[Federal Register Volume 61, Number 37 (Friday, February 23, 1996)]
[Notices]
[Pages 7027-7031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4124]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26472]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
February 16, 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 March 11, 1996, 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.
Cinergy Corp. (70-8521)
Cinergy Corp., a registered holding company (``Cinergy''), 139 East
Fourth Street, Cincinnati, Ohio 45202, has filed a post-effective
amendment to its declaration previously filed under sections 6(a), 7,
32 and 33 of the Act and rule 53 thereunder.
By order dated January 11, 1995 (HCAR No. 26215) (``January 1995
Order''), the Commission authorized Cinergy to issue and sell from time
to time through January 31, 1997, in an aggregate principal amount at
any one time outstanding not to exceed $375 million (``Aggregate Debt
Limitation''), and within certain parameters set out in the
Commission's order and Cinergy's declaration as amended, (1) unsecured
short-term promissory notes to banks and other financial institutions,
(2) commercial paper to commercial paper dealers and financial
institutions, and (3) unsecured demand promissory notes to banks
evidencing Cinergy's reimbursement obligation in respect of letters of
credit issued by such banks on Cinergy's behalf (such bank borrowings,
commercial paper sales and letter of credit transactions being
collectively referred to as ``Short-Term Financings'').
By order dated September 21, 1995 (HCAR No. 26376) (``September
1995 Order''), the Commission also authorized Cinergy and Investments
to invest the proceeds of the Short-Term Financings in certain special
purpose subsidiaries (``Intermediate Subsidiaries''). Under the terms
of that order, the Intermediate Subsidiaries were authorized
exclusively to acquire and hold, directly or indirectly, securities of,
and/or provide services to, exempt wholesale generators (``EWGs'') and
foreign utility companies (``FUCOs''). The September 1995 Order also
provided that the aggregate outstanding principal amount of such
investments would not at any time exceed $115 million (the ``Investment
Limitation''). The September 1995 Order further provided that any such
investment would be made only if Cinergy's ``aggregate investment'' in
all EWGs, FUCOs and Intermediate Subsidiaries, after giving effect to
such investment, would not exceed 50% of Cinergy's ``consolidated
retained earnings,'' as each are defined in rule 53(a) under the Act
(``50% Limit'').
The Commission issued a notice on February 1, 1996 (HCAR No. 26467)
of a post-effective amendment (``Amendment'') to the application-
declaration approved in the September 1995 Order. In that amendment,
Cinergy and Investments seek, among other things to amend the
Investment Limitation and make investments in Intermediate Subsidiaries
subject only to the 50% Limit.
Cinergy now requests a supplemental order limited to modifying the
January 1995 Order in the following respects. First, Cinergy proposes
that the expiration date of the authorization period be extended from
January 31, 1997 to December 31, 1999. Second, Cinergy requests
authority to engage in Short-Term Financing Transactions in an
aggregate principal amount at any time outstanding not to exceed $1
billion.
Third, Cinergy requests authority to apply proceeds of Short-Term
Financing Transactions, up to the full amount of the proposed increased
Aggregate Debt Limitation noted above, to make direct and indirect
investments in EWGs and FUCOs as well as in Intermediate Subsidiaries.
Any such investment would be subject to the 50% Limit.
[[Page 7028]]
MCN Corporation (70-8731)
MCN Corporation (``MCN''), located at 500 Griswold Street, Detroit
Michigan 48226, a Michigan public utility holding company exempt under
section 3(a)(1) pursuant to rule 2 from all provisions of the Act
except section 9(a)(2), has filed an application under sections 9(a)(2)
and 10 of the Act.
