[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Notices]
[Pages 7017-7019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3421]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26823]
Filings Under the Public Utility Holding Company Act of 1935, as
amended (``Act'')
February 5, 1998.
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 March 2, 1998, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, 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 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.
Ohio Valley Electric Corporation [70-8527]
Ohio Valley Electric Corporation (``Ohio Valley''), P.O. Box 468,
Piketon, Ohio 45661, an electric public utility subsidiary company of
American Electric Power Company, Inc., a registered holding company,
has filed a post-effective amendment to its declaration filed under
sections 6(a) and 7 of the Act and rule 54 under the Act.
By orders dated December 28, 1994 and December 12, 1996 (HCAR Nos.
26203 and 26624) (``Existing Authorization''), Ohio Valley was
authorized to incur short-term debt through the issuance and sale of
notes (``Notes'') to banks in an aggregate amount not to exceed $25
million outstanding at any one time, from time to time through December
31, 2001, provided that no Notes shall mature later than June 30, 2002.
Ohio Valley now proposes that the Existing Authorization be
increased to an aggregate amount not to exceed $50 million outstanding
at any one time.
The proceeds of the short-term debt incurred by Ohio Valley will be
added to its general funds and used to pay its general obligations and
for other corporate purposes.
Entergy Louisiana, Inc. [70-9141]
Entergy Louisiana, Inc. (``ELI''), 639 Loyola Avenue, New Orleans,
Louisiana 70113, an electric public-utility subsidiary company of
Entergy Corporation, a registered holding company, has filed an
application-declaration under sections 6(a), 7, 9(a), 10 and 12(b) of
the Act and rules 45 and 54 under the Act.
ELI proposes to issue and sell up to a combined aggregate principal
amount of $600 million of first mortgage bonds (``Bonds'') and /or one
or more series of ELI's debentures under one or more debenture
indentures or subordinated debenture indentures (``Debentures'')
through December 31, 2002 (``Authorization Period''). Each series of
Bonds or Debentures will be sold either by competitive bidding,
negotiated public offering or private placement. The price, interest
rate and maturity date will all be determined at the time of sale, or
upon execution of the agreement to sell.\1\ Each series of Bonds or
Debentures will mature not later than forty years (Bonds) or fifty
years (Debentures) from the date of issuance. One or more series of
Bonds or Debentures may include provisions for redemption or retirement
prior to maturity, including restrictions on optional redemption for a
given number of years. In addition, one or more series of Bonds or
Debentures may include provisions for the mandatory retirement of some
or all of the series prior to maturity.\2\ Debentures issued under a
[[Page 7018]]
subordinated debenture indenture would be expressly subordinated to
senior indebtedness of ELI, and may also provide that payments of
interest may be deferred, without creating a default, for specified
periods, so long as no dividends are being paid on, or certain actions
are being taken with respect to the retirement of, ELI's common or
preferred stock during the deferral period.
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\1\ The price, exclusive of accrued interest, to be paid to ELI
for each series of Bonds or Debentures sold at competitive bidding
will be within a range (to be specified by ELI to prospective
purchasers) of 95% to 105% of the principal amount of the series.
No series of Bonds or Debentures will be issued at rates in
excess of the lower of 15% per annum or those rates generally
obtainable at the time of pricing for sales of mortgage bonds or
debentures (as the case may be) having the same or reasonably
similar maturities, issued by companies of the same or reasonably
comparable credit quality and having reasonably similar terms,
conditions and features.
As to series of Bonds or Debentures having an adjustable
interest rate, the initial interest rate will be negotiated between
ELI and the purchasers of the series and will be based on the
current rate for comparable bonds or debentures. Thereafter, the
interest rate will be adjusted according to a pre-established
formula or method of determination (``Floating Rate Bonds'') or
(``Floating Rate Debentures'') or will be that rate which, when set,
would be sufficient to remarket the Bonds or Debentures at their
principal amount (``Remarketed Bonds'') or (``Remarketed
Debentures'').
The interest rate for Floating Rate Bonds or Floating Rate
Debentures after the initial interest rate period may be set as a
percentage of, or a specified spread from, a benchmark rate, such as
the London Interbank Offered Rate or the yield to maturity of
specified United States Treasury securities, and may be established
by reference to orders received in an auction procedure, and will
not exceed a specified maximum rate greater than 15% per annum. The
interest rate may be adjusted at established intervals or may be
adjusted simultaneously with changes in the benchmark rate.
The interest rate for Remarketed Bonds or Remarketed Debentures
after the initial interest rate period will not be greater than
rates generally obtained at the time of remarketing of bonds or
debentures having similar maturities, issued by companies of
comparable credit quality and having reasonably comparable terms,
and will not exceed a specified maximum rate greater than 15% per
annum.
