitive bids from the Banks for requested maturities of 
up to six months in such principal amounts as a GPU Company may 
request, subject to the $250 million limit of the New Credit Agreement 
($200 million in the case of GPU). No Bank would be required to bid for 
any such loan and the GPU Companies would not be obligated to accept 
any bids received.
    The GPU Companies propose to pay the Banks a facility fee ranging 
from .125% to .375% per annum, depending on the Debt Ratings of Met-Ed, 
JCP&L and Penelec, of the total amount of the commitment, and a 
competitive bid fee of $2,500 for each request for a competitive bid. 
In addition, an agency fee of $25,000 would be payable to each of the 
Co-Agents upon signing of the New Credit Agreement, and an annual 
administrative agent fee of $15,000 would be payable to Chemical Bank.
    Issuance of the New Notes would be subject to certain conditions, 
and the New Notes would be subject to acceleration under certain 
circumstances. Borrowings bearing interest at the Alternate Base Rate 
would be prepayable at any time, without penalty; borrowings at the CD 
Rate or the Eurodollar Rate would also be prepayable, subject to 
payment of certain costs incurred by the Banks in connection with the 
prepayment; borrowings at a competitive bid rate would not be 
prepayable.
    Each borrowing pursuant to an unsecured promissory note issued 
under New Lines of Credit will bear interest at a rate (after giving 
effect to any fees or compensating balance requirements) not exceeding 
125% of the greater of (A) The lending bank's prime rate for commercial 
borrowing in effect from time to time, and (B) the Federal Funds Rate 
plus \1/2\ of 1%, will mature not more than nine months from the date 
of issuance, will be prepayable only to the extent provided therein and 
will not be issued as part of a public offering. New Lines of Credit 
borrowings may include borrowings under which a GPU Company would 
execute a master unsecured promissory note. The principal amount 
outstanding under each such master note would increase or decrease 
depending upon the amount of borrowings. Such arrangements are often 
employed to facilitate the sale of loan participations by the lending 
bank.
    Unsecured promissory notes sold as New Commercial Paper would be 
issued in denominations of $100,000 or multiples thereof with 
maturities of up to 270 days and would not be prepayable prior to 
maturity. New Commercial Paper would be sold directly to one or more 
commercial paper dealers at a discount rate prevailing at the date of 
issuance for commercial paper of comparable quality and of the 
particular maturity sold by other issuers of commercial paper. No fee 
or commission would be payable by JCP&L, Met-Ed or Penelec in 
connection with their issuances and sales of New Commercial Paper. The 
New Commercial Paper will be reoffered by the purchasing dealer or 
dealers to institutional investors at a discount of not more than \1/8\ 
of 1% per annum less than the prevailing discount rate to JCP&L, Met-Ed 
or Penelec. The commercial paper dealers will offer and resell the New 
Commercial Paper to not more than a total of 200 of their respective 
customers, identified and designated in a non-public list (``Closed 
List'') prepared by each such dealer in advance for this purpose.
    JCP&L, Met-Ed and Penelec may also utilize the services of one or 
more commercial paper placement agents (``Placement Agent'') through 
whom they would sell their New Commercial Paper directly to one or more 
institutional investors included on the Placement Agent's Closed List 
(as it may be amended) which would not exceed 200 such investors. The 
Placement Agent would arrange for the sale of New Commercial Paper and 
would be compensated for its services out of the discount on the sale. 
No fee or other commission would be otherwise payable by JCP&L, Met-Ed 
or Penelec in connection with the placement of their New Commercial 
Paper.
    The GPU Companies further propose to issue, sell and renew from 
time to time their unsecured promissory notes evidencing short-term 
borrowings from lenders such as commercial banks, insurance companies 
or other institutions. Such notes would mature not later than nine 
months after the date of issue, bear interest at a rate (after giving 
effect to any fees and compensating balance requirements) not in excess 
of the greater of 125% of (A) Such lender's or other recognized prime 
rate and (B) the Federal Funds Rate plus \1/2\ of 1%, would be 
prepayable only to the extent therein provided and would not be issued 
as part of any public offering.