MCN currently owns all of the issued and outstanding common stock
of two public utility companies as defined in the Act: Michigan
Consolidated Gas Company (``MichCon'') and Citizens Gas Fuel Company
(``Citizens''), both of which are organized and operate virtually
exclusively in the state of Michigan.\1\ MichCon is subject to
regulation by the Michigan Public Service Commission (``Michigan PSC'')
with regard to rates and other corporate matters and Citizens is
subject to regulation by the City of Adrian, Michigan with respect to
rates and by the Michigan PSC with regard to other corporate
matters.\2\
\1\ MichCon is engaged in the distribution, transmission and
storage of natural gas to approximately 1.1 million customers in
Michigan and Citizens provides natural gas distribution services to
the City of Adrian, Michigan. MichCon and Citizens provide retail
gas distribution services primarily to residential and small volume
commercial customers and transportation services to large volume
commercial and industrial customers. MichCon also provides
intrastate transportation services to other gas utilities, gas
marketers and producers.
\2\ MCN states that formal approval by the Michigan PSC of the
proposed acquisition described below is not required under Michigan
law but notes that the staff of the Michigan PSC has stated in a
letter that it does not object to the acquisition.
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MCN requests authorization to acquire a 1% general partnership
interest and a 46.5% limited partnership interest in Southern Missouri
Gas Company, L.P. (``SMGC''), a Missouri limited partnership (the
``Partnership'') which will construct, own and operate a gas pipeline
and distribution system (the ``System'') in southern Missouri.\3\ MCN
states that it will make a capital contribution of up to $10.6 million
\4\ in return for its acquisition of a 47.5% aggregate interest in SMGC
(the ``Acquisition''). MCN will also provide credit support to the
Partnership during construction of the System.\5\ The remaining
interests in SMGC will be owned by Tartan Management Company of
Missouri, L.C. or its successors (``Tartan'') which will acquire a 1%
general partnership interest and a 4% limited partnership interest, and
Torch Energy Marketing, Inc., a Delaware corporation, (``Torch''), or
its successors, which will acquire a 47.5% limited partnership
interest. MCN states that Tartan will make a capital contribution of 15
natural gas service franchises held in its name \6\ and Torch will make
a capital contribution of up to $10.6 million in return for their
aggregate 52.5% in interests.\7\
\3\ The System is currently under construction and owned by
Tartan Energy Company of Missouri, L.C., a Missouri limited
liability company (``TEC''), which holds fifteen local franchises
for providing natural gas service issued by the Missouri Public
Service Commission (``MPSC''). These licenses were originally held
by TEC's predecessor, Tartan Energy Company, L.C., (``Tartan's
Predecessor Company'') which was merged with and into TEC in
accordance with an order of the MPSC dated September 29, 1995. Prior
to the merger, Tartan's Predecessor Company obtained an order (the
``MPSC April Order'') from the MPSC authorizing an initial $39
million of expenditures to develop the System to serve approximately
9,000 customers in ten of the franchised communities. Construction
of the System to seven of the communities (``Phase One
Construction'') began in March 1995 and is expected to cost $35
million. The MPSC also issued an order dated September 13, 1995 (the
``MPSC September Order'') authorizing expansion of the System to
serve the five additional franchised communities. Construction of
the System for these five communities and one of the original ten
communities (``Phase Two Construction'') is scheduled to begin in
the spring of 1996 and is expected to cost $8 million. MCN states
that it is unable to predict when construction of the System for the
final two franchised communities (``Phase Three Construction'') will
begin since it is contingent on planned highway construction which
will be undertaken by unaffiliated third parties in the area where
the Partnership intends to build the System for these two
communities. Applicant states that, while the Partnership intends to
construct the full System, it is possible that the highway
construction may make it uneconomical to complete construction to
the final two communities. Applicant currently estimates that the
Phase Three Construction would cost $3 million, and, in any event,
would not exceed $10 million.
The MPSC April Order authorizes a maximum of $24 million in debt
financing (plus interest during construction), with the financing
being recourse to the System only. It also requires that at least
$15 million of construction funding be in the form of equity
contributions from the project partners. The order calls for at
least an initial $8 million equity contribution by the project
partners, followed by expenditure of up to $24 million in debt
financing and at least $7 million in equity funding. It also
specifies that the System must maintain a 40% equity ratio.
