[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Notices]
[Pages 7017-7019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3421]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26823]


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

February 5, 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 March 2, 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.

Ohio Valley Electric Corporation [70-8527]

    Ohio Valley Electric Corporation (``Ohio Valley''), P.O. Box 468, 
Piketon, Ohio 45661, an electric public utility subsidiary company of 
American Electric Power Company, Inc., a registered holding company, 
has filed a post-effective amendment to its declaration filed under 
sections 6(a) and 7 of the Act and rule 54 under the Act.
    By orders dated December 28, 1994 and December 12, 1996 (HCAR Nos. 
26203 and 26624) (``Existing Authorization''), Ohio Valley was 
authorized to incur short-term debt through the issuance and sale of 
notes (``Notes'') to banks in an aggregate amount not to exceed $25 
million outstanding at any one time, from time to time through December 
31, 2001, provided that no Notes shall mature later than June 30, 2002.
    Ohio Valley now proposes that the Existing Authorization be 
increased to an aggregate amount not to exceed $50 million outstanding 
at any one time.
    The proceeds of the short-term debt incurred by Ohio Valley will be 
added to its general funds and used to pay its general obligations and 
for other corporate purposes.

Entergy Louisiana, Inc. [70-9141]

    Entergy Louisiana, Inc. (``ELI''), 639 Loyola Avenue, New Orleans, 
Louisiana 70113, an electric public-utility subsidiary company of 
Entergy Corporation, a registered holding company, has filed an 
application-declaration under sections 6(a), 7, 9(a), 10 and 12(b) of 
the Act and rules 45 and 54 under the Act.
    ELI proposes to issue and sell up to a combined aggregate principal 
amount of $600 million of first mortgage bonds (``Bonds'') and /or one 
or more series of ELI's debentures under one or more debenture 
indentures or subordinated debenture indentures (``Debentures'') 
through December 31, 2002 (``Authorization Period''). Each series of 
Bonds or Debentures will be sold either by competitive bidding, 
negotiated public offering or private placement. The price, interest 
rate and maturity date will all be determined at the time of sale, or 
upon execution of the agreement to sell.\1\ Each series of Bonds or 
Debentures will mature not later than forty years (Bonds) or fifty 
years (Debentures) from the date of issuance. One or more series of 
Bonds or Debentures may include provisions for redemption or retirement 
prior to maturity, including restrictions on optional redemption for a 
given number of years. In addition, one or more series of Bonds or 
Debentures may include provisions for the mandatory retirement of some 
or all of the series prior to maturity.\2\ Debentures issued under a

[[Page 7018]]