    The proceeds from the issuance and sale of the unsecured promissory 
notes as proposed herein will be used by the GPU Companies to finance 
their businesses, including, in the case of GPU, to finance the 
acquisition of securities of EWGs and FUCOs.

Central and South West Services, Inc., et al. (70-8459)

    Central and South West Corporation (``CSW''), a registered holding 
company, and its service company subsidiary, Central and South West 
Services, Inc. (``CSWS''), both located at 1616 Woodall Rogers Freeway, 
Dallas, Texas 75202, have filed a declaration under Section 6(a), 7 and 
12(b) of the Act and Rule 45 thereunder.
    CSWS proposes, through December 31, 1996, to refinance certain of 
its long-term assets (``Assets''), including the CSW headquarters 
building located in Dallas, Texas (``Headquarters Building'') by 
borrowing up to $60 million from one or more commercial banks and/or 
institutional lenders. The Assets, including the Headquarters Building, 
are currently financed primarily through the CSW Money Pool (``Money 
Pool'').
    CSWS and CSW propose to refinance the Assets either through a 
floating rate loan from a commercial bank or through a fixed rate 
private placement of securities to institutional lenders. Bank 
borrowings will be evidenced by secured or unsecured notes with 
maturities not exceeding 15 years and bear interest at not more than 
100 basis points above the LIBOR or similar rate. In connection with 
such floating rate borrowing, CSWS requests authority to enter into 
interest rate swap agreements to obtain the benefits of fixed rate 
financing. Any swap agreements would provide that the prepayment of the 
notes would terminate CSWS' obligations to its counterparty under the 
swap agreement. Institutional borrowings will be evidenced by notes 
with maturities not exceeding 15 years and bear interest at a rate not 
expected to exceed the effective cost of money from unsecured prime 
commercial rate loans prevailing on the date of such borrowings. The 
choice between the financing alternatives will depend principally on 
market conditions.
    Proceeds from the proposed borrowings will not be used to finance 
the acquisition of an exempt wholesale generator or a foreign utility 
company as defined in Section 32 and 33 of the Act.
    As the sole holder of the outstanding common stock of CSWS and as 
an inducement to commercial banks or institutional lenders to make 
loans to CSWS, it is contemplated that CSW may be required to guarantee 
the obligations of CSWS to the lenders. Accordingly, CSW proposed to 
guarantee the payments due to lenders.

Alabama Power Company, et al. (70-8461)

    Alabama Power Company, 600 North 18th Street, Birmingham, Alabama 
35291 (``Alabama''), Georgia Power Company, 333 Piedmont Avenue, NE., 
Atlanta, Georgia 30308 (``Georgia''), Gulf Power Company, 500 Bayfront 
Parkway, Pensacola, Florida 32501 (``Gulf''), Mississippi Power 
Company, 2992 West Beach, Gulfport, Mississippi 39501 
(``Mississippi''), and Savannah Electric and Power Company, 600 Bay 
Street, East, Savannah, Georgia 31401 (``Savannah'') (collectively, 
``Operating Companies''), electric public utility subsidiaries of the 
Southern Company, a registered holding company, have filed an 
application-declaration under Sections 6(a), 7, 9(a), 10 and 12(b) of 
the Act and Rules 45 and 54 thereunder.
    Each Operating Company proposes to organize a separate special 
purpose subsidiary as either: (1) a limited liability company (``LLC'') 
under the Limited Liability Company Act (``LLC Act''); or (2) a limited 
partnership (``LP'') under the Revised Uniform Limited Partnership Act 
(``LP Act'') of any state in which they respectively are organized to 
do business or are incorporated, or of the State of Delaware or other 
jurisdiction considered advantageous by any of the Operating Companies 
(``Special Purpose Subsidiaries''). In the event that any Operating 
Company organizes its Special Purpose Subsidiary as either an LLC or an 
LP, it may also organize a second special purpose subsidiary under the 
General Corporation Law of any state in which they respectively are 
organized to do business or are incorporated, or of the State of 
Delaware or other jurisdiction, as the case may be (``Investment 
Sub''), for the respective purpose of: (1) Acquiring and holding 
Special Purpose Subsidiary common stock so as to comply with the 
requirement under the applicable LLC Act that a limited liability 
company have at least two members; and (2) acting as the general 
partner of such Special Purpose Subsidiary and acquiring, either 
directly or indirectly through such Investment Sub, a limited 
partnership interest in such Special Purpose Subsidiary to ensure that 
such Special Purpose Subsidiary will at all times have a limited 
partner to the extent required by the applicable LP Act.