Applicant states that MCN and Torch will equalize their equity
contributions to the Partnership to $8 million each in apportioning
equity by the end of 1996. The MPSC September Order permits
additional debt financing for the additional construction, and, like
the MPSC April Order, requires that the System maintain a 40% equity
ratio. The additional equity necessary to complete the Phase Two
Construction while maintaining a 40% equity ratio is estimated to be
$1.2 million and will be contributed equally by MCN and Torch.
Applicant estimates that an additional equity contribution of
between $600,000 and $2 million from each of MCN and Torch would be
required to complete the Phase Three Construction while maintaining
a 40% equity ratio.
Applicant states that ownership of the System and its assets,
along with the franchises held by TEC, will be transferred from TEC
to the Partnership prior to consummation of the proposed acquisition
described herein and that, upon such transfer, the terms of the MPSC
April Order will be applicable to the Partnership. Ultimately,
through a series of transactions involving the creation and
dissolution of Tartan Limited Partnership of Missouri as an
``Interim Entity,'' TEC will be merged with and into the
Partnership, leaving the Partnership as the surviving entity, and
the franchises currently held by TEC will be transferred to Tartan.
\4\ MCN states that the funds for its capital contribution will
come from funds allocated to MCN's capital expenditure program for
the appropriate fiscal year.
\5\ Specifically, in order to facilitate the initial debt
financing of the Partnership, MCN has agreed to cause the
Partnership to maintain a positive net worth and has agreed to
provide the Partnership with funds (either as equity or a loan) if
the Partnership is unable to make timely payments under its credit
facility. MCN states that it does not expect that any payments will
be required under this credit support arrangement, but notes that
Torch has agreed to contribute to MCN 50% of any payments made by
MCN thereunder.
\6\ See footnote 3, above.
\7\ The terms of a partnership agreement among MCN, Tartan and
Torch will provide that the limited partners will take no part in
the management or control of SMGC's business and the general
partners will have exclusive management and control of the business
of the Partnership in accordance with the provisions of the Missouri
Uniform Limited Partnership Act. Tartan will serve as operator of
the SMGC System in accordance with the terms and conditions set
forth in a construction and management agreement. Tartan has filed a
Form U-3A-2 with the Commission to claim an exemption under section
3(a)(1) from all provisions of the Act except section 9(a)(2). Torch
has submitted a no-action letter request to the Division of
Investment Management asking the Division to state that it will not
recommend enforcement action under the Act upon Torch's acquisition
of a 47.5% limited partner interest in the SMGC Partnership.
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Upon consummation of the Acquisition, SMGC will be a public utility
subsidiary of MCN organized and operating exclusively in Missouri and
subject to regulation by the Missouri Public Service Commission with
regard to rates and other corporate matters. MCN anticipates that, when
fully developed and providing service to all 15 franchised communities,
the SMGC System will have over 300 miles of trunk pipeline and
distribution piping serving over 10,000 customers in Missouri.
The Southern Company (70-8789)
The Southern Company (``Southern''), 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303, a registered holding company, has filed a
declaration under sections 6(a), 7, 32 and 33 of the Act and rules 42,
53 and 54 thereunder.
Southern proposes to issue and sell short-term and term-loan notes
(``Notes'') and commercial paper from time to time prior to April 1,
2001, in an aggregate principal amount at any time outstanding not to
exceed $2 billion.\8\
\8\ Southern is currently authorized to issue and sell Notes and
commercial paper in an aggregate principal amount at any one time
outstanding of up to $1 billion, from time to time prior to April 1,
2000. Holding Co. Act Release Nos. 26004 (Mar. 15, 1994) and 26346
(Aug. 1, 1995). These orders would be superceded by the
authorization requested in this proceeding.
