[Federal Register Volume 59, Number 241 (Friday, December 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30916]
[[Page Unknown]]
[Federal Register: December 16, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26183]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
December 9, 1994.
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 January 3, 1995, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declaration(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.
Consolidated Natural Gas Company, et al. (70-7508)
Consolidated Natural Gas Company (``CNG'') a registered holding
company, and its wholly-owned subsidiary company, CNG Financial
Services, Inc. (``CNGF''), both located at CNG Tower, 625 Liberty
Avenue, Pittsburgh, Pennsylvania 15222-3199, have filed an application-
declaration under Sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 13 of
the act and Rules 42, 43, 45 and 87-90 thereunder.
CNG and CNGF request authorization, through December 31, 1998, for
CNGF to finance the purchase of certain gas utilizing equipment (``Gas
Equipment'')\1\ by creditworthy\2\ customers who purchase or may be
expected to purchase gas directly or indirectly from the local
distribution companies (``LDCs''), gas marketing or gas pipeline
subsidiaries of the CNG system. In addition, CNG seeks authorization to
provide CNGF with up to an aggregate of $25 million in funds, on a
revolving basis, through December 31, 1998, to enable CNGF to make Gas
Equipment financing loans to such customers. CNGF may obtain funds from
CNG through this day by (1) selling CNGF common stock. $10,000 par
value, to CNG, and/or (2) obtaining open account advances from CNG and/
or (3) obtaining long-term loans from CNG.
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\1\The Gas Equipment to be financed would fall into one or more
of the following categories: (1) Standard Gas Appliances -- the type
of standard gas appliances contemplated by Rule 48, including such
gas equipment as ranges, dryers, waterheaters and furnaces: (2) New
Technology Equipment -- gas equipment marketed to promote new or
unfamiliar technology that uses gas as a fuel (which could include
equipment using existing technology designed for a new application),
such as gas heat pumps, gas air conditioning and gas turbines; (3)
Alternate Fuel Equipment -- gas equipment that enables an end-user
to use natural gas as an alternative to another fuel; such equipment
would include both conversion equipment necessary to convert non-gas
utilizing equipment to equipment that can use gas as a fuel (e.g.,
energy connective apparatus enabling a coal-burning boiler to use
gas as a fuel) and gas utilizing equipment that is manufactured and
sold as a complete indivisible unit (e.g., compact gas generators).
\2\A customer would be deemed creditworthy if it had asset and
equity strength indicating a degree of expected liquidity and good
financial management. Such a condition would lead CNGF to believe
there exists a reasonable degree of probability that the Gas
Equipment financing loan would be repaid at maturity.
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Open account advances made to CNGF will be made by book entry only,
not evidenced by short-term notes, and will bear the same interest rate
as open account advances made to participants in the CNG System Money
Pool, which is equal to the effective weighted average rate of interest
on CNG's commercial paper and/or revolving credit borrowing. All such
advances will be payable on demand and may be prepaid at any time
without premium or penalty. Long-term loans to CNGF will be evidenced
by long-term non-negotiable notes (which may be book entry) of CNGF
maturing over a period of time to be determined by the officers of CNG,
with the interest predicated on and substantially equal to CNG's cost
of funds for comparable borrowings by CNG. In the event that CNG has
not had recent comparable borrowings, the rates will be tied to the
Solomon Brothers, Inc. Bond Market Roundup, or to a comparable rate
index, on the date nearest to the time of takedown. All such loans may
be prepaid at any time without premium or penalty.
CNG states that it will obtain the funds it loans to CNGF through
internal cash generation, issuance of long-term debt securities as
authorized by Commission orders dated April 21, 1993 (HCAR No. 25800)
and April 14, 1994 (HCAR No. 26026), borrowings under a credit
agreement, as authorized by Commission orders dated March 28, 1991
(HCAR No. 25283) and September 9, 1992 (HCAR No. 25626), or through
other authorizations approved or to be approved by the Commission.
Applicants also seek authorization for CNGF, from time to time
through December 31, 1998, to purchase, at par from CNG, shares of
CNGF's $10,000 par value common stock previously sold to CNG to obtain
funds, as described above, to hold such required shares as treasury
shares and to resell such shares to CNG at par.
Applicants state that customers receiving loans (``Financing
Customers'') will come primarily from the commercial and/or industrial
sectors and will result mainly from contacts between CNG Systems LDCs
and their end-use customers.\3\ CNGF proposes to conduct its Gas
Equipment financing activities both within and outside of the four
states of Virginia, West Virginia, Pennsylvania and Ohio where the CNG
System LDC's are located (collectively, ``LDC States''). However,
applicants state that during the twelve-month period beginning on the
first day of January in the year following the date CNGF commences Gas
Equipment financing activities pursuant to a Commission order issued in
the matter, and for each subsequent calendar year thereafter, the total
dollar value of Gas Equipment financing loans made to Financing
Customers in the LDC States will exceed the total dollar value of Gas
Equipment financing loans made to Financing Customers in all other
states.
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\3\CNGF will not act as a representative of any gas equipment
manufacturer or supplier but may recommend specific manufacturers or
types of gas equipment to end-users. For example, a CNG System LDC
marketing representative may recommend to a glass manufacturing
company that a new type of gas equipment be installed in a furnace
to increase production efficiency.
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CNGF will provide Gas Equipment financing to Financing Customers by
(1) making short-term loans to cover the period of installation of the
Gas Equipment until permanent financing can be obtained by the customer
or (2) making long-term loans for a period of time not to exceed the
lesser of 10 years or the expected useful life of the equipment. The
aggregate amount of Gas Equipment financing loans by CNGF outstanding
at any one time will not exceed $25,000,000, with an individual
customer financing limit of $5,000,000 at any one time.
Loans to Financing Customers may be secured or unsecured and will
be made at a spread above the cost of funds from CNG in order to cover
CNGF's costs and earn a return on its capital. CNGF does not have any
full-time employees, and Applicants expect CNGF to obtain accounting,
credit, financial, management, marketing, operating, technical and
clerical support, at cost, from CNG Service Company (``Service
Company'') pursuant to a written service agreement.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-30916 Filed 12-15-94; 8:45 am]
BILLING CODE 8010-01-M