subordinated debenture indenture would be expressly subordinated to 
senior indebtedness of ELI, and may also provide that payments of 
interest may be deferred, without creating a default, for specified 
periods, so long as no dividends are being paid on, or certain actions 
are being taken with respect to the retirement of, ELI's common or 
preferred stock during the deferral period.
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    \1\ The price, exclusive of accrued interest, to be paid to ELI 
for each series of Bonds or Debentures sold at competitive bidding 
will be within a range (to be specified by ELI to prospective 
purchasers) of 95% to 105% of the principal amount of the series.
    No series of Bonds or Debentures will be issued at rates in 
excess of the lower of 15% per annum or those rates generally 
obtainable at the time of pricing for sales of mortgage bonds or 
debentures (as the case may be) having the same or reasonably 
similar maturities, issued by companies of the same or reasonably 
comparable credit quality and having reasonably similar terms, 
conditions and features.
    As to series of Bonds or Debentures having an adjustable 
interest rate, the initial interest rate will be negotiated between 
ELI and the purchasers of the series and will be based on the 
current rate for comparable bonds or debentures. Thereafter, the 
interest rate will be adjusted according to a pre-established 
formula or method of determination (``Floating Rate Bonds'') or 
(``Floating Rate Debentures'') or will be that rate which, when set, 
would be sufficient to remarket the Bonds or Debentures at their 
principal amount (``Remarketed Bonds'') or (``Remarketed 
Debentures'').
    The interest rate for Floating Rate Bonds or Floating Rate 
Debentures after the initial interest rate period may be set as a 
percentage of, or a specified spread from, a benchmark rate, such as 
the London Interbank Offered Rate or the yield to maturity of 
specified United States Treasury securities, and may be established 
by reference to orders received in an auction procedure, and will 
not exceed a specified maximum rate greater than 15% per annum. The 
interest rate may be adjusted at established intervals or may be 
adjusted simultaneously with changes in the benchmark rate.
    The interest rate for Remarketed Bonds or Remarketed Debentures 
after the initial interest rate period will not be greater than 
rates generally obtained at the time of remarketing of bonds or 
debentures having similar maturities, issued by companies of 
comparable credit quality and having reasonably comparable terms, 
and will not exceed a specified maximum rate greater than 15% per 
annum.
    \2\ The terms of Remarketed Bonds or Remarketed Debentures will 
provide that holders have the right to tender or are required to 
tender their Bonds or Debentures and have them purchased at a price 
equal to the principal amount plus accrued and unpaid interest on 
specified dates. A tender agent (``Tender Agent'') may be appointed 
to facilitate the tender of any Bonds or Debentures by holders. ELI 
would be obligated to pay amounts equal to the amounts to be paid to 
the Tender Agent or remarketing agent appointed to reoffer the 
tendered Bonds or Debentures for the purchase of Remarketed Bonds or 
Remarketed Debentures.
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    ELI further proposes to issue and sell one or more new series of 
its preferred stock of either $25 par value (``$25 Preferred'') or $100 
par value (``$100 Preferred'') (collectively, the ``Preferred'') either 
by competitive bidding, negotiated public offering or private placement 
during the Authorization Period. The aggregate amount of Preferred to 
be issued, when combined with the Entity Interests described below, 
will not exceed $260 million. The price, exclusive of accumulated 
dividends, for each series of Preferred will be determined at the time 
of sale and will not be less than par on a per share basis. With 
respect to any series of Preferred to be sold at competitive bidding 
the price to be paid will not be less than $25 nor more than $25.70 per 
share for $25 Preferred and not less than $100 nor more than $102.75 
per share for $100 Preferred. The terms of one or more series of the 
preferred may include redemption and/or sinking fund provisions.
    ELI proposes to organize either a special purpose limited 
partnership or a statutory business trust (``Issuing Entity'') for the 
sole purpose of issuing Entity interests (``Entity Interests'').\3\ ELI 
will directly or indirectly make an equity contribution to the Issuing 
Entity at the time the Entity Interests are issued and thereby directly 
or indirectly acquire all of the general partnership interests (in the 
case of a partnership) or all of the voting interests (in the case of a 
business trust) in the Issuing Entity. ELI's equity contribution to the 
Issuing Entity will at all times be at least 1% (in the case of a 
limited partnership) or at least 3% (in the case of a business trust) 
of the aggregate equity contributions by all security holders to the 
Issuing Entity.\4\
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    \3\ In the case of a limited partnership, ELI will either (a) 
act as the general partner of the Issuing Entity or (b) organize a 
special purpose, wholly owned corporation for the sole purpose of 
acting as the general partner of the Issuing Entity.
    In the case of a business trust, the business and affairs of the 
trust will be conducted by one or more trustees. Prior to a default, 
ELI would, as a result of its ownership of all the voting interests 
in the Issuing Entity, be entitled to appoint, remove or replace the 
trustee(s).
    \4\ The price, exclusive of accrued distributions, to be paid to 
the Issuing Entity for each series of Entity Interests to be sold at 
competitive bidding will be within a range from 95% to 105% of the 
liquidation amount of the series.
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    ELI proposes to issue one or more series of subordinated debentures 
to the Issuing Entity under a subordinated debenture indenture 
(``Entity Subordinated Debentures''). Each series of Entity 
Subordinated Debentures will mature at a time from their date of 
issuance as ELI may determine at the time of their issuance, but not 
more than fifty years.\5\ Each series of Entity Interests and 
corresponding series of Entity Subordinated Debentures will be sold at 
a price, and will be entitled to receive distributions or interest 
payments on a periodic basis, that will have been determined at the 
time of sale.\6\ One or more of Entity Interests and Entity 
Subordinated Debentures may include provisions for the mandatory 
retirement of some or all of the series prior to maturity. The Entity 
Interests will be subject to redemption, in whole or part after a 
specified date, but not later than five years after the date of 
issuance, at the option of the Issuing Entity, with ELI's consent, at a 
price equal to their stated liquidation preference plus any accrued and 
unpaid distributions.
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    \5\ Prior to maturity, ELI will pay interest only on the Entity 
Subordinated Debentures, at either a fixed or adjustable rate as set 
forth in the Entity subordinated debenture indenture. The 
distribution rates, payment dates, redemption, maturity, and other 
terms applicable to each series of Entity Interests will be 
substantially identical to the interest rates, payment dates, 
redemption, maturity, and other terms applicable to the Entity 
Subordinated Debentures, and will be determined by ELI at the time 
of issuance.
    The interest paid by ELI on the Entity Subordinated Debentures 
will be the only source of income for the Issuing Entity and will be 
used by the Issuing Entity to pay monthly or quarterly distributions 
on the Entity Interests.
    ELI anticipates that its interest payments on the Entity 
Subordinated Debentures will be deductible for federal and state 
income tax purposes and that the Issuing Entity will be treated as 
either a partnership or a trust for federal income tax purposes. 
Consequently, holders of Entity Interests will be deemed to have 
received interest income rather than dividends, and will not be 
entitled to any ``dividends received deduction'' under the Internal 
Revenue Code.
    \6\ The interest rates for the Entity Subordinated Debentures 
will be determined according to the same terms and conditions 
described in footnote 2 above for Bonds and Debentures.
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    ELI also proposes to enter into a guaranty (``Guaranty'') under 
which guarantee the payment of distributions, if and to the extent that 
the Issuing Entity has legally available funds for this purpose, 
liquidation payments and certain ``gross up'' amounts to Equity 
Interests holders. The Entity Subordinated Debentures and the Guaranty 
will be expressly subordinated to the senior indebtedness of ELI.\7\
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    \7\ Because the Entity Interests will be supported by ELI's 
Entity Subordinated Debentures and Guaranty (if issued), and the 
distributions to holders of Entity Interests will be paid out of the 
interest payments on the Entity Subordinated Debentures or under the 
Guaranty, the Entity partnership agreement or declaration of trust 
will not include any interest or distribution coverage or 
capitalization ratio restrictions on the ability to issue and sell 
additional Entity Interests.
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    ELI proposes to use the net proceeds derived from the issuance and 
sale of Bonds, Debentures, Preferred and/or Entity Interests for 
general corporate purposes, including, but not limited to, the conduct 
of its business as an electric utility, the repayment of outstanding 
securities when due and/or the possible redemption, acquisition, or 
refunding of certain outstanding securities prior to their maturity 
date.\8\
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    \8\ ELI states that the proceeds received from the issuance and 
sale of the Bonds, Debentures, Entity Interests, Preferred and Tax-
Exempt Bonds (defined below) will not be used to invest directly or 
indirectly in exempt wholesale generators or foreign utility 
companies, as defined in sections 32 and 33 of the Act.
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    ELI also proposes through the Authorization Period to enter into 
arrangements to finance on a tax-exempt basis certain solid waste, 
sewage disposal and/or pollution control facilities (``Facilities''), 
and to enter into leases, subleases, installment sale agreements, 
refunding agreements or other agreements supplements or amendments 
(``Agreements'') with one or more issuing, governmental authorities 
(``Issuer''), under which the Issuer may issue one or more series of 
tax-exempt revenue bonds (``Tax-Exempt Bonds'') up to an aggregate 
principal amount of $420 million. The net proceeds form the sale of 
Tax-Exempt Bonds will be deposited by the Issuer with the trustee 
(``Trustee'') under one or more indentures (``Indenture''). The Trustee 
will apply the proceeds to reimburse ELI for, or to finance or 
refinance on a tax-exempt basis, the costs of the acquisition, 
construction, installation or equipping of the Facilities.
    Under the Agreements, ELI will pay the principal or redemption 
price of, premium, if any, and the interest on Tax-Exempt Bonds as the 
same become due and payable. Under the Agreement, ELI will also be 
obligated to pay certain fees incurred in the transactions.
    The Agreements and the Indenture may provide for either a fixed 
interest rate or an adjustable interest rate for