[[Page 7029]]
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Borrowings would be made from one or more banks or other lending
institutions and would be evidenced by Notes, dated as of the date of
borrowing (or, in the case of a grid Note, as of the date of the
initial borrowing), that would mature not more than seven years from
the date of issue. The interest rate would be at the lender's
prevailing rate offered to corporate borrowers of similar quality,
which would not exceed the prime rate; the London Interbank Offered
Rate plus up to \3/4\ of 1%; the lender's certificate of deposit rate
plus up to 1%; or a rate, not in excess of the prime rate, established
by bids obtained from lenders. Southern may pay commitment fees not
exceeding \1/2\ of 1% of the unused portion of a lender's commitment,
and may be required to maintain compensating balances with some lenders
in lieu of fees. Notes may not be prepayable, or may be prepayable with
payment of premiums not in excess of the stated interest rate on the
Note.
Commercial paper would be sold directly by Southern to or through
dealers, and would be issued in the form of promissory notes having
varying maturities not in excess of nine months. Commercial paper would
not be prepayable prior to maturity. The discount or interest rate per
annum on commercial paper would not be in excess of the rate per annum
prevailing at the date of issuance for commercial paper of comparable
quality and maturity sold by issuers to commercial paper dealers.
Southern may pay a commission not in excess of \1/8\ of 1% to dealers
selling the commercial paper as principal. Dealers may reoffer
commercial paper at a discount rate of up to \1/8\ of 1% per annum less
than the prevailing discount rate to the issuer (or an equivalent rate
if sold on an interest-bearing basis).
The net proceeds of the issuance of Notes and commercial paper
would be used by Southern (a) to invest in subsidiaries in accordance
with authorizations obtained in separate proceedings and/or in
accordance with applicable exemptions, and (b) to make additional
investments, directly or indirectly, in one or more exempt wholesale
generators (``EWGs'') and foreign utility companies (``FUCOs''), as
defined in sections 32 and 33 of the Act; provided that the sum of (i)
the outstanding amount of proceeds of the sale of Notes and/or
commercial paper at any time invested by Southern in EWGs and FUCOs,
(ii) the net proceeds of sales of new common stock used for the purpose
of making such investments,\9\ and (iii) the principal amount of any
securities of any EWGs or FUCOs in respect of which Southern has
provided a guarantee,\10\ when added to Southern's ``aggregate
investment'' (as defined in rule 53) in all EWGs and FUCOs, shall not
exceed, at any point in time, 50% of Southern's ``consolidated retained
earnings'' (as defined in rule 53).\11\ Southern states that the
proposed increase in the amount of borrowings and commercial paper is
required primarily to enable it to fund possible future investments in
EWGs and FUCOs, subject to the above limitation as it may be modified.
\9\ These sales of common stock are authorized in Holding Co.
Act Release Nos. 26349 (Aug. 3, 1995) and 26347 (Aug. 2, 1995).
\10\ These guarantees are authorized in Holding Co. Act Release
No. 26468 (Feb. 2, 1996).
\11\ Southern has requested authorization in File No. 70-8725 to
increase this limitation to 100% of its consolidated retained
earnings. If granted, this increased limitation would apply to the
financing authorization in this proceeding.
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Georgia Power Company (70-8795)
Georgia Power Company (``Georgia''), 333 Piedmont Avenue, N.E.,
Atlanta, Georgia 30308, an electric utility subsidiary company of The
Southern Company, a registered holding company, has filed a declaration
under sections 6(a), 7 and 12(d) of the Act and rules 42, 44, and 54,
thereunder.
Georgia proposes to issue and sell from time-to-time, prior to
January 1, 2003, short-term and/or term-loan notes to lenders,
commercial paper to or through dealers and/or issue non-negotiable
promissory notes to public entities for their revenue anticipation
notes in an aggregate principal amount at any one time outstanding of
up to $1.7 billion.
Georgia states that any proposed borrowings may be, and any such
borrowings in excess of its charter limits on short-term unsecured debt
would be, secured by a subordinated lien on certain assets of Georgia.
