[Federal Register Volume 62, Number 163 (Friday, August 22, 1997)]
[Notices]
[Pages 44733-44735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22292]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26756]


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

August 15, 1997.
    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 September 8, 1997, 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.

Cinergy Corporation (70-9071)

    Cinergy Corporation (``Cinergy''), a registered holding company, 
139 East Fourth Street, Cincinnati, Ohio 45202, has filed a declaration 
under sections 6(a), 7, 12(b), 32 and 33 and rules 45 and 53 under the 
Act.
    Cinergy proposes to issue and sell from time to time through 
December 31, 2002, upon the terms and conditions described below: (1) 
short-term notes and commercial paper in an aggregate principal amount 
not to exceed, together with the then-outstanding principal amount of 
certain other securities issued by Cinergy as described below, $2 
billion at any time outstanding; and (2) up to 30 million additional 
shares of Cinergy common stock, plus certain other shares of common 
stock authorized, but not issued, under a prior Commission order, 
discussed below. All Cinergy common stock authorized in this matter may 
be adjusted to reflect subsequent stock splits.
    By orders dated January 11, 1995 and March 12, 1996 (HCAR Nos. 
26215 and 26488, respectively) (``Orders''), the Commission authorized 
Cinergy to issue and sell from time to time through December 31, 1999 
short-term notes (including in connection with letter of credit 
transactions) and commercial paper in an aggregate principal amount at 
any time outstanding not to exceed $1 billion. The Commission 
authorized Cinergy to apply the net proceeds to various corporate 
purposes including investments in exempt wholesale generators 
(``EWGs'') and foreign utility companies (``FUCOs''), as those terms 
are defined respectively in sections 32 and 33 of the Act, together 
with indirect investments through one or more special-purpose 
subsidiaries (``Project Parents'' and, together with EWGs and FUCOs, 
``Exempt Entities''), provided that Cinergy's ``aggregate investment'' 
did not exceed 50% of Cinergy's ``consolidated retained earnings,'' 
each as defined in rule 53(a)(1) under the Act (``50% Investment 
Limitation''). At May 31, 1997 Cinergy had issued and outstanding a 
total of $524 million in short-term notes and commercial paper, 
consisting entirely of notes evidencing short-term bank loans. Cinergy 
proposes that the Orders be superseded by the proposed transactions 
effective immediately upon the date of the Commission's order in this 
filing.
    By order dated May 30, 1997 (HCAR No. 26723) (``May Order''), the 
Commission, among other things, authorized Cinergy from time to time 
through December 31, 2002, subject to the $1 billion debt limitation 
prescribed in the Orders, to guarantee the debt or other obligations of 
various existing subsidiaries and of companies whose securities Cinergy 
or any of its subsidiaries acquires under rule 58 under the Act. At 
July 1, 1997, Cinergy had issued $5 million in guarantees under the May 
Order.
    By order dated November 18, 1994 (HCAR No. 26159) (``November 
Order''), the Commission authorized Cinergy to issue and sell up to 
eight million shares of its common stock, $.01 par value per share 
(``Common Stock''), from time to time through December 31, 1995: (1) 
Through solicitation of proposals from underwriters or dealers; (2) 
through underwriters or dealers on a negotiated basis; (3) directly to 
a limited number of purchasers or to a single purchaser; and/or (4) 
through agents on a negotiated basis. Under the November Order, on 
December 19, 1994 Cinergy publicly issued and sold 7.089 million shares 
of Common Stock and contributed the net proceeds thereof to the equity 
capital of Cinergy's utility subsidiary, PSI Energy, Inc. By 
supplemental order dated February 23, 1996 (HCAR No. 26477) (``February 
Order''), the Commission authorized Cinergy to issue and sell the 
remaining shares of Common Stock (``Remaining Shares''). In addition, 
Cinergy was authorized to issue some or all of the Remaining Shares to 
Cinergy system employees, including officer employees, as awards. The 
February Order authorized Cinergy to apply the proceeds from the sales 
of the Remaining Shares to various corporate purposes including 
investments in EWGs and FUCOs, subject to the 50% Investment 
Limitation. Of the eight million shares originally authorized for 
issuance under the November Order, there was a balance of 867,385 
Remaining Shares at July 1, 1997.
    Cinergy has pending a proposal docketed in S.E.C. File No. 70-8993 
(HCAR No. 26714; May 2, 1997) to issue and sell from time to time 
through December 31, 2002 unsecured debt securities in one or more 
series bearing maturities from two to 40 years (``Debentures'') in an 
aggregate principal amount not to exceed $400 million at any time 
outstanding, subject to the $1 billion debt limitation contained in the 
Orders. Net proceeds from the issue and sale of the Debentures would be 
applied to refinance short-term debt incurred by Cinergy to finance its 
1996 acquisition of a 50% ownership interest in Midlands Electricity 
plc, a U.K. FUCO, and to refinance outstanding Debentures.
    Cinergy also has pending a proposal docketed in S.E.C. File No. 70-
9011 (HCAR No. 26698; March 28, 1997 (``100% Application'') under which 
Cinergy seeks to apply the net proceeds of certain financing 
transactions consisting of those authorized in the May Order, the 
February Order and the Orders (to be superseded, as to the February 
Order and the Orders upon issuance of the Commission's order in the 
instant matter) to investments in Exempt Entities, provided that 
Cinergy's ``aggregate investment'' will not exceed 100% of Cinergy's 
``consolidated retained earnings.''
    Regarding the short-term notes, Cinergy proposes to make short-term 
borrowings from banks or other lending institutions from time to time 
through December 31, 2002, provided that the aggregate principal amount 
of such borrowings, together with the aggregate amount of any 
outstanding commercial paper, short-term notes in connection with 
letter of credit transactions, guarantees pursuant to the May Order and 
Debentures issued or sold by

