[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Notices]
[Pages 65619-65621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31618]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26618]


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

December 6, 1996.
    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 December 30, 1996, 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.

Eastern Utilities Associates, et al. (70-8955)

    Eastern Utilities Associates (``EUA''), P.O. Box 2333, Boston, 
Massachusetts 02107, a registered holding company, and its 
subsidiaries, Blackstone Valley Electric Company (``Blackstone''), 
Washington Highway, Lincoln, Rhode Island 02865, Eastern Edison Company 
(``Eastern''), 110 Mulberry Street, Brockton, Massachusetts 02403, 
Montaup Electric Company (``Montaup''), P.O. Box 2333, Boston, 
Massachusetts 02107, and Newport Electric Corporation (``Newport''), 12 
Turner Road, Middleton, Rhode Island 02840 (collectively, 
``Declarants'') have filed a declaration (``Declaration'') under 
sections 6(a) and 7 of the Act and rule 54 thereunder.
    Declarants propose to enter into a revolving credit facility 
(``Facility'') from which they and certain other EUA subsidiaries will 
be permitted to borrow from time to time, from one or more commercial 
banks or other lending institutions (``Lenders'') up to $150 million in 
the aggregate through a period ending five years after the closing date 
of the agreement.\1\ Borrowings may take the form of: (i) borrowings 
from all Lenders under the Facility on a pro rata basis (``Pro Rata 
Borrowings''); (ii) borrowings of at least $100,000 each and up to $20 
million in the aggregate (``Swing Line Borrowings'') from a particular 
Lender (``Swing Line Lender''); and (iii) short-term borrowings for a 
period from seven days to 180 days from Lenders on a competitive bid 
basis (``Competitive Bid Borrowings''). All borrowings under the 
Facility will be unsecured and will be evidenced by promissory notes.
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    \1\ The other subsidiaries, EUA Cogenex Corporation 
(``Cogenex''), EUA Ocean State Corporation (``Ocean State''), EUA 
Service Corporation (``ESC''), EUA Energy Investment Corporation 
(``EEIC''), and EUA Energy Services, Inc. (``EUA Energy'') 
(collectively, ``Affiliates''), intend to finance authorized 
activities through the Facility. The Affiliates have not joined the 
Declaration as parties, however, because such financing is exempt 
from prior approval pursuant to rules 45 and 52.
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    The following Declarants and Affiliates will have the following 
respective maximum borrowing limits under the Facility: Ocean State and 
ESC, $10 million each; and Cogenex, $75 million. EUA, Blackstone, 
Eastern,

[[Page 65620]]

