[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Notices]
[Pages 6242-6243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3007]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26822]


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

February 2, 1998.
    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 February 20, 1998, 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.

Ameren Corporation, et al. (70-9133)

    Ameren Corporation (``Ameren''), a recently formed public utility 
holding company that will register under the Act, its service company, 
Ameren Services Company (``AMS''), a public utility subsidiary, Union 
Electric Company (``UE''), and its subsidiary, Union Electric 
Development Company (``UEDC''), each of which is located at 1901 
Chouteau Avenue, St. Louis, Missouri 63103; a second public utility 
company, Central Illinois Public Service Company (``CIPS'') and CIPSCO 
Investment Company (``CIC''), each located at 607 East Adams, 
Springfield, Illinois 62739; and a third public utility company, 
Electric Energy Incorporated (``EEI''), 2100 Portland Road, Joppa, 
Illinois 62953, (``Applicants'') have filed an application-declaration 
under sections 6(a), 7, 9(a), 10, 12(b) and 12(c) of the Act and rules 
42, 43, 45 and 54 thereunder.
    By order dated December 30, 1997 (HCAR No. 26809), the Commission 
authorized Ameren, under section 9(a)(2) of the Act to acquire all of 
the outstanding securities of CIPS and UE, and related transactions. 
(``Merger Order''). After consummation of the merger transactions, 
Ameren will register as a holding company under the Act. UE, CIPS and 
EEI are hereafter referred to collectively as ``Utility Subsidiaries.'' 
AMS, UEDC and CIC are hereafter referred to collectively as ``Non-
Utility Subsidiaries.'' Non-Utility Subsidiaries together with Utility 
Subsidiaries are ``Subsidiaries.''
    As described more fully below, the Applicants seek authority, 
through January 31, 2003 (``Authorization Period''), for: (1) Ameren to 
issue common stock, debt, and other securities; (2) the Utility 
Subsidiaries to issue capital stock and debt securities, including 
short-term debt, and interest rate swaps; (3) intrasystem financing 
among Ameren and its Non-Utility Subsidiaries, including the ability to 
issue guarantees; and (4) the Subsidiaries to alter their capital 
stock.
    The following general terms will be applicable to the financing 
transactions for which authority is sought: (1) The effective cost of 
money on short-term debt financings and credit lines may not exceed 300 
basis points over the six-month London Interbank Offered Rate; (2) the 
effective cost of money on preferred stock and other fixed income 
oriented securities, when issued, may not exceed 500 basis points over 
the interest rate on 30-year U.S. Treasury securities; and (3) issuance 
expenses in connection with any non-competitive offerings of 
securities, including any underwriting fees, commission or other 
similar compensation, will not exceed 5% of the principal or total 
amount of the securities being issued. Ameren represents that at all 
times during the Authorization Period its common equity will be at 
least 30% of its consolidated capitalization.
    The proceeds from the financings will be used for general and 
corporate purposes, including: (1) Capital expenditures of Ameren or 
its Subsidiaries; (2) the repayment, redemption, refunding or purchase 
of debt and capital stock of Ameren or its Subsidiaries without the 
need for prior Commission approval; (3) working capital requirements 
and capital spending of the Ameren system; and (4) other lawful general 
purposes.

1. Ameren External Financings

    Ameren may obtain funds externally through sales of common stock 
and/or debt financing, including commercial paper sales.
a. Common Stock
    In the Merger Order, the Commission authorized Ameren to issue 
137,215,462 shares of common stock in exchange for all outstanding 
shares of UE and CIPSCO. In addition, Ameren was authorized to issue 
and/or acquire up to 15 million shares of Ameren common stock in open 
market transactions over the period ending December 30, 2003, for 
purposes of Ameren's proposed benefit and dividend reinvestment plan 
and certain employee benefit plans of UE, CIPS and Ameren Services that 
will use Ameren common stock.
    Ameren requests authority to issue up to 15 million additional 
shares of Ameren common stock for general corporate purposes other than 
for use in the DRIP or the benefit plans described in the Merger Order.
    Common stock financing may be issued and sold pursuant to 
underwriting agreements of a type generally standard in the industry. 
Public distributions may be made pursuant to private negotiation with 
underwriters, dealers or agents or effected through competitive bidding 
among underwriters. In addition, sales may be made through private 
placements or other nonpublic offerings to one or more persons. 
Securities may be sold through underwriters or dealers, through agents, 
directly to a limited number of purchasers (or to trusts established 
for their benefit) and other shareholders through Ameren Stock Plans.
b. Indebtedness
    Ameren proposes, through the Authorization Period, to issue 
commercial paper and/or other short-term debt aggregating not more than 
$300 million outstanding at any one time to be used for general 
corporate purposes.
    Ameren may sell commercial paper, from time to time, in established 
domestic paper markets. Such commercial paper would be sold to dealers 
at the discount rate per annum prevailing at the date of issuance from 
commercial paper of comparable quality and maturities sold to 
commercial paper dealers generally. It is expected that the dealers 
acquiring commercial paper from Ameren will reoffer such paper at a 
discount to corporate, institutional investors such as commercial 
banks, insurance companies, pension funds,