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Cinergy, will not exceed $2 billion at any time outstanding (``Debt 
Cap'').
    The borrowings will be evidenced by: (1) Transactional promissory 
notes to be dated the date of the borrowings and maturing in not more 
than one year; (2) grid promissory notes evidencing all outstanding 
borrowings, dated as of the date of the first borrowing, with each 
borrowing maturing in not more than one year. Any note may or may not 
be prepayable, in whole or in part, with or without a premium in the 
event of prepayment. The amount of any premium payable by Cinergy would 
not exceed an amount equivalent to the present value of the stated 
interest payable on the note in the event the note had not been 
prepaid, plus accrued interest to the date of prepayment. Borrowings 
will be priced at the lender's prevailing rate offered to corporate 
borrowers of similar credit quality, which will not exceed the greater 
of: (1) The London Interbank Offered Rate plus 200 basis points; or (2) 
a negotiated rate which would not exceed the lender's prime rate plus 
200 basis points. Cinergy may pay commitment fees based upon the unused 
portion of a lender's commitment. The fees would not exceed the amount 
determined by multiplying the unused portion of the lender's commitment 
by 3/4 of 1%.
    In addition to the borrowings, Cinergy requests authority to issue 
short-term notes, with maturities of no more than one year, in 
connection with letter of credit transactions providing credit support 
for Cinergy subsidiary companies other than Exempt Entities. In such a 
transaction, Cinergy expects to issue an unsecured demand promissory 
note to the letter of credit bank evidencing Cinergy's reimbursement 
obligation for drawings under the letter of credit. Each letter of 
credit would have a stated expiration date not later than one year from 
the date of issuance. Cinergy would be required to repay on demand 
amounts drawn under the letter of credit. Interest on unreimbursed 
amounts would accrue at an annual rate not to exceed the prime rate 
offered by the letter of credit bank plus 400 basis points. Cinergy may 
also be required to pay fees aggregating not more than 1% of the face 
amount of the letter of credit.
    Cinergy proposes from time to time through December 31, 2002 to 
issue and sell commercial paper to one or more dealers, or directly to 
financial institutions if the resulting cost of money is equal to or 
less than that available from dealer-placed commercial paper, in an 
aggregate principal amount, which, together with the aggregate amount 
of any outstanding short-term notes, guarantees pursuant to the May 
Order and Debentures issued or sold by Cinergy, will not exceed the 
Debt Cap.
    Cinergy proposes to issue and sell the commercial paper at market 
rates with varying maturities not to exceed 270 days. The commercial 
paper will be in the form of book-entry unsecured promissory notes with 
varying denominations of not less than $25,000 each. Any associated 
fees will not exceed \1/10\ of 1% multiplied by the principal amount of 
the commercial paper. In commercial paper sales effected on a discount 
basis, there will be no commission or fee. However, the purchasing 
dealer will re-offer the commercial paper at a rate less than the rate 
to Cinergy. The discount rate to dealers will not exceed the maximum 
discount rate per annum prevailing at the date of issuance for 
commercial paper of comparable quality and the same maturity. The 
purchasing dealer will re-offer the commercial paper in such a manner 
as not to constitute a public offering within the meaning of the 
Securities Act of 1993.
    In connection with the proposed issuance and sale of short-term 
notes to banks and other lending institutions and sales of commercial 
paper, Cinergy proposes to mitigate interest rate risk through the use 
of various interest rate management instruments commonly used in 
today's capital markets, such as interest rate swaps, caps, collars, 
floors, options, forwards, futures and similar products designed to 
manage and minimize interest costs. Cinergy expects to enter into these 
agreements with counterparties that are highly rated financial 
institutions. The transactions will be for fixed periods and stated 
notional amounts. Fees, commissions and annual margins in connection 
with any interest rate management agreements will not exceed 100 basis 
points in respect of the principal or notional amount of the related 
short-term notes/commercial paper or interest rate management 
agreement. In addition, with respect to options, Cinergy may pay an 
option fee which would not exceed 10% of the principal amount of the 
short-term note or commercial paper covered by the option.
    Finally, Cinergy proposes to issue and sell from time to time 
through December 31, 2002: (1) Up to 30 million additional shares of 
Common Stock and (2) the Remaining Shares (collectively, including any 
adjustments pursuant to subsequent stock splits, the ``Additional 
Shares''). At May 31, 1997, Cinergy had a total of 600 million shares 
of Common Stock authorized for issuance, of which 157,679,129 were 
issued and outstanding. Cinergy proposes to issue and sell the 
Additional Shares from time to time employing any one or more of the 
following modes: (1) Through solicitations of proposals from 
underwriters or dealers; (2) through negotiated transactions with 
underwriters or dealers; (3) directly to a limited number of purchasers 
or to a single purchaser; and (4) through agents. The price applicable 
to Additional Shares sold in any such transaction will be based on 
several factors, including in particular the current market price of 
the Common Stock and capital market conditions in general at the time. 
Total fees and expenses incurred by Cinergy in connection with the 
issuance and sale of the Additional Shares will not exceed 5% of the 
total proceeds from the sale of the Additional Shares. In addition, 
Cinergy requests authority to issue up to 250,000 of the Additional 
Shares to Cinergy system employees, including officers, in gift or 
award transactions from time to time through December 31, 2002.
    Cinergy proposes to apply net proceeds from the issue and sale of 
the short-term notes, commercial paper and Additional Shares to 
investments in other Cinergy system companies, to exempt acquisitions 
of securities of energy-related companies pursuant to rule 58, to 
repay, repurchase or refinance outstanding securities of Cinergy, to 
make loans to participating companies in the Cinergy system money pool, 
to investments in Exempt Entities, subject to the 50% Investment 
Limitation pending receipt of the authorization requested in the 100% 
Application, and to other lawful corporate purposes.