Montaup and Newport will have unrestricted access to the Facility. 
Access to the Facility will be limited for a Declarant or an Affiliate 
other than Cogenex if such Declarant or Affiliate reduces its operating 
income by more than 20% as a result of selling an income-generating 
asset, and will be eliminated for a Declarant or an Affiliate other 
than Cogenex if such Declarant or Affiliate reduces its operating 
income by more than 50% as a result of selling an income-generating 
asset.
    EUA states that, for the funding of short-term loans to Cogenex, 
EUA shall limit its borrowings under the Facility up to $25 million in 
the aggregate, the amount currently authorized in an order dated April 
5, 1995 (HCAR No. 26266) (``Cogenex Order''). The terms and conditions 
of any loans made to Cogenex would be the same as the terms and 
conditions under the Facility. EUA further agrees that with the 
exception of the borrowings described in the first sentence of this 
paragraph (i.e., up to $25 million in the aggregate), EUA would not use 
any of its proposed borrowings under the Facility to invest in Cogenex.
    Declarants will pay interest on any Pro Rata Borrowings, at the 
borrower's election, at a rate which is: (i) the greater of the Bank of 
New York's prime commercial lending rate or the federal funds rate plus 
\1/2\% (``Alternative Base Rate''); or (ii) the London Interbank 
Offering Rate (``LIBOR`') for the applicable interest period, plus a 
margin of at least 0.15% and up to 0.45%, which margin rate shall be 
based upon the then current bond ratings of Eastern's First mortgage 
bonds (``LIBOR Rate'').
    Declarants will pay interest on any Swing Line Borrowings at a rate 
or rate's to be determined by the borrower and the Swing Line Lender. 
Swing Line Borrowings in excess of $2.5 million in the aggregate could 
be converted, at the borrower's option, to Competitive Bid Borrowings 
or Pro Rata Borrowings. Swing Line Borrowings in excess of $20 million 
in the aggregate will be converted to Pro Rata Borrowings which would 
initially bear interest at the Alternate Base Rate. Upon the occurrence 
of an event of default by the borrower, or at the request of the Swing 
Line Lender, all outstanding Swing Line Borrowings could be replaced by 
and refinanced using the proceeds from Pro Rata Borrowings.
    Declarants will pay interest on any Competitive Bid Borrowings at a 
rate or rates determined by competitive bid auction or auctions among 
the Lenders. If a Declarant so elects, the competitive bid auction 
agent will notify all of the Lenders of a requested loan amount, the 
date the loan will begin and the interest period for such loan, and 
will request that each Lender provide a quote for such loan. The 
Declarant may then choose to accept or reject any quotes it receives.
    Interest calculations would be made on the basis of a 360-day year 
for the actual number of days elapsed except with respect to interest 
accruing at the Bank of New York's prime commercial lending rate, in 
which case interest would be calculated on the basis of a 365 or 366 
day year for the actual number of days elapsed.
    Any payment of principal and/or interest which is not paid when due 
would bear interest, to the extent permitted under applicable law, at a 
rate per annum equal to the interest rate otherwise applicable plus two 
percent.
    Declarants will pay to the administrative agent for the Facility, 
for the pro rata account of the Lenders, an annual facility fee to be 
based upon the average daily amount of the Facility regardless of 
usage. The fee to be paid by the Declarants will be at least 0.10% and 
up to 0.30% of the average daily amount of the Facility, such 
percentage to be determined in accordance with the then current bond 
ratings of Eastern's first mortgage bonds. The administrative agent 
under the Facility will be a commercial bank, initially the Bank of New 
York, which will be paid a one-time agency fee of $50,000. An 
administrative fee of $7,500 will be paid to the administrative agent 
at closing and on each subsequent anniversary of the closing during the 
term of the Facility. Additionally, with respect to Competitive Bid 
Borrowings only, in the event that one or more Declarants request(s) a 
competitive bid, such Declarant(s) collectively will pay a $200 fee to 
the administrative agent in connection with such request.
    Borrowings under the Facility will replace borrowings authorized by 
the Commission pursuant to order dated December 19, 1995 (HCAR Nos. 
26433) (which authorized short-term financing for Eastern, Montaup, 
Blackstone, Newport, ESC, and Ocean State). Upon issuance of an order 
authorizing the transactions proposed in the instant Declaration, the 
authorization granted pursuant to HCAR No. 26433 (Dec. 19, 1995) will 
be replaced in its entirety and will cease to have effect. In addition, 
as a result of replacing EUA's ``regular bank lines of credit,'' the 
Facility will become the source of borrowings by EUA: (i) for the 
financing of EEIC and borrowings authorized pursuant to HCAR Nos. 
24515A and 26028 (Dec. 4, 1987, as amended Jan. 11, 1988, and Apr. 15, 
1994, respectively); (ii) authorized in connection with investments by 
EUA in EUA Energy, authorized by HCAR No. 26493 (Mar. 14, 1996), as 
subsequently amended; and (iii) for the financing of Cogenex authorized 
pursuant to the Cogenex Order. The Commission orders issued in 
connection with the financing of EEIC (HCAR Nos. 24515A and 26028) and 
investment in EUA Energy (HCAR No. 26493) will remain in full force and 
effect, as presently written.
    The authorization granted by the Cogenex Order will be replaced in 
its entirety and will cease to have effect upon the issuance of the 
Commission's order authorizing the transactions proposed in the 
Declaration; provided, that the Commission's order authorizing the 
transactions proposed in the Declaration shall include authorization 
for the following transactions previously authorized by the Cogenex 
Order:
    (a) EUA proposes to invest in Cogenex up to an aggregate principal 
amount of $50 million in one or any combination of short-term loans, 
capital contributions, or purchases of Cogenex common stock.
    (b) Cogenex proposes to obtain financing in an aggregate principal 
amount not to exceed $200 million from any of the following sources: 
(i) up to $50 million from EUA, as described in (a) above, and (ii) 
$150 million from one or any combination of (A) the issuance and sale 
of unsecured notes (``New Notes'') through a private or a public 
offering, (B) the borrowing of proceeds from the issuance or sale of 
bonds by a state or political subdivision agency (``Bonds''), and (C) 
the borrowing of up to $75 million under the Facility. Should it become 
necessary to secure more favorable terms for the New Notes or Bonds, 
EUA proposes to guarantee, or provide an equity maintenance agreement 
for all or a portion of the obligations of Cogenex on the New Notes and 
Bonds. EUA and Cogenex request that the Commission reserve jurisdiction 
over the issuance and sale of the New Notes and Bonds and EUA's 
guarantee of or provision of an equity maintenance agreement for the 
New Notes and Bonds pending completion of the record.
    (c) Cogenex proposes to extend its authority to invest in Northeast 
Energy Management, Inc. (``NEM'') and EUA Cogenex-Canada, Inc. 
(``Cogenex-Canada''), two wholly-owned non-utility subsidiaries of 
Cogenex, and their authority to borrow funds, with no increase in the 
amount of authorized funding. By Commission order dated January 28, 
1994 (HCAR No. 25982), the Commission authorized Cogenex to

[[Page 65621]]

invest in NEM, and NEM to borrow from Cogenex, up to an aggregate $9.1 
million. By Commission order dated September 30, 1994 (HCAR No. 26135), 
the Commission authorized Cogenex to provide equity and debt funding 
for Cogenex-Canada and for Cogenex-Canada to borrow from third parties 
in amounts not to aggregate more than $20 million outstanding. These 
authorizations were extended from December 31, 1995 through December 
31, 1997 by the Cogenex Order.
    The Facility will be used: (i) to pay, reduce or renew outstanding 
notes payable to banks as they become due; (ii) to finance the 
Declarants' respective cash construction expenditures for fiscal years 
1996 through 2000; (iii) to provide funds to meet certain sinking fund 
requirements and retirements or redemptions of outstanding securities; 
(iv) in the case of EUA, to make short-term loans, capital 
contributions and open account advances in accordance with rule 
45(b)(4) or rule 52 or as previously authorized by the Commission to 
Cogenex, EEIC and EUA Energy; (v) to pay for the cost of issuance of 
New Notes and Bonds of Cogenex; (vi) to provide for debt servicing 
reserves or expenses in connection with the issuance of New Notes and 
Bonds; (vii) for the Declarants' respective working capital 
requirements; and (viii) for other general corporate purposes.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31618 Filed 12-12-96; 8:45 am]
BILLING CODE 8010-01-M