[Federal Register Volume 66, Number 56 (Thursday, March 22, 2001)]
[Notices]
[Pages 16073-16074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7107]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27356]


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

March 16, 2001.
    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 April 9, 2001, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 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 April 9, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Cinergy Corp. (70-9789)

Notice of Proposal To Amend Certificate of Incorporation To Issue 
Preferred Stock; Order Authorizing Solicitation of Proxies

    Cinergy Corp. (``Cinergy''), 139 East Fourth Street, Cincinnati, 
Ohio 45202, a registered holding company, has filed a declaration with 
the Commission, under sections 6(a)(2), 7(e), and 12(e) of the Act and 
rules 54, 62(d), and 65 under the Act.
    By order dated June 23, 2000 (HCAR No. 27190) (``Prior Order''), 
the Commission authorized Cinergy to engage in various financing 
transactions over a five-year period commencing with the date of the 
Prior Order, including the issuance of preferred securities, subject to 
the terms and conditions of the Prior Order.
    Cinergy is currently authorized, under its certificate of 
incorporation, to issue 600 million shares of common stock. Cinergy 
requests authorization to amend its certificate of incorporation to 
permit the company to issue preferred stock in addition to the common 
stock. Specifically, Cinergy intends to issue up to 10,000,000 shares 
of preferred stock in one or more series with the terms of each series 
to be determined by Cinergy's Board of Directors (``Proposed

[[Page 16074]]

Amendment''). Under the Delaware General Corporation Law, Cinergy may 
amend its certificate of incorporation to create new classes of stock 
upon appropriate action by the Board of Directors and shareholders duly 
adopting the proposed amendment. Cinergy's Board of Directors 
unanimously approved the Proposed Amendment. In order for the Proposed 
Amendment to be adopted, not less than a majority of the outstanding 
shares of common stock entitled to vote must be voted in favor of the 
Proposed Amendment.
    Cinergy requests authorization for the solicitation of proxies from 
its shareholders for the purpose of obtaining the required shareholder 
approval of the Proposed Amendment at the shareholder meeting to be 
held on May 1, 2001. Cinergy requests authorization for the 
solicitation of proxies as soon as practicable under rule 62(d). It 
appears to the Commission that Cinergy's declaration regarding the 
proposed solicitation of proxies should be permitted to become 
effective immediately under rule 62(d).
    For the purposes of compliance with rule 54, Cinergy states that it 
does not currently meet the conditions of rule 53(a). As of December 
31, 2000, Cinergy's ``aggregate investment,'' as defined in rule 
53(a)(1), in exempt wholesale generators (``EWGs'') and foreign utility 
companies (``FUCOs'') was approximately $1,371,200,000. This amount is 
equal to approximately 119% of Cinergy's average ``consolidated 
retained earnings,'' also as defined in rule 53(a)(1), for the four 
quarters ending December 31, 2000, of approximately $1,151,200,000. 
This amount exceeds the 50% ``safe harbor'' limitation contained in the 
rule. However, by order dated March 23, 1998 (HCAR No. 26848) (``1998 
Order''), the Commission authorized Cinergy to increase its aggregate 
investment in EWGs and FUCOs to an amount equal to 100% of Cinergy's 
average ``consolidated retained earnings'' (``100% Cap''). By order 
dated June 23, 2000 (HCAR No. 27190) (``2000 Order''), the Commission 
granted Cinergy additional authorization to invest in EWGs and FUCOs 
beyond that granted in the 1998 Order. Specifically, the 2000 Order 
authorized investment of $1,000,000,000 in addition to Cinergy's 
aggregate investment as of the date of the 2000 Order (approximately 
$731,000,000). Therefore, although Cinergy's aggregate investment at 
December 31, 2000, exceeds the 50% ``safe harbor'' limitation and the 
100% Cap, this investment is below the limitation authorized by the 
2000 Order. Cinergy states that none of the adverse conditions of rule 
53(b) exist.
    As of September 30, 1997, the most recent period for which 
financial statement information was evaluated in the 1998 Order, 
Cinergy's consolidated capitalization consisted of 44.1% equity and 
55.9% debt. As of December 31, 2000, Cinergy's consolidated 
capitalization consisted of 41.3% equity and 58.7% debt.\1\ Cinergy 
represents that the proposed transactions will have no impact on its 
consolidated capitalization; however the ultimate issuance of the 
preferred stock will increase the equity component of capitalization.
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    \1\ As of December 31, 2000, Cinergy's senior unsecured debt was 
rated ``investment grade'' by all the major rating agencies.
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    Fees and expenses in connection with the proposed transactions 
described in the declaration are estimated to be $158,500. Cinergy 
further states that no state or federal commission, other than this 
Commission, has jurisdiction over the proposed transactions.
    It Is Ordered, under rule 62 under the Act, that the declaration 
regarding the proposed solicitation of proxies become effective 
immediately, subject to the terms and conditions contained in rule 24 
under the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 01-7107 Filed 3-21-01; 8:45 am]
BILLING CODE 8010-01-M