American Electric Power Company, Inc., et al. (70-9077)

    American Electric Power Company, Inc. (``AEP''), a registered 
holding company, and AEP Resources, Inc. (``Resources''), its wholly 
owned nonutility subsidiary company, each of 1 Riverside Plaza, 
Columbus, Ohio 43215, have filed a declaration under section 12(c) of 
the Act and rules 46 and 54 under the Act.
    By order dated December 22, 1994 (HCAR No. 26200), AEP was 
authorized through December 31, 2000, among other things, to form 
direct and indirect special purpose subsidiaries (``Project Parents'') 
to acquire and own or operate ``exempt wholesale generators'' and 
``foreign utility companies'' (``FUCOs''), as defined in sections 32 
and 33 of the Act, respectively.
    Applicants propose that their Project Parents declare and pay 
dividends to

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their parent companies from time to time through December 31, 2002 out 
of capital or earned surplus to the extent permitted under applicable 
corporate law. AEP and Resources request this authorization on behalf 
of: (i) Certain existing Project Parents formed in connection with 
AEP's 1997 acquisition of a 50% ownership interest in Yorkshire 
Electricity Group plc, a U.K. regional electricity company and a FUCO 
(``Yorkshire'');\1\ (ii) those Project Parents formed in connection 
with AEP's 1996 acquisition of a 70% ownership interest in Nanyang 
General Light Electric Co., Ltd. (``Nanyang''), a cooperative joint 
venture company formed under the laws of the People's Republic of 
China, established to own, construct, finance and operate a coal-fired 
electric generating station in Nanyang, Henan Province, China; and 
(iii) other existing and all future Project Parents formed after the 
date of the issuance of an order authorizing this proposal 
(collectively, ``Applicable Project Parents''). Resources states that 
it would pay any such dividend only to the extent that the dividend is 
based upon: (i) A corresponding dividend or dividends our of capital or 
unearned surplus from an Applicable Project Parent that is a direct 
subsidiary of Resources or (ii) otherwise is based upon Resources' 
direct or indirect ownership of an Exempt Project.

    \1\ Namely, Yorkshire Power Group Limited (``Yorkshire Power 
Group''), a U.K. company in which Resources and a subsidiary of 
Public Service Company of Colorado have respective 50% ownership 
interests, and Yorkshire Holdings plc, the actual owner of Yorkshire 
and a wholly owned subsidiary of Yorkshire Power Group.
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    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-22292 Filed 8-21-97; 8:45 am]
BILLING CODE 8010-01-M