In no circumstances will Georgia have unsecured borrowings outstanding
at any one time that exceed applicable charter limitations.
Georgia proposes to borrow from certain banks or other lending
institutions. The institutional borrowings will be evidenced by notes
to be dated as of the date of such borrowings and to mature in not more
than seven years after the date of issue, or by ``grid'' notes
evidencing all outstanding borrowings from each lender to be dated as
of the date of the initial borrowing and to mature not more than seven
years after the date of issue. Georgia proposes that any note
evidencing such borrowings may not be repayable, or that it may be
prepaid with payment of a premium that is not in excess of the stated
interest rate on the borrowing to be prepaid, which premium in the case
of a note having a maturity of more than one year may thereafter
decline to the date of the note's final maturity.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. Such rates will not exceed the
prime rate or: (1) LIBOR plus up to \3/4\ of 1%; (2) the lender's
certificate of deposit rate plus up to 1%; or (3) a rate not to exceed
the prime rate to be established by bids obtained from the lenders
prior to a proposed borrowing. However, with respect to borrowings with
a maturity in excess of one year, the rate will not exceed the yield
for a comparable maturity Treasury note plus 1%. Compensation for the
credit facilities may be provided by fees of up to \1/2\ of 1% per
annum of the amount of the facility. Compensating balances may be used
in lieu of fees to compensate certain of the lenders.
Georgia also may effect short-term borrowings in connection with
the financing of certain pollution control facilities through the
issuance by public entities of their revenue bond anticipation notes.
Under an agreement with each such public entity, the entity would
effectively loan to Georgia the proceeds of the sale of such revenue
bond anticipation notes, having a maturity of not more than one year
after date of issue, and Georgia may issue its non-negotiable
promissory note therefor. Such note would provide for payments to be
made at times and in amounts which shall correspond to the payments
with respect to the principal of, premium, if any, and interest, which
shall not exceed the prime rate, on such revenue bond anticipation
notes, whenever and in whatever manner the same shall become due,
whether at stated maturity, upon redemption or declaration or
otherwise. Georgia requests that the Commission reserve jurisdiction
over short-term borrowings for this purpose, pending completion of the
record.
Georgia also proposes to issue and sell commercial paper to or
through dealers from time-to-time prior to January 1, 2003. Such
commercial paper will be in the form of promissory notes with varying
maturities not to exceed nine months. The commercial paper notes will
be issued in denominations of not less than $100,000 and will not by
their terms be prepayable prior to maturity.
Pursuant to prior Commission orders dated March 31, 1992, November
30,
[[Page 7030]]
1993, February 16, 1994 and August 2, 1995 (HCAR Nos. 25507, 25932,
25989, and 26348, respectively), Georgia may effect short-term
borrowings through April 1, 1996 (``Prior Authority''). Georgia
proposes that the authorization sought in this matter would supersede
and replace, with respect to Georgia, the Prior Authority effective
immediately upon the date of the Commission's order.
The proceeds from the proposed borrowings will be used by Georgia
for working capital purposes, including the financing in part of its
construction program. None of the proceeds from any borrowing or from
the sale of any of the notes will be used by Georgia, directly or
indirectly, for the acquisition of any interest in an ``exempt
wholesale generator'' or a ``foreign utility company'', as those terms
are defined in sections 32 and 33 of the Act, respectively.
Mississippi Power Company (70-8797)
Mississippi Power Company (``Mississippi''), 2992 West Beach,
Gulfport, Mississippi 39501, an electric utility wholly owned
subsidiary company of The Southern Company, a registered holding
company, has filed a declaration under sections 6(a), 7 and 12(d) of
the Act and rules 42, 44, and 54 thereunder.
Mississippi proposes to issue and sell from time-to-time, prior to
January 1, 2003, short-term and/or term-loan notes to lenders,
commercial paper to or through dealers and/or issue non-negotiable
promissory notes to public entities for their revenue anticipation
notes in an aggregate principal amount at any one time outstanding of
up to $350 million.
