[Federal Register Volume 61, Number 248 (Tuesday, December 24, 1996)]
[Notices]
[Pages 67862-67863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32653]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26630]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
December 17, 1996.
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 10, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy of the relevant
applicant(s) and/or declarant(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.
National Fuel Gas Company (70-8963)
National Gas Fuel Company (``NFG''), a registered holding company,
and its wholly-owned subsidiary companies, National Fuel Gas
Distribution Corporation, National Fuel Gas Supply Corporation
(``Supply), Seneca Resources Corporation, Highland Land & Minerals,
Inc., Leidy Hub, Inc., Horizon Energy Development Inc., and Data-Track
Account Services, Inc., all located at 10 Lafayette Square, Buffalo,
New York 14203, and National Fuel Resources, Inc. 478 Main Street,
Buffalo, New York 14202, and Utility Constructors, Inc., East Erie
Extension, Linesville, Pennsylvania 16424 (collectively ``Subsidiary
Companies''), have filed an application-declaration under sections
6(a), 7, 9(a), 10, 12(b) and 13(b) of the Act and rules 16, 45, 54, 87,
90 and 91 thereunder.\1\
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\1\ The Subsidiary Companies, except for Supply, are joining in
this Application for the sole purpose of requesting that Affiliate
(as described herein) be added to the Money Pool Arrangement (as
described herein).
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NFG seeks authority to acquire, directly or indirectly through
Supply, a wholly-owned subsidiary (``Affiliate'').\2\ Affiliate will
participate in a joint venture (``Joint Venture'' or ``Special Purpose
Entity'') with one or more subsidiaries of Tennessee Pipeline Company
(``Tennessee Affiliate''), a non-affiliate, to develop, construct,
finance, own and operate (i) natural gas gathering facilities
commencing at locations offshore to gather gas produced in Green
Canyon, Ewing Bank, Mississippi Canyon, Ship Shoal, Grand Isle and
South Timbalier areas located in the Outer Continental Shelf and
terminating onshore in Louisiana (``Gathering Facilities''), and (ii)
natural gas processing facilities to be located at or near the terminus
of the Gathering Facilities (``Processing Facilities''), and to engage
in certain related transactions (collectively, the ``Project'').
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\2\ It is contemplated that Affiliate will be a new corporation
formed by Tennessee. All of Affiliate's outstanding stock will be
purchased for a nominal price.
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I. Structure of the Joint Venture
It is contemplated that the Project activities would be conducted
through one or more Special Purpose Entities, which will be formed for
the sole purpose of engaging in Project activities, and which will be
50% owned by Affiliate, and 50% owned by Tennessee Affiliate.
II. Project Cost and Financing
a. Aggregate Cost
The aggregate cost of the Project is estimated to be approximately
$250 million, including development, construction and related costs
until commercial operation, currently scheduled to commence in the
fourth quarter of 1997 (``Commercial Operations Commencement Date'').
b. Initial Financing by Supply
Supply may initially pay certain costs for Project materials and
land, which shall be reimbursed by the Special Purpose Entities at cost
plus and amount equal to the actual annual interest rate (``Money Pool
Interest Rate'') charged on outstanding borrowings from the money pool
arrangement between NFG and its subsidiary companies (HCAR No. 26443,
December 28, 1995) (``Money Pool Arrangement''). Supply may also
initially pay one-half of certain Project development costs, which
shall be reimbursed by Affiliate at cost. Supply and/or Affiliate will
pay a development fee to Tennessee Affiliate or one of its designated
subsidiaries. All of the costs enumerated above shall be collectively
referred to as the ``Initial Development Cost Obligations.'' Supply
proposes to pay for the Initial Development Cost Obligations through
borrowings from the Money Pool Arrangement.
c. Construction Financing From the Money Pool Arrangement
NFG proposes to provide, or arrange for, short-term loans, through
borrowings from the Money Pool Arrangement, for construction financing
(``Construction Financing''). Interest will accrue at the Money Pool
Interest Rate. The Construction Financing will be with recourse to the
Special Purpose Entities and the Affiliate and Tennessee Affiliate.
