[Federal Register Volume 66, Number 72 (Friday, April 13, 2001)]
[Notices]
[Pages 19250-19252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9145]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27375]


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

April 6, 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 May 1, 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 any 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 May 1, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

GPU, Inc., et al. (70-7926)

    GPU, Inc., (``GPU''), 300 Madison Avenue, Morristown, New Jersey 
07962, a registered holding company, and its electric public utility 
subsidiaries, Jersey Central Power & Light Company (``JCP&L''), 
Metropolitan Edison Company (``Met-Ed''), and Pennsylvania Electric 
Company (``Penelec''), (collectively, ``GPU Subsidiaries'' or together 
with GPU, ``Applicants''), each of 2800 Pottsville Pike, Reading, 
Pennsylvania 19640 have filed with this Commission a post-effective 
amendment under sections 6, 7, 9(a), 10 and 12(b) of the Act and rules 
45 and 54 under the Act, to their declaration previously filed under 
the Act.
    By orders dated December 15, 2000 (Holding Company Act Release 
(``HCAR'') No. 27302), June 22, 1999 (HCAR No. 27041), December 22, 
1997 (HCAR No. 26801), and July 17, 1996 (HCAR No. 26544) (``Prior 
Orders''), the Commission, among other things, authorized through 
December 31, 2003 (``Authorization Period''): (1) the Applicants to 
issue, sell and renew from time to time their respective unsecured 
promissory notes, with maturity dates not more than nine months after 
issuance, to various commercial banks under loan participation 
arrangements and lines of credit (``Lines of Credit''); (2) the GPU 
Subsidiaries to issue and sell from time to time their unsecured 
promissory notes as commercial paper (``Commercial Paper''); (3) the 
Applicants to issue, sell and renew from time unsecured promissory 
notes to lenders other than commercial banks, insurance companies or 
similar institutions (``Other Short-Term Debt'') (borrowings under 
Lines of Credit, Commercial Paper and Other Short-Term Debt are 
collectively referred to as ``Short-Term Borrowings''); (4) the 
Applicants to issue and sell from time to time unsecured promissory 
notes under an amended and restated credit agreement (``Credit 
Agreement'') in an aggregate amount of up to $250 million; and (5) GPU 
to issue and sell from time to time Commercial Paper in aggregate 
amount of up to $100 million. The authorized amounts of Short-Term 
Borrowings that may be outstanding at any one time for each Applicants 
are as follows: GPU, up to $250 million; JCP&L, up to the limitation on 
short-term indebtedness contained in its charter--$266 million as of 
December 31, 2000; Met-Ed, up to $150 million; and Penelec, up to $150 
million (collectively, ``Authorized Amounts'').
    Applicants propose that the GPU Subsidiaries issue, sell and renew 
Other Short-Term Debt to GPU, in addition to

[[Page 19251]]

