[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Notices]
[Pages 6242-6243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3007]
[[Page 6242]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26822]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
February 2, 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 February 20, 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.
Ameren Corporation, et al. (70-9133)
Ameren Corporation (``Ameren''), a recently formed public utility
holding company that will register under the Act, its service company,
Ameren Services Company (``AMS''), a public utility subsidiary, Union
Electric Company (``UE''), and its subsidiary, Union Electric
Development Company (``UEDC''), each of which is located at 1901
Chouteau Avenue, St. Louis, Missouri 63103; a second public utility
company, Central Illinois Public Service Company (``CIPS'') and CIPSCO
Investment Company (``CIC''), each located at 607 East Adams,
Springfield, Illinois 62739; and a third public utility company,
Electric Energy Incorporated (``EEI''), 2100 Portland Road, Joppa,
Illinois 62953, (``Applicants'') have filed an application-declaration
under sections 6(a), 7, 9(a), 10, 12(b) and 12(c) of the Act and rules
42, 43, 45 and 54 thereunder.
By order dated December 30, 1997 (HCAR No. 26809), the Commission
authorized Ameren, under section 9(a)(2) of the Act to acquire all of
the outstanding securities of CIPS and UE, and related transactions.
(``Merger Order''). After consummation of the merger transactions,
Ameren will register as a holding company under the Act. UE, CIPS and
EEI are hereafter referred to collectively as ``Utility Subsidiaries.''
AMS, UEDC and CIC are hereafter referred to collectively as ``Non-
Utility Subsidiaries.'' Non-Utility Subsidiaries together with Utility
Subsidiaries are ``Subsidiaries.''
As described more fully below, the Applicants seek authority,
through January 31, 2003 (``Authorization Period''), for: (1) Ameren to
issue common stock, debt, and other securities; (2) the Utility
Subsidiaries to issue capital stock and debt securities, including
short-term debt, and interest rate swaps; (3) intrasystem financing
among Ameren and its Non-Utility Subsidiaries, including the ability to
issue guarantees; and (4) the Subsidiaries to alter their capital
stock.
The following general terms will be applicable to the financing
transactions for which authority is sought: (1) The effective cost of
money on short-term debt financings and credit lines may not exceed 300
basis points over the six-month London Interbank Offered Rate; (2) the
effective cost of money on preferred stock and other fixed income
oriented securities, when issued, may not exceed 500 basis points over
the interest rate on 30-year U.S. Treasury securities; and (3) issuance
expenses in connection with any non-competitive offerings of
securities, including any underwriting fees, commission or other
similar compensation, will not exceed 5% of the principal or total
amount of the securities being issued. Ameren represents that at all
times during the Authorization Period its common equity will be at
least 30% of its consolidated capitalization.
The proceeds from the financings will be used for general and
corporate purposes, including: (1) Capital expenditures of Ameren or
its Subsidiaries; (2) the repayment, redemption, refunding or purchase
of debt and capital stock of Ameren or its Subsidiaries without the
need for prior Commission approval; (3) working capital requirements
and capital spending of the Ameren system; and (4) other lawful general
purposes.
1. Ameren External Financings
Ameren may obtain funds externally through sales of common stock
and/or debt financing, including commercial paper sales.
a. Common Stock
In the Merger Order, the Commission authorized Ameren to issue
137,215,462 shares of common stock in exchange for all outstanding
shares of UE and CIPSCO. In addition, Ameren was authorized to issue
and/or acquire up to 15 million shares of Ameren common stock in open
market transactions over the period ending December 30, 2003, for
purposes of Ameren's proposed benefit and dividend reinvestment plan
and certain employee benefit plans of UE, CIPS and Ameren Services that
will use Ameren common stock.
Ameren requests authority to issue up to 15 million additional
shares of Ameren common stock for general corporate purposes other than
for use in the DRIP or the benefit plans described in the Merger Order.
Common stock financing may be issued and sold pursuant to
underwriting agreements of a type generally standard in the industry.
Public distributions may be made pursuant to private negotiation with
underwriters, dealers or agents or effected through competitive bidding
among underwriters. In addition, sales may be made through private
placements or other nonpublic offerings to one or more persons.