    The Special Purpose Subsidiaries then will issue and sell their 
preferred securities (``Preferred Securities''), with a par or stated 
value or liquidation preference of up to $100 per security, at any time 
or from time-to-time, in one or more series through December 31, 1997. 
The Preferred Securities will be sold by the respective Special Purpose 
Subsidiaries in the following aggregate par or stated value or 
liquidation preference amounts: (1) Up to $175 million in the case of 
Alabama; (2) up to $300 million in the case of Georgia; (3) up to $15 
million in the case of Gulf; (4) up to $15 million in the case of 
Mississippi; and (5) up to $10 million in the case of Savannah.
    Each Operating Company and/or its respective Investment Sub will 
acquire all of the common stock or all of the general partnership 
interests, as the case may be, of its Special Purpose Subsidiary for an 
amount up to 21% of the total equity capitalization from time-to-time 
of such Special Purpose Subsidiary (``Equity Contribution''). Each 
Operating Company may issue and sell to its Special Purpose Subsidiary, 
at any time or from time-to-time in one or more series, subordinated 
debentures, promissory notes or other debt instruments (``Notes'') 
governed by an indenture or other document, and the Special Purpose 
Subsidiary will apply both the Equity Contribution and the proceeds 
from the sale of Preferred Securities to purchase Notes of such 
Operating Company. Alternatively, each Operating Company may enter into 
a loan agreement or agreements with its Special Purpose Subsidiary 
under which it will loan to the Operating Company (``Loans'') both the 
Equity Contribution and the proceeds from the sale of the Preferred 
Securities evidenced by Notes. Each Operating Company may also 
guarantee (``Guaranties'') the payment of dividends or distributions on 
the Preferred Securities, payments to the Preferred Securities holders 
of amounts due upon liquidation or redemption of the Preferred 
Securities and certain additional amounts that may be payable regarding 
the Preferred Securities.
    Each Note will have a term, including extensions, of up to 50 
years. Prior to maturity, each Operating Company will pay only interest 
on its Notes at a rate equal to the dividend or distribution rate on 
the related series of Preferred Securities. The dividend or 
distribution rate may be either fixed or adjustable, determined on a 
periodic basis by auction or remarketing procedures, in accordance with 
a formula or formulae based upon certain reference rates, or by other 
predetermined methods. Such interest payments will constitute each 
Special Purpose Subsidiary's only income and will be used by it to pay 
monthly dividends or distributions on the Preferred Securities issued 
by it and dividends or distributions on the common stock or the general 
partnership interests of such Special Purpose Subsidiary.
    Dividend payments or distributions on the Preferred Securities will 
be made monthly, will be cumulative and must be made to the extent that 
funds are legally available. However, each Operating Company will have 
the right to defer payment of interest on its Notes for up to five 
years, provided that if dividends or distributions on the Preferred 
Securities of any series are not paid for up to 18 consecutive months, 
then the holders of the Preferred Securities of such series may have 
the right to appoint a trustee, special general partner or other 
special representative to enforce the Special Purpose Subsidiary's 
rights under the related Note and Guaranty. Each Special Purpose 
Subsidiary will have the parallel right to defer dividend payments or 
distributions on the related series of Preferred Securities for up to 
five years. The dividend or distribution rates, payment dates, 
redemption and other similar provisions of each series of Preferred 
Securities will be substantially identical to the interest rates, 
payment dates, redemption and other provisions of the related Note 
issued by the Operating Company.
    The Notes and related Guaranties of each Operating Company will be 
subordinate to all other existing and future indebtedness for borrowed 
money of such Operating Company and will have no cross-default 
provisions with respect to their indebtedness of the Operating Company. 
However, each Operating company may not declare and pay dividends on 
its outstanding preferred or common stock unless all payments due under 
its Notes and Guaranties have been made.
