[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14736]
[[Page Unknown]]
[Federal Register: June 17, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26064]
Filings Under the Public Utility Holding Company Act of 1935
(``Act'')
June 10, 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 July 5, 1994, to the Secretary, Securities and Exchange
Commission, Washington, DC 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.
American Electric Power Company Inc., et al. (70-7022)
American Electric Power Company, Inc. (``AEP''), a registered
holding company, and AEP Generating Company (``Generating''), an
electric public utility subsidiary of AEP, both of 1 Riverside Plaza,
Columbus, Ohio 43215, have filed a post-effective amendment to their
application-declaration filed under Sections 9(a), 10, 12(b) and 12(d)
of the Act and Rules 44 and 45 thereunder.
By order dated August 17, 1984 (HCAR No. 23399), Generating
acquired a \1/2\ undivided interest in the Rockport Generating Station
(``Plant'') with Indiana & Michigan Electric Company, now Indiana
Michigan Power Company (``I&M''), also a subsidiary of AEP, including
responsibility for 50% of the costs associated with acquiring certain
air and water pollution control devices (``Project'').
By order dated October 4, 1984 (HCAR No. 23445) (``October 1984
Order''), Generating was authorized to enter into an Agreement of Sale
(``Agreement'') with the City of Rockport, Indiana (``City'') providing
for the construction and installation of the Project by the City, and
the issuance by the City of pollution control revenue bonds (``Series
1984 A bonds'') to finance Generating's share of the Project. The
October 1984 Order authorized the issuance of the Series 1984 A Bonds
in a principal amount of $150 million. In addition, the October 1984
Order reserved jurisdiction ``with respect to the fees and commissions
to be incurred by [Generating] and AEP in connection with this
transaction, and the terms of sale under the Agreement.''
By order dated September 6, 1985 (HCAR No. 23821) (``1985 Order''),
Generating was authorized to enter into a First Amendment to Agreement
of Sale (``1985 Agreement'') with the City providing for the issuance
and sale of three additional series of pollution control bonds
(collectively, ``Series 1985 Bonds''), each in the principal amount of
$55 million with a maturity of September 1, 2014. One series of the
Series 1985 Bonds was issued with a variable interest rate (``Variable
Rate Bonds'') the rate of which was based upon an index and not to
exceed 12% per annum, determined weekly and payable monthly. A second
series of the Series 1985 Bonds was issued with the interest payable
semi-annually at a rate which will be adjusted every five years based
upon an index (``Adjustable Bonds''). A third series of the Series 1985
Bonds was issued with the interest rate fixed at 9\3/8\% per annum,
payable semi-annually (``Fixed Rate Bonds''), and these Fixed Rate
Bonds were issued subject to optional redemption following an initial
period not to exceed ten years. The proceeds of the Series 1985 Bonds
were used to cover a portion of the cost of construction of the Project
and to refund the outstanding short-term Series 1984 A Bonds in the
principal amount of $150 million. The 1985 Order included no
reservation of jurisdiction.
AEP and Generating now propose that Generating entire into an
agreement with the City whereby the City will issue and sell up to $55
million of a series of refunding bonds (``Refunding Bonds'') the net
proceeds from the sale of which will be used to provide for the payment
of principal required for the refunding prior to their stated maturity
of $55 million principal amount of the Fixed Rate Bonds. The Refunding
Bonds will be issued under and secured by the existing indenture
(``Indenture'') between the City and the Lincoln National Bank and
Trust Company, as trustee (``Trustee'') and a fifth supplemental
indenture (``Fifth Supplemental Indenture'') to be execute pursuant to
Commission authorization under this post-effective amendment. Pursuant
to the Indenture and the Fifth Supplemental Indenture, the proceeds of
the sale of the Refunding Fixed Rate Bonds will be deposited with the
Trustee and applied by the Trustee, together with other funds supplied
by Generating, to the redemption of the Series 1985 A Bonds at a price
of 102% of the principal amount thereof.
It is stated that the Refunding Fixed Rate Bonds will bear interest
semi-annually and mature at a date or dates not more than 40 years from
the date of their issuance. The Refunding Fixed Rate Bonds may be
subject to mandatory or optional redemption under circumstances and
terms specified at the time of pricing, and, if it is deemed advisable,
may also include a sinking fund provision. In addition, the Refunding
Fixed Rate Bonds may not, if it is deemed advisable, be redeemable at
the option of the City in whole or in part at any time for a period to
be determined at the time of pricing the Refunding Fixed Rate Bonds.
Generating has been advised that, depending on maturity and other
factors, the annual interest rate on obligations, interest on which is
so excludable from gross income, historically has been, and can be
expected at the time of issuance of the Refunding Fixed Rate Bonds to
be, 1\1/2\% to 2\1/2\% or more lower than the rates of obligations of
like terms and comparable quality, interest on which is fully subject
to Federal income tax. In any event, on series or Refunding Fixed Rate
Bonds will be issued at rates in excess of those generally obtained at
the time of pricing for sales of substantially similar tax-exempt bonds
(having the same maturity, issued by entities of comparable credit
quality and having similar terms, conditions and features). As of June
1, 1994, Generating anticipated that the interest rate for the
Refunding Fixed Rate Bonds would be 7.25% without any credit
enhancement and 6.75% with bond insurance.
Generating will not agree, without further Commission
authorization, to the issuance of any Refunding Fixed Rate Bond by the
City (i) if the stated maturity of any such Bond shall be more than
forth (40) years, (ii) if the rate of interest to be borne by any such
Bond shall exceed 8% per annum, (iii) if the discount from the initial
public offering price of any such Bond shall exceed 5% of the principal
amount thereof, or (iv) if the initial public offering price shall be
less than 95% of the principal amount thereof.
Generating also proposes to provide credit enhancement for the
Refunding Bonds in the form of a letter of credit, surety bond or bond
insurance and pay any related fees. As a supplement or alternative to a
letter of credit, surety bond or bond insurance, AEP proposes to
guarantee the Refunding Bonds. Any letter of credit would not exceed
$55 million and would be for a term ranging from one to five years and
would be renewable. Drawings under the letter of credit would bear
interest at no more than 1% above the bank's prime rate. Generating may
pay an annual fee which would not exceed 1.25% of the face amount of
the letter of credit.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14736 Filed 6-16-94; 8:45 am]
BILLING CODE 8010-01-M