Each of the Affiliate and Tennessee Affiliate will provide, in a form
acceptable to the other, a guarantee regarding repayment of the
Construction Financing.
The Construction Financing and the Initial Development Cost
Obligations will be repaid by the Special Purpose Entities in full on
the Commercial Operations Commencement Date by a
[[Page 67863]]
combination of debt and equity financing in one of the following ways:
Affiliate and the Tennessee Affiliate (i) will each contribute 15% of
the total Project costs as a capital contribution to the Special
Purposes Entities, which shall be used to pay down the debt, and (ii)
will attempt to seek non-recourse project financing for the remaining
70% of the Project costs.
d. Interim Financing by NFG or Affiliate
To the extent that additional financing is required for the Project
costs (``Interim Financing''), National or Affiliate proposes to (i)
provide, or cause to be provided, under the same terms, conditions and
limitations described in the system's long-term financing authorization
(HCAR No. 26537, June 26, 1996) (``Long-Term Financing Arrangement''),
non-recourse loans secured by the project assets, due on the second
anniversary of the Commercial Operations Commencement Date (``Second
Anniversary''), or (ii) provide guarantees or make arrangements for
recourse to National or Affiliate (collectively, ``Guarantees''), which
shall terminate on the Second Anniversary, at which time the Affiliate
and the Tennessee Affiliate will be required to make substitute
recourse arrangements with lenders, or, alternatively, make additional
equity contributions on a 50/50 basis for repayment of such
obligations.
III. Requests for Authorizations to Allow Proposed Construction and
Permanent Financing
The following requests for approval are made to implement the
foregoing construction and permanent financing arrangements:
(a) For the Construction Financing and Initial Development Cost
Obligations, NFG and the Other Applicants request approval to add
Affiliate to the Money Pool Arrangement, for short-term loans not to
exceed $250 million in principal amount at any one time outstanding;
\3\
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\3\ The $250 million maximum amount includes all loans made to
Supply or Affiliate or both in connection with any of the Initial
Development Cost Obligations and/or Construction Financing.
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(b) From and after the Commencement of Commercial Operations Date,
for the Interim Financing, NFG requests approval to add Affiliate to
the group of NFG's subsidiary companies to which NFG can make long-term
loans pursuant to the terms, conditions, and limitations contained in
the Long-Term Financing Arrangement, for long-term loans not to exceed
$210 million in principal amount at any one time not outstanding;
provided, however, that all loans by NFG to Affiliate, whether pursuant
to the Money Pool Arrangement and/or the Long-Term Financing
Arrangement, shall not in the aggregate exceed $250 million in
principal at any one time outstanding.\4\
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\4\ As appropriate, various financings and extensions of credit,
by and among, National, Supply, Affiliate and the subsidiary
companies, and affiliates, of Affiliate, in the future may be exempt
from Commission authorization pursuant to various exemptions under
the Act, as in effect, or as they may be amended from time to time.
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IV. Guarantees for Construction and Interim Financing, and Future
Business Operations
NFG proposes to enter into guarantee arrangements, obtain letters
of credit, and otherwise provide credit support for Affiliate and the
Special Purpose Entities, to third parties to enable Affiliate and the
Special Purpose Entities to carry on in the ordinary course of their
respective businesses, including as necessary for the Construction
Financing and Interim Financing.\5\ In order to implement this
proposal, NFG requests that Affiliate and the Special Purpose Entities
be added to the group of NFG's subsidiary companies to which National
may give such credit support pursuant to the terms, conditions and
limitations contained in the authorization in HCAR No. 25922, November
12, 1993; and for Affiliate, either by itself or together with NFG, to
provide such credit support to the Special Purpose Entities, not to
exceed $175 million at any one time outstanding.\6\
\5\ Tennessee will be responsible for one-half of all such
credit support needed.
\6\See footnote 3.
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For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-32653 Filed 12-23-96; 8:45 am]
BILLING CODE 8010-01-M