Mississippi states that any proposed borrowings may be, and any
such borrowings in excess of its charter limits on short-term unsecured
debt would be, secured by a subordinated lien on certain assets of
Mississippi. In no circumstances will Mississippi have unsecured
borrowings outstanding at any one time that exceed applicable charter
limitations.
Mississippi proposes to borrow from certain banks or other lending
institutions. The institutional borrowings will be evidenced by notes
to be dated as of the date of such borrowings and to mature in not more
than seven years after the date of issue, or by ``grid'' notes
evidencing all outstanding borrowings from each lender to be dated as
of the date of the initial borrowing and to mature not more than seven
years after the date of issue. Mississippi proposes that any note
evidencing such borrowings may not be prepayable, or that it may be
prepaid with payment of a premium that is not in excess of the stated
interest rate on the borrowing to be prepaid, which premium in the case
of a note having a maturity of more than one year may thereafter
decline to the date of the note's final maturity.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. Such rates will not exceed the
prime rate or: (1) LIBOR plus up to \3/4\ of 1%; (2) the lender's
certificate of deposit rate plus up to 1%; or (3) a rate not to exceed
the prime rate to be established by bids obtained from the lenders
prior to a proposed borrowing. However, with respect to borrowings with
a maturity in excess of one year, the rate will not exceed the yield
for a comparable maturity Treasury note plus 1%. Compensation for the
credit facilities may be provided by fees of up to \1/2\ of 1% per
annum of the amount of the facility. Compensating balances may be used
in lieu of fees to compensate certain of the lenders.
Mississippi also may effect short-term borrowings in connection
with the financing of certain pollution control facilities through the
issuance by public entities of their revenue bond anticipation notes.
Under an agreement with each public entity, the entity would
effectively loan to Mississippi the proceeds of the sale of the revenue
bond anticipation notes, having a maturity of not more than one year
after date of issue, and Mississippi may issue its non-negotiable
promissory note therefor. The note would provide for payments to be
made at times and in amounts which shall correspond to the payments
with respect to the principal of, premium, if any, and interest, which
shall not exceed the prime rate, on such revenue bond anticipation
notes, whenever and in whatever manner the same shall become due,
whether at stated maturity, upon redemption or declaration or
otherwise. Mississippi requests that the Commission reserve
jurisdiction over short-term borrowings for this purpose, pending
completion of the record.
Mississippi also proposes to issue and sell commercial paper to or
through dealers from time-to-time prior to January 1, 2003. Such
commercial paper will be in the form of promissory notes with varying
maturities not to exceed nine months. The commercial paper notes will
be issued in denominations of not less than $50,000 and will not by
their terms be prepayable prior to maturity.
Pursuant to prior Commission orders dated March 31, 1992, November
30, 1993, February 16, 1994 and August 2, 1995 (HCAR Nos. 25507, 25932,
25989, and 26348, respectively), Mississippi may effect short-term
borrowings through April 1, 1996 (``Prior Authority''). Mississippi
proposes that the authorization sought in this matter would supersede
and replace, with respect to Mississippi, the Prior Authority effective
immediately upon the date of the Commission's order.
The proceeds from the proposed borrowings will be used by
Mississippi for working capital purposes, including the financing in
part of its construction program. None of the proceeds from any
borrowing or from the sale of any of the notes will be used by
Mississippi, directly or indirectly, for the acquisition of any
interest in an ``exempt wholesale generator'' or a ``foreign utility
company,'' as those terms are defined in sections 32 and 33 of the Act,
respectively.
Savannah Electric and Power Company (70-8799)
Savannah Electric and Power Company (``Savannah''), 600 East Bay
Street, Savannah, Georgia 31401, an electric utility subsidiary company
of The Southern Company, a registered holding company, has filed a
declaration under sections 6(a), 7 and 12(d) of the Act and rules 42,
44, and 54 thereunder.
