[Federal Register Volume 65, Number 238 (Monday, December 11, 2000)]
[Notices]
[Pages 77395-77396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31379]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27289]


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

December 4, 2000.
    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 under the Act. 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 amendment(s) is/are available for public 
inspection through the Commission's Branch 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 27, 2000, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, 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 the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts 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 December 27, 2000, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Wheeling Power Company (70-9799)

    Wheeling Power Company (``Wheeling''), 51 16th Street, Wheeling, 
West Virginia 26003, a public utility subsidiary of American Electric 
Power Company, Inc., a registered holding company, has filed with this 
Commission a declaration under sections 6(a) and 7 of the Act and rule 
54 under the Act.
    Wheeling proposes to issue from time to time through June 30, 2005 
up to $20 million at any one time outstanding, unsecured promissory 
notes (``Notes'') to one or more commercial banks, financial 
institutions or other

[[Page 77396]]

institutional investors or lenders under one or more term-loan 
agreements. The Notes will mature in not less than nine months nor more 
than ten years and will have a fixed or fluctuating rate of interest, 
or a combination of both. The actual rate of interest of each Note 
shall be subject to negotiation between Wheeling and the lender, but 
any fixed rate of interest will not exceed 500 basis points over the 
yield, at issuance, of U.S. Treasury obligations with comparable 
maturity dates, and a fluctuating rate will not exceed 500 basis points 
over the prime rate as announced from time to time by a major bank. If 
a bank or financial institution arranges financing with a third party, 
the institution may charge a placement fee not in excess of 1% of the 
principal amount of the borrowing. Wheeling will use the proceeds from 
the sale of the Notes to repay its long- and short-term debt.
    Wheeling also seeks authorization to enter into hedging 
transactions, including anticipatory hedges, with respect to its 
indebtedness in order to manage and minimize interest rate costs and to 
lock-in current interest rates.
    Wheeling requests authority 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. 
Wheeling would employ interest rate derivatives as a means of prudently 
managing the risk associated with any of its outstanding debt issued 
under the authority requested in this application or an applicable 
exemption by, in effect, synthetically (1) converting variable rate 
debt to fixed rate debt; (2) converting fixed rate debt to variable 
rate debt; and (3) limiting the impact of changes in interest rates 
resulting from variable rate debt. In no case would the notional 
principal amount of any interest rate swap exceed that of the 
underlying debt instrument and related interest rate exposure. The 
transactions would be for fixed periods. Interest rate hedges would 
only be entered into with counterparties (``Approved Counterparties'') 
whose senior debt ratings, as published by a national recognized rating 
agency are greater than or equal to ``BBB'', or an equivalent rating.
    In addition, Wheeling requests authorization to enter into interest 
rate hedging transactions with respect to anticipated debt offerings 
(``Anticipatory Hedges''), subject to certain limitations and 
restrictions. Anticipatory Hedges would only be entered into with 
Approved Counterparties, and would be utilized to fix and/or limit the 
interest rate risk associated with any new issuance through (1) a 
forward sale of exchange-traded Hedge Instruments (each a ``Forward 
Sale''); (2) the purchase of put options on Hedge Instruments (a ``Put 
Options Purchase''); (3) a Put Options Purchase in combination with the 
sale of call options on Hedge Instruments (a ``Zero Cost Collar''); (4) 
transactions involving the purchase or sale, including short sales, of 
Hedge Instruments; or (5) some combination of a Forward Sale, Put 
Options Purchase, Zero Cost Collar and/or other derivative or cash 
transactions, including, but not limited to structured notes, caps and 
collars, appropriate for the Anticipatory Hedges. Anticipatory Hedges 
may be executed on-exchange (``On-Exchange Trades'') with brokers 
through the opening of futures and/or options positions traded on the 
Chicago Board of Trade, the opening of over-the-counter positions with 
one or more counterparties (``Off-Exchange Trades''), or a combination 
of On-Exchange Trades and Off-Exchange Trades. Wheeling will determine 
the optimal structure of each Anticipating Hedge transaction at the 
time of execution. Wheeling may decide to lock in interest rates and/or 
limit its exposure to interest rate increases. Wheeling states that it 
will comply with standards relating to accounting for derivative 
transactions as are adopted and implemented by the Financial Accounting 
Standards Board (``FASB''). In addition, these financial instruments 
will qualify for hedge accounting treatment under FASB rules.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-31379 Filed 12-8-00; 8:45 am]
BILLING CODE 8010-01-M