[Federal Register Volume 67, Number 5 (Tuesday, January 8, 2002)]
[Notices]
[Pages 940-941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-402]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27488]


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

January 2, 2002.
    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 January 28, 2002, 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 January 28, 2002, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

American Electric Power Company, Inc. (70-10021)

    American Electric Power Company, Inc. (``AEP''), a registered 
holding company, 1 Riverside Plaza, Columbus, Ohio 43215, has filed a 
declaration under sections 6(a), 7, 32, and 33 of the Act and rules 53 
and 54 under the Act.
    The Commission issued an order on April 20, 2001 (HCAR No. 27382) 
(``April Order'') authorizing AEP to organize and acquire all of the 
common stock or other equity interests of one or more financing 
subsidiaries (``FS'') for the purpose of effecting various financing 
transactions through June 30, 2004. These transactions involved the 
issuance and sale of up to $1.5 billion unsecured in any combination of 
preferred securities, debt securities, interest rate hedges, 
anticipatory hedges, stock purchase contracts, and stock purchase 
units, as well as stock issued under the stock purchase contracts and 
stock purchase units. AEP has issued $1.25 billion debt under the April 
Order. The Commission further authorized AEP to effect directly 
financing transactions involving preferred securities, debt securities, 
stock purchase contracts, or stock purchase units. By supplemental 
order dated May 29, 2001 (HCAR No. 27408) (``May Order''), the 
Commission released jurisdiction and authorized the use of proceeds of 
the financings authorized in the April Order for investment in exempt 
wholesale generators ``(EWGs'') and foreign utility companies 
(``FUCOs'').
    In addition to continuing to engage in the transactions authorized 
in the April Order and the May Order, AEP requests authorization to 
increase the investment limit from $1.5 billion to $3.0 billion. AEP 
also requests authorization to issue common stock directly and through 
FS. In the case of direct common stock sales, AEP proposes to sell its 
common stock other than as a component or in satisfaction of a stock 
purchase contract or stock purchase unit (a) through solicitations of 
proposals from underwriters or dealers; (b) through negotiated 
transactions with underwriters or dealers; (c) directly to a limited 
number of purchasers or to a single purchaser; and or (d) through 
agents. The price applicable to shares sold in any transaction will be 
based on several factors, including the current market price of the 
common stock and prevailing capital market conditions. AEP is 
authorized under its restated articles of incorporation to issue 
600,000,000 shares of common stock ($6.50 par value), of which 
322,024,714 were issued and outstanding as of February 1, 2001. As of 
September 30, 2001, AEP's consolidated capitalization consisted of 
63.0% indebtedness, 0.7% preferred stock, 1.3% mandatorily redeemable 
preferred securities, and 35.0% common equity.
    AEP states that interest rate hedges and anticipatory hedges will 
be treated for accounting purposes under generally accepted accounting 
principles. The April Order authorized hedges that would qualify for 
hedge accounting treatment.
    AEP states that it will not publicly issue unsecured indebtedness 
or preferred securities in this file unless it has maintained at least 
an investment grade corporate or senior unsecured debt rating by at 
least one nationally recognized rating agency.
    AEP was authorized in the April Order to form special purpose 
subsidiaries (``SPS'') in connection with the issuance of unsecured 
preferred securities. The April Order also authorized FS to issue and 
sell unsecured subordinated debentures, unsecured promissory notes or 
other unsecured debt instruments (``Note'' or ``Notes''). AEP states 
that it expects the FS interest payments on the Notes will be 
deductible for federal income tax purposes and that each SPS will be 
treated as either a partnership or a passive grantor trust for federal 
income tax purposes. Consequently, holders of the preferred securities 
and AEP will be deemed to have received distributions in respect of 
their ownership interests in the respective SPS and will not be 
entitled to any ``dividends received deduction'' under the Internal 
Revenue Code. The preferred securities of any series, however, may be 
redeemable at the option of the SPS issuing the series (with the 
consent or at the direction of AEP) at a price equal to their par or 
stated value or liquidation preference, plus any accrued and unpaid 
dividends or distributions, (a) at any time after a specified date not 
later than approximately ten years from their date of issuance, or (b) 
upon the occurrence of certain events, among them that (x) the SPS is 
required to withhold or deduct certain amounts in connection with 
dividend, distribution or other payments or is subject to federal 
income tax with respect to interest received on the Notes issued to the 
SPS, or (y) it is determined that the interest payments by FS on the 
related Notes are not deductible for income tax purposes, or (z) the 
SPS becomes subject to regulation as an ``investment company'' under 
the Investment Company Act of 1940. The preferred securities of any 
series may also be subject to mandatory redemption upon the occurrence 
of certain events. FS also may have the right in certain cases or in 
its discretion to exchange the preferred securities of any SPS for the 
Notes or other junior subordinated debt issued to the SPS.
    In the event that any SPS is required to withhold or deduct certain 
amounts in connection with dividend, distribution or other payments, 
the SPS may also have the obligation to ``gross up'' the payments so 
that the holders of the preferred securities issued by the SPS will 
receive the same payment after the withholding or deduction as they 
would have received if no withholding

[[Page 941]]

or deduction were required. In this event, FS obligations under its 
related Note may also cover this ``gross up'' obligation. In addition, 
if any SPS is required to pay taxes with respect to income derived from 
interest payments on the Notes issued to it, the FS may be required to 
pay additional interest on the related Notes as necessary in order that 
net amounts received and retained by the SPS, after the payment of the 
taxes, shall result in the SPS having the funds as it would have had in 
the absence of the payment of taxes.
    The proceeds of any financing by FS or any SPS will be remitted, 
paid as a dividend, loaned or otherwise transferred to AEP or its 
designee. The proceeds of preferred securities, debt securities, stock 
purchase contracts and stock purchase units will be used to acquire the 
securities of associate companies and interests in other businesses, 
including interests in EWGs and FUCOs, or in any transactions permitted 
under the Act and for other general corporate purposes, including the 
reduction of short-term indebtedness. AEP had approximately $3.6 
billion outstanding short-term indebtedness as of September 30, 2001. 
No proceeds will be used to purchase generation assets currently owned 
by AEP or any affiliate unless the purchase has been approved by order 
of this Commission under File No. 70-9785 or other similar 
applications.
    AEP represents that no financing proceeds will be used to acquire 
the equity securities of any company or any interest in other 
businesses unless the acquisition has been approved by the Commission 
in this proceeding or in File No. 70-9353 or is in accordance with an 
available exemption under sections 32, 33 and 34 of the Act or rule 58 
under the Act. AEP does not seek in this proceeding any increase in the 
amount it is permitted to invest in EWGs and FUCOs.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-402 Filed 1-7-02; 8:45 am]
BILLING CODE 8010-01-P