    It is expected that each Operating Company's interest payments on 
the Notes issued by it will be deductible for federal income tax 
purposes and that its Special Purpose Subsidiary will be treated as a 
partnership for federal income tax purposes. Consequently, holders of 
the Preferred Securities will be deemed to have received partnership 
distributions in respect of their dividends or distributions from the 
respective Special Purpose Subsidiary and will not be entitled to any 
``dividends received deduction'' under the Internal Revenue Code.
    The Preferred Securities are optionally redeemable by the Special 
Purpose Subsidiary at a price equal to their par or stated value or 
liquidation preference, plus any accrued and unpaid dividends or 
distributions, at any time after a specified date not later than 10 
years from their date of issuance or upon the occurrence of certain 
events. The Preferred Securities of any series may also be subject to 
mandatory redemption upon the occurrence of certain events. Each 
Operating Company also may have the right in certain cases to exchange 
the Preferred Securities of its Special Purpose Subsidiary for the 
Notes or other junior subordinated debt of the Operating Company.
    In the event that any Special Purpose Subsidiary is required to 
withhold or deduct certain amounts in connection with dividend 
distribution or other payments, it may also have the obligation to 
``gross up'' such payments so that the holders of the Preferred 
Securities will receive the same payment after such withholding or 
deduction as they would have received if no such withholding or 
deduction were required. In such event, the related Operating Company's 
obligations under its Note and Guaranty may also cover such ``gross 
up'' obligation. In addition, if any Special Purpose Subsidiary is 
required to pay taxes on income derived from interest payments on the 
Notes, the related Operating Company may be required to pay additional 
interest equal to the tax payment. Each Operating Company, 
individually, expects to apply the net proceeds of the Loans to the 
repayment of outstanding short-term debt, for construction purposes, 
and for other general corporate purposes, including the redemption or 
other retirement of outstanding senior securities.

Columbus Southern Power Co, et al. (70-8463)

    Columbus Southern Power Co. (``Columbus''), 215 North Front Street, 
Columbus, Ohio 43215, an electric utility subsidiary company of 
American Electric Power Co., Inc., a registered holding company, and 
Simco, Inc. (``Simco''), 215 North Front Street, Columbus, Ohio 43215, 
a non-utility subsidiary company of Columbus, have filed a declaration 
under Section 12(c) of the Act and Rule 42 thereunder.
    Columbus and Simco request an authorization for Simco to return 
excess capital to Columbus through a declaration of dividends on its 
common shares of stock out of paid-in capital surplus to be paid on a 
periodic basis until the amount of dividends equals $500,000.
    In an order dated June 5, 1987 (HCAR No. 24405), the Commission 
authorized Columbus to acquire a note from Peabody Coal Company 
(``Peabody'') in connection with the sale of real property and fixed 
assets to Peabody. In consequence of this transaction, the coal mining 
activities of Simco were transferred and almost all of its business 
operations were discontinued.
    In an order dated October 19, 1990 (HCAR No. 25174), the Commission 
authorized Simco to reduce the par value of its authorized shares of 
common stock to $0.10 per share, to reduce the stated capital of its 
common stock from $9,000,000 to $9,000, and to declare and pay to 
Columbus dividends out of paid-in capital up to $4.5 million.
    Simco is a party to a May 1, 1991 agreement with Conesville Coal 
Preparation Co. (``Conesville''), a non-utility subsidiary company of 
Columbus. Under the agreement, Conesville has a non-exclusive right to 
the use of a coal conveyor beltline, through January 1, 2017, in 
exchange for a usage charge currently in the amount of approximately 
$38,000 per month.
    In consequence of the above-described transactions and the 
cessation of all other business by Simco, Simco has cash in excess of 
its foreseeable capital requirements. Simco currently has 90,000 shares 
of common stock, par value $.10 per share. On June 30, 1994, Simco had 
retained earnings of $111,338, paid-in capital of $740,000, a stated 
capital of $9,000, and cash and temporary investments of $355,479.
    Monthly usage charges under the agreement will continue for 
approximately twenty-two years. This amount together with the current 
capital of Simco is far in excess of foreseeable capital needs. 
Therefore, it is proposed that excess capital in an amount not to 
exceed $500,000 be distributed to Columbus.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-24171 Filed 9-29-94; 8:45 am]
BILLING CODE 8010-01-M