[[Page 7019]]

each series of the Tax-Exempt Bonds.\9\ Each series may be subject to 
optional and mandatory redemption and/or mandatory cash sinking fund 
under which stated portions of the series would be retired at stated 
times.\10\
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    \9\ No series of Tax-Exempt Bonds would be sold if the fixed 
interest rate or initial adjustable interest rate would exceed 
market rates generally obtainable at the time of pricing for sales 
of tax-exempt bonds having a reasonably similar maturity, issued for 
the benefit of companies of a reasonably comparable credit quality 
and having reasonably similar terms, conditions and features.
    For series having adjustable interest rates, the initial 
interest rate will be negotiated between ELI and the purchasers of 
such series and will be based on the current tax-exempt market rates 
for comparable bonds having a maturity comparable to the length of 
the initial rate period. Thereafter, the interest rate would be a 
rate which, when set, would be sufficient to remarket the Tax-Exempt 
Bonds at a price equal to their principal amount, but would not 
exceed the lower of 13% per annum or rates generally obtainable at 
the time of remarketing of tax-exempt bonds having the same or 
reasonably similar maturities, issued for the benefit of companies 
of reasonably comparable credit quality and having the same or 
reasonably similar terms.
    \10\ The prices, rights or requirements, and fees for the tender 
of Tax-Exempt Bonds will be determined in a manner identical to 
those described in footnote 2 for Bonds and Debentures.
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    In order to obtain a more favorable rating and thereby improve the 
marketability of the Tax-Exempt Bonds, ELI may (1) arrange for a letter 
of credit from a bank in favor of the Trustee;\11\ (2) provide an 
insurance policy for the payment of the principal of and/or interest 
and/or premium on one or more series of Tax-Exempt Bonds; and/or (3) 
obtain authentication of one or more new series of first mortgage Bonds 
(``Collateral Bonds'') to be issued and delivered to the Trustee and/or 
the Bank to evidence and secure ELI's obligations under the Agreements 
and/or the Reimbursement Agreement, respectively.\12\ The maximum 
aggregate principal amount of Collateral Bonds would be $455 million, 
which would be in addition to the $600 million aggregate limitation on 
the Bonds and Debentures.

    \11\ In connection with the letter of credit, ELI may enter into 
a reimbursement agreement (``Reimbursement Agreement'') under which 
ELI would agree to reimburse the Bank for amounts drawn under the 
letter of credit and to pay commitment and/or letters of credit 
fees.
    \12\ Each series of Collateral Bonds that bear interest would do 
so at a fixed interest rate or initial adjustable rate that would 
not exceed 15%.
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    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-3421 Filed 2-10-98; 8:45 am]
BILLING CODE 8010-01-M