Securities may be sold through underwriters or dealers, through agents,
directly to a limited number of purchasers (or to trusts established
for their benefit) and other shareholders through Ameren Stock Plans.
b. Indebtedness
Ameren proposes, through the Authorization Period, to issue
commercial paper and/or other short-term debt aggregating not more than
$300 million outstanding at any one time to be used for general
corporate purposes.
Ameren may sell commercial paper, from time to time, in established
domestic paper markets. Such commercial paper would be sold to dealers
at the discount rate per annum prevailing at the date of issuance from
commercial paper of comparable quality and maturities sold to
commercial paper dealers generally. It is expected that the dealers
acquiring commercial paper from Ameren will reoffer such paper at a
discount to corporate, institutional investors such as commercial
banks, insurance companies, pension funds,
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investment trusts foundations, colleges and universities, finance
companies and nonfinancial corporations.
Ameren proposes to establish back-up bank lines in an aggregate
principal amount not to exceed the amount of authorized commercial
paper. In addition, Ameren may enter into credit agreements or other
borrowing facilities with commercial banks, trust companies or other
lenders providing for revolving credit or term loans during commitment
periods not longer than the Authorization Period. The proceeds of such
borrowings will be used for general corporate purposes.
2. Utility Subsidiary External Financings
The Utility Subsidiaries request authorization to engage in certain
external financings which are outside the scope of the rule 52
exemption for financings of utility companies and for interest rate
swaps.
a. Commercial Paper
The Utility Subsidiaries propose to issue commercial paper, through
the Authorization Period, up to the following aggregate amounts: UE--
$575 million; CIPS--$125 million; and EEI--$60 million.
The Utility Subsidiaries may maintain back-up lines of credit in an
aggregate principal amount not to exceed the amount of authorized
commercial paper. Borrowings pursuant to commercial paper and related
credit lines will not exceed $575 million for UE, $125 million for CIPS
or $60 million for EEI to be outstanding at any one time.
b. Credit Lines
The Utility Subsidiaries propose to establish credit lines and
issue notes, through the Authorization Period, up to the aggregate
amounts of $425 million for UE, $125 million for CIPS, and $35 million
for EEI. Proceeds from these borrowings will be used for general
corporate purposes in addition to credit lines to support commercial
paper as described in subsection (a) above.
c. Interest Rate Swaps
The Utility Subsidiaries propose to enter into, perform, purchase
and sell financial instruments intended to manage the volatility of
interest rates, including but not limited to interest rate swaps, caps,
floors, collars and forward agreements or any other similar agreements
to the extent the same are not exempt under rule 52. Each Utility
Subsidiary may employ interest rate swaps as a means of managing risk
associated with any of its issued outstanding debt.
The Utility Subsidiaries request authorization to make and continue
use of financial hedging instruments in connection with natural gas
procurement and other utility operations. The Utility Subsidiaries will
not engage in speculative transactions.
3. Intrasystem Financings for Non-Utility Subsidiaries
a. Guarantees
Ameren proposes to obtain letters of credits, enter into expense
agreements or otherwise provide credit support with respect to the
obligations of its Non-Utility Subsidiaries as may be appropriate to
enable such system companies to carry on in the ordinary course of
their respective businesses, in an aggregate principal amount not to
exceed $300 million outstanding at any one time. Such credit support
may be in the form of committed bank lines of credit.
In addition, authority is requested for the Non-Utility
Subsidiaries to enter into arrangements with each other similar to that
described with respect to Ameren above, in an aggregate principal
amount not to exceed $50 million outstanding at any one time, except to
the extent that the same are exempt pursuant to rule 45.
4. Changes in Capital Stock of Subsidiaries
The portion of an individual Subsidiary's aggregate financing to be
affected through the sale of stock to Ameren or other immediate parent
company during the Authorization Period cannot be ascertained at this
time. It may happen that the proposed sale of capital stock may in some
cases exceed the then authorized capital stock of such Subsidiary. In
addition, the Subsidiary may choose to use other forms of capital
stock. As needed to accommodate the proposed transactions and to
provide for future issues, request is made for authority to increase
the amount or change the terms of any such Subsidiary's authorized
capital stock capitalization by an amount deemed appropriate by Ameren
or other immediate parent company in the instant case. A Subsidiary
would be able to change the par value, or change between par and no-par
stock, without additional Commission approval.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-3007 Filed 2-5-98; 8:45 am]
BILLING CODE 8010-01-M
