[Federal Register: November 15, 2002 (Volume 67, Number 221)]
[Notices]
[Page 69256-69260]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15no02-96]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27598]
Filings Under the Public Utility Holding Company Act of 1935, as
amended (``Act'')
November 8, 2002.
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 under the Act. 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 amendment(s) is/are available for public
inspection through the Commission's Branch 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 December 3, 2002 to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, 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 the case of an attorney at law,
by certificate) should be filed with the request. Any request for
hearing should identify specifically the issues of facts 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 December 3, 2002, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Alliant Energy Corporation, et al. (70-9891)
Alliant Energy Corporation (``Alliant Energy''), a registered
holding company, 4902 N. Biltmore Lane, Madison, Wisconsin 53718, and
certain of its direct and indirect nonutility subsidiaries
(collectively, ``Applicants'') have filed with the Commission a post-
effective amendment to a previously filed application-declaration under
sections 6(a) and 7 of the Act and rule 54 under the Act.
[[Page 69257]]
I. Current Authority
By order dated October 3, 2001 (HCAR No. 27448) (``Prior Order''),
the Commission authorized, among other things, Alliant Energy to issue
and sell through December 31, 2004 (``Authorization Period''), directly
or indirectly through one or more financing subsidiaries, common stock,
long-term debt, and preferred stock and other forms of preferred or
equity-linked securities in an aggregate amount at any time outstanding
not to exceed $1.5 billion. The issuances and sales of these securities
are subject to certain conditions and restrictions, including the
following (``Prior Order Limitations''):
(1) The interest rate on long-term debt securities and the dividend
rate on preferred or equity-linked securities will not exceed at the
time of issuance 500 basis points over the yield to maturity of a U.S.
Treasury security having a remaining term equal to the term of such
securities.
(2) All preferred and equity