the lenders authorized in the Prior Orders, from time to time through 
the Authorization Period. The Authorized Amounts would remain 
unchanged. Applicants state that the GPU Subsidiaries' first mortgage 
bond indentures, in general, prohibit the GPU Subsidiaries' from paying 
common stock dividends except to the extent they have credited amounts 
to earned surplus--i.e., retained earnings. Applicants state that Met-
ed and Penelec currently have only limited amounts of retained earnings 
from which they may declare and pay common stock dividends to GPU as a 
result of this prohibition. Accordingly, Applicants stat that in order 
to provide the GPU Subsidiaries with an alternative source to fund 
temporary cash flow requirements, GPU would intend to make short-term 
loans to the GPU Subsidiaries from time to time subject to the 
Authorized Amounts. Proceeds from these loans will be used by the GPU 
Subsidiaries for general corporate purposes, but will not be used for 
the payments of dividends to GPU. Applicants state that the interest 
that the GPU Subsidiaries pay on the borrowings would not exceed GPU's 
own average cost of short-term bank borrowing during the period when 
the loan is outstanding.
    In addition, the GPU Subsidiaries seek authority to secure 
borrowings made from time to time under the Lines of Credit, Other 
Short-Term Debt and the Credit Agreement. Under ``provider of last 
resort'' obligations of the New Jersey and Pennsylvania electric 
utility restructuring legislation, the GPU Subsidiaries are required to 
supply electricity to consumers who do not receive electricity from an 
alternative generation supplier. Applicants state that given the GPU 
Subsidiaries' obligations to offer ``provider of last resort'' supply 
to retail customers under their respective state restructuring orders, 
which establish retail rate caps, and the recent financial difficulties 
encountered by the California electric utilities, GPU is experiencing a 
significant tightening of its commercial bank and other credit sources. 
The Credit Agreement expires on May 6, 2001. As a result, Applicants 
are currently negotiating with the agent banks, The Chase Manhattan 
Bank and Citibank, N.A. (``Agent Banks''), under the Credit Agreement 
the possible terms and conditions of a renewal or extension of the 
Credit Agreement. Applicants state that the Agent Banks have advised 
GPU that it will be necessary for the GPU Subsidiaries to secure their 
respective future borrowings under the Credit Agreement (for example, 
by a pledge of Senior Notes and/or First Mortgage Bonds) in connection 
with any renewal or extension of its Credit Agreement. Applicants state 
that the GPU Subsidiaries would not however, secure the borrowings with 
assets, the disposition of which is subject to Commission approval 
under the Act, without prior Commission authorization.
    Applicants also state that the Agent Banks under the Credit 
Agreement have advised GPU that it will be necessary to increase the 
level of certain fees and applicable margins used in the determination 
of interest rates upon borrowings in connection with any such renewal 
or extension. Applicants state that the applicable margin and the 
facility fee will be based upon the level corresponding to the relevant 
borrower's debt rating at the time of determination. As used in this 
notice, the term ``Debt Rating'' means, in GPU's case, the lower of the 
ratings issued by Standard & Poor's Corporation (``S&P'') and Moody's 
Investors Service, Inc. (``Moody's'') in respect of GPU's senior 
unsecured non-credit enhanced long-term debt and, in the case of each 
GPU Subsidiary, the lower of the ratings issued by S&P and Moody's in 
respect of each of the GPU Subsidiary's senior secured long-term debt. 
Also, as used in this notice, ``D&P'' means Duff & Phelps, Inc.
    Notes issued under the current terms of the Credit Agreement have 
corresponding applicable margins used in the determination of interest 
rates as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Level 1              Level 2            Level 3            Level 4            Level 5              Level 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
S&P..........................  A- or better..........  BBB+               BBB                BBB-               BB+                BB or below*.
Moody's......................  A3 or better..........  Baa1               Baa2               Baa3               Ba1                Ba or below*.
D&P..........................  A- or better..........  BBB+               BBB                BBB-               BB+                BB or below*.
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                                                                 Basis Points Per Annum
--------------------------------------------------------------------------------------------------------------------------------------------------------
Eurodollar Rate..............  25.00 b.p.............  30.00 b.p.         32.50 b.p.         37.50 b.p.         62.50 b.p.         125.00 b.p.
Facility Fee.................  10.00 b.p.............  12.50 b.p.         15.00 b.p.         20.00 b.p.         37.50 b.p.         50.00 b.p.
--------------------------------------------------------------------------------------------------------------------------------------------------------
 *Or unrated.

    The new fees and applicable margins used in the determination of 
interest rates will not be in excess of the following:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Level 1              Level 2            Level 3            Level 4            Level 5              Level 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
S&P..........................  A or better...........  A-                 BBB+               BBB                BBB-               BB+ or below *
Moody's Debt Rating..........  A2 or better..........  A3                 Baa1               Baa2               Baa3               Ba1 or below *
Applicable Eurodollar Rate...  46.50 basis points....
Margin * *...................  (``b.p.'')............  62.50 b.p.         72.50 b.p.         82.50 b.p.         115.00 b.p.        195.00 b.p.
Facility Fee.................  18.50 b.p.............  20.00 b.p.         22.50 b.p.         25.00 b.p.         30.00 b.p.         50.00 b.p.
--------------------------------------------------------------------------------------------------------------------------------------------------------
** The applicable margin for base rate advances will at all times be 100 basis points below the corresponding applicable margin for eurodollar rate
  advances (but will not be negative).

    The co-agents under the Credit Agreement will each receive an 
agreement fee not in excess of $500,000 and each participating lender 
will receive an upfront fee not in excess of 22.5 basis points.
    Applicants also propose to increase the aggregate principal amount 
of promissory notes that they may issue, sell and renew under the 
Credit Agreement to $500 million. In no event, however, would the 
aggregate outstanding amount of short-term debt issued by any Applicant 
at any time

[[Page 19252]]

exceed its Authorized Amount through the Authorization Period.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-9145 Filed 4-12-01; 8:45 am]
BILLING CODE 8010-01-M