[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]
[[Page 44733]]
=======================================================================
-----------------------------------------------------------------------
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
[[Page 44734]]
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
[[Page 44735]]
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.
---------------------------------------------------------------------------
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