\2\ The terms of Remarketed Bonds or Remarketed Debentures will
provide that holders have the right to tender or are required to
tender their Bonds or Debentures and have them purchased at a price
equal to the principal amount plus accrued and unpaid interest on
specified dates. A tender agent (``Tender Agent'') may be appointed
to facilitate the tender of any Bonds or Debentures by holders. ELI
would be obligated to pay amounts equal to the amounts to be paid to
the Tender Agent or remarketing agent appointed to reoffer the
tendered Bonds or Debentures for the purchase of Remarketed Bonds or
Remarketed Debentures.
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ELI further proposes to issue and sell one or more new series of
its preferred stock of either $25 par value (``$25 Preferred'') or $100
par value (``$100 Preferred'') (collectively, the ``Preferred'') either
by competitive bidding, negotiated public offering or private placement
during the Authorization Period. The aggregate amount of Preferred to
be issued, when combined with the Entity Interests described below,
will not exceed $260 million. The price, exclusive of accumulated
dividends, for each series of Preferred will be determined at the time
of sale and will not be less than par on a per share basis. With
respect to any series of Preferred to be sold at competitive bidding
the price to be paid will not be less than $25 nor more than $25.70 per
share for $25 Preferred and not less than $100 nor more than $102.75
per share for $100 Preferred. The terms of one or more series of the
preferred may include redemption and/or sinking fund provisions.
ELI proposes to organize either a special purpose limited
partnership or a statutory business trust (``Issuing Entity'') for the
sole purpose of issuing Entity interests (``Entity Interests'').\3\ ELI
will directly or indirectly make an equity contribution to the Issuing
Entity at the time the Entity Interests are issued and thereby directly
or indirectly acquire all of the general partnership interests (in the
case of a partnership) or all of the voting interests (in the case of a
business trust) in the Issuing Entity. ELI's equity contribution to the
Issuing Entity will at all times be at least 1% (in the case of a
limited partnership) or at least 3% (in the case of a business trust)
of the aggregate equity contributions by all security holders to the
Issuing Entity.\4\
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\3\ In the case of a limited partnership, ELI will either (a)
act as the general partner of the Issuing Entity or (b) organize a
special purpose, wholly owned corporation for the sole purpose of
acting as the general partner of the Issuing Entity.
In the case of a business trust, the business and affairs of the
trust will be conducted by one or more trustees. Prior to a default,
ELI would, as a result of its ownership of all the voting interests
in the Issuing Entity, be entitled to appoint, remove or replace the
trustee(s).
\4\ The price, exclusive of accrued distributions, to be paid to
the Issuing Entity for each series of Entity Interests to be sold at
competitive bidding will be within a range from 95% to 105% of the
liquidation amount of the series.
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ELI proposes to issue one or more series of subordinated debentures
to the Issuing Entity under a subordinated debenture indenture
(``Entity Subordinated Debentures''). Each series of Entity
Subordinated Debentures will mature at a time from their date of
issuance as ELI may determine at the time of their issuance, but not
more than fifty years.\5\ Each series of Entity Interests and
corresponding series of Entity Subordinated Debentures will be sold at
a price, and will be entitled to receive distributions or interest
payments on a periodic basis, that will have been determined at the
time of sale.\6\ One or more of Entity Interests and Entity
Subordinated Debentures may include provisions for the mandatory
retirement of some or all of the series prior to maturity. The Entity
Interests will be subject to redemption, in whole or part after a
specified date, but not later than five years after the date of
issuance, at the option of the Issuing Entity, with ELI's consent, at a
price equal to their stated liquidation preference plus any accrued and
unpaid distributions.
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\5\ Prior to maturity, ELI will pay interest only on the Entity
Subordinated Debentures, at either a fixed or adjustable rate as set
forth in the Entity subordinated debenture indenture. The
distribution rates, payment dates, redemption, maturity, and other
terms applicable to each series of Entity Interests will be
substantially identical to the interest rates, payment dates,
redemption, maturity, and other terms applicable to the Entity
Subordinated Debentures, and will be determined by ELI at the time
of issuance.
The interest paid by ELI on the Entity Subordinated Debentures
will be the only source of income for the Issuing Entity and will be
used by the Issuing Entity to pay monthly or quarterly distributions
on the Entity Interests.
ELI anticipates that its interest payments on the Entity
Subordinated Debentures will be deductible for federal and state
income tax purposes and that the Issuing Entity will be treated as
either a partnership or a trust for federal income tax purposes.
Consequently, holders of Entity Interests will be deemed to have
received interest income rather than dividends, and will not be
entitled to any ``dividends received deduction'' under the Internal
Revenue Code.
\6\ The interest rates for the Entity Subordinated Debentures
will be determined according to the same terms and conditions
described in footnote 2 above for Bonds and Debentures.