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investment trusts foundations, colleges and universities, finance 
companies and nonfinancial corporations.
    Ameren proposes to establish back-up bank lines in an aggregate 
principal amount not to exceed the amount of authorized commercial 
paper. In addition, Ameren may enter into credit agreements or other 
borrowing facilities with commercial banks, trust companies or other 
lenders providing for revolving credit or term loans during commitment 
periods not longer than the Authorization Period. The proceeds of such 
borrowings will be used for general corporate purposes.

2. Utility Subsidiary External Financings

    The Utility Subsidiaries request authorization to engage in certain 
external financings which are outside the scope of the rule 52 
exemption for financings of utility companies and for interest rate 
swaps.
a. Commercial Paper
    The Utility Subsidiaries propose to issue commercial paper, through 
the Authorization Period, up to the following aggregate amounts: UE--
$575 million; CIPS--$125 million; and EEI--$60 million.
    The Utility Subsidiaries may maintain back-up lines of credit in an 
aggregate principal amount not to exceed the amount of authorized 
commercial paper. Borrowings pursuant to commercial paper and related 
credit lines will not exceed $575 million for UE, $125 million for CIPS 
or $60 million for EEI to be outstanding at any one time.
b. Credit Lines
    The Utility Subsidiaries propose to establish credit lines and 
issue notes, through the Authorization Period, up to the aggregate 
amounts of $425 million for UE, $125 million for CIPS, and $35 million 
for EEI. Proceeds from these borrowings will be used for general 
corporate purposes in addition to credit lines to support commercial 
paper as described in subsection (a) above.
c. Interest Rate Swaps
    The Utility Subsidiaries propose to enter into, perform, purchase 
and sell financial instruments intended to manage the volatility of 
interest rates, including but not limited to interest rate swaps, caps, 
floors, collars and forward agreements or any other similar agreements 
to the extent the same are not exempt under rule 52. Each Utility 
Subsidiary may employ interest rate swaps as a means of managing risk 
associated with any of its issued outstanding debt.
    The Utility Subsidiaries request authorization to make and continue 
use of financial hedging instruments in connection with natural gas 
procurement and other utility operations. The Utility Subsidiaries will 
not engage in speculative transactions.

3. Intrasystem Financings for Non-Utility Subsidiaries

a. Guarantees
    Ameren proposes to obtain letters of credits, enter into expense 
agreements or otherwise provide credit support with respect to the 
obligations of its Non-Utility Subsidiaries as may be appropriate to 
enable such system companies to carry on in the ordinary course of 
their respective businesses, in an aggregate principal amount not to 
exceed $300 million outstanding at any one time. Such credit support 
may be in the form of committed bank lines of credit.
    In addition, authority is requested for the Non-Utility 
Subsidiaries to enter into arrangements with each other similar to that 
described with respect to Ameren above, in an aggregate principal 
amount not to exceed $50 million outstanding at any one time, except to 
the extent that the same are exempt pursuant to rule 45.

4. Changes in Capital Stock of Subsidiaries

    The portion of an individual Subsidiary's aggregate financing to be 
affected through the sale of stock to Ameren or other immediate parent 
company during the Authorization Period cannot be ascertained at this 
time. It may happen that the proposed sale of capital stock may in some 
cases exceed the then authorized capital stock of such Subsidiary. In 
addition, the Subsidiary may choose to use other forms of capital 
stock. As needed to accommodate the proposed transactions and to 
provide for future issues, request is made for authority to increase 
the amount or change the terms of any such Subsidiary's authorized 
capital stock capitalization by an amount deemed appropriate by Ameren 
or other immediate parent company in the instant case. A Subsidiary 
would be able to change the par value, or change between par and no-par 
stock, without additional Commission approval.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-3007 Filed 2-5-98; 8:45 am]
BILLING CODE 8010-01-M