Savannah proposes to issue and sell from time-to-time, prior to
January 1, 2003, short-term and/or term-loan notes to lenders,
commercial paper to or through dealers and/or issue nonnegotiable
promissory notes to public entities for their revenue anticipation
notes in an aggregate principal amount at any one time outstanding of
up to $90 million.
Savannah states that any proposed borrowings may be, and any such
borrowings in excess of its charter limits on short-term unsecured debt
would be, secured by a subordinated lien on certain assets of Savannah.
In no circumstances will Savannah have unsecured borrowings outstanding
at any one time that exceed applicable charter limitations.
Savannah proposes to borrow from certain banks or other lending
institutions. Such institutional borrowings will be evidenced by notes
to be dated as of the date of such borrowings and to mature in not more
than seven years after the date of issue, or by ``grid'' notes
evidencing all outstanding borrowings from each lender to be dated as
of the date of the initial borrowing and to mature not more than seven
years after the date of issue. Savannah proposes that any note
[[Page 7031]]
evidencing such borrowings may not be prepayable, or that it may be
prepaid with payment of a premium that is not in excess of the stated
interest rate on the borrowing to be prepaid, which premium in the case
of a note having a maturity of more than one year may thereafter
decline to the date of the note's final maturity.
Borrowings will be at the lender's prevailing rate offered to
corporate borrowers of similar quality. The rates will not exceed the
prime rate or: (1) LIBOR plus up to \3/4\ of 1%; (2) the lender's
certificate of deposit rate plus up to 1%; or (3) a rate not to exceed
the prime rate to be established by bids obtained from the lenders
prior to a proposed borrowing. However, with respect to borrowings with
a maturity in excess of one year, the rate will not exceed the yield
for a comparable maturity Treasury note plus 1%. Compensation for the
credit facilities may be provided by fees of up to \1/2\ of 1% per
annum of the unused amount of the facility.
Savannah also may effect short-term borrowings hereunder in
connection with the financing of certain pollution control facilities
through the issuance by public entities of their revenue bond
anticipation notes. Under an agreement with each public entity, the
entity would effectively loan to Savannah the proceeds of the sale of
such revenue bond anticipation notes, having a maturity of not more
than one year after date of issue, and Savannah may issue its non-
negotiable promissory note therefor. The note would provide for
payments to be made at times and in amounts which shall correspond to
the payments with respect to the principal of, premium, if any, and
interest, which shall not exceed the prime rate, on such revenue bond
anticipation notes, whenever and in whatever manner the same shall
become due, whether at stated maturity, upon redemption or declaration
or otherwise. Savannah requests that the Commission reserve
jurisdiction over short-term borrowings for this purpose, pending
completion of the record.
Savannah also proposes to issue and sell commercial paper to or
through dealers from time-to-time prior to January 1, 2003. The
commercial paper will be in the form of promissory notes with varying
maturities not to exceed nine months. The commercial paper notes will
be issued in denominations of not less than $30,000 and will not by
their terms be prepayable prior to maturity.
Pursuant to prior Commission orders dated March 31, 1992, November
30, 1993, February 16, 1994 and August 2, 1995 (HCAR Nos. 25507, 25932,
25989, and 26348, respectively), Savannah may effect short-term
borrowings through April 1, 1996 (``Prior Authority''). Savannah
proposes that the authorization sought in this matter would supersede
and replace, with respect to Savannah, the Prior Authority effective
immediately upon the date of the Commission's order.
The proceeds from the proposed borrowings will be used by Savannah
for working capital purposes, including the financing in part of its
construction program. None of the proceeds from any borrowing or from
the sale of any of the notes will be used by Savannah, directly or
indirectly, for the acquisition of any interest in an ``exempt
wholesale generator'' or a ``foreign utility company,'' as those terms
are defined in sections 32 and 33 of the Act, respectively.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-4124 Filed 2-22-96; 8:45 am]
BILLING CODE 8010-01-M