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ELI also proposes to enter into a guaranty (``Guaranty'') under
which guarantee the payment of distributions, if and to the extent that
the Issuing Entity has legally available funds for this purpose,
liquidation payments and certain ``gross up'' amounts to Equity
Interests holders. The Entity Subordinated Debentures and the Guaranty
will be expressly subordinated to the senior indebtedness of ELI.\7\
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\7\ Because the Entity Interests will be supported by ELI's
Entity Subordinated Debentures and Guaranty (if issued), and the
distributions to holders of Entity Interests will be paid out of the
interest payments on the Entity Subordinated Debentures or under the
Guaranty, the Entity partnership agreement or declaration of trust
will not include any interest or distribution coverage or
capitalization ratio restrictions on the ability to issue and sell
additional Entity Interests.
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ELI proposes to use the net proceeds derived from the issuance and
sale of Bonds, Debentures, Preferred and/or Entity Interests for
general corporate purposes, including, but not limited to, the conduct
of its business as an electric utility, the repayment of outstanding
securities when due and/or the possible redemption, acquisition, or
refunding of certain outstanding securities prior to their maturity
date.\8\
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\8\ ELI states that the proceeds received from the issuance and
sale of the Bonds, Debentures, Entity Interests, Preferred and Tax-
Exempt Bonds (defined below) will not be used to invest directly or
indirectly in exempt wholesale generators or foreign utility
companies, as defined in sections 32 and 33 of the Act.
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ELI also proposes through the Authorization Period to enter into
arrangements to finance on a tax-exempt basis certain solid waste,
sewage disposal and/or pollution control facilities (``Facilities''),
and to enter into leases, subleases, installment sale agreements,
refunding agreements or other agreements supplements or amendments
(``Agreements'') with one or more issuing, governmental authorities
(``Issuer''), under which the Issuer may issue one or more series of
tax-exempt revenue bonds (``Tax-Exempt Bonds'') up to an aggregate
principal amount of $420 million. The net proceeds form the sale of
Tax-Exempt Bonds will be deposited by the Issuer with the trustee
(``Trustee'') under one or more indentures (``Indenture''). The Trustee
will apply the proceeds to reimburse ELI for, or to finance or
refinance on a tax-exempt basis, the costs of the acquisition,
construction, installation or equipping of the Facilities.
Under the Agreements, ELI will pay the principal or redemption
price of, premium, if any, and the interest on Tax-Exempt Bonds as the
same become due and payable. Under the Agreement, ELI will also be
obligated to pay certain fees incurred in the transactions.
The Agreements and the Indenture may provide for either a fixed
interest rate or an adjustable interest rate for
[[Page 7019]]
each series of the Tax-Exempt Bonds.\9\ Each series may be subject to
optional and mandatory redemption and/or mandatory cash sinking fund
under which stated portions of the series would be retired at stated
times.\10\
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\9\ No series of Tax-Exempt Bonds would be sold if the fixed
interest rate or initial adjustable interest rate would exceed
market rates generally obtainable at the time of pricing for sales
of tax-exempt bonds having a reasonably similar maturity, issued for
the benefit of companies of a reasonably comparable credit quality
and having reasonably similar terms, conditions and features.
For series having adjustable interest rates, the initial
interest rate will be negotiated between ELI and the purchasers of
such series and will be based on the current tax-exempt market rates
for comparable bonds having a maturity comparable to the length of
the initial rate period. Thereafter, the interest rate would be a
rate which, when set, would be sufficient to remarket the Tax-Exempt
Bonds at a price equal to their principal amount, but would not
exceed the lower of 13% per annum or rates generally obtainable at
the time of remarketing of tax-exempt bonds having the same or
reasonably similar maturities, issued for the benefit of companies
of reasonably comparable credit quality and having the same or
reasonably similar terms.
\10\ The prices, rights or requirements, and fees for the tender
of Tax-Exempt Bonds will be determined in a manner identical to
those described in footnote 2 for Bonds and Debentures.
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In order to obtain a more favorable rating and thereby improve the
marketability of the Tax-Exempt Bonds, ELI may (1) arrange for a letter
of credit from a bank in favor of the Trustee;\11\ (2) provide an
insurance policy for the payment of the principal of and/or interest
and/or premium on one or more series of Tax-Exempt Bonds; and/or (3)
obtain authentication of one or more new series of first mortgage Bonds
(``Collateral Bonds'') to be issued and delivered to the Trustee and/or
the Bank to evidence and secure ELI's obligations under the Agreements
and/or the Reimbursement Agreement, respectively.\12\ The maximum
aggregate principal amount of Collateral Bonds would be $455 million,
which would be in addition to the $600 million aggregate limitation on
the Bonds and Debentures.
\11\ In connection with the letter of credit, ELI may enter into
a reimbursement agreement (``Reimbursement Agreement'') under which
ELI would agree to reimburse the Bank for amounts drawn under the
letter of credit and to pay commitment and/or letters of credit
fees.
\12\ Each series of Collateral Bonds that bear interest would do
so at a fixed interest rate or initial adjustable rate that would
not exceed 15%.
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For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-3421 Filed 2-10-98; 8:45 am]
BILLING CODE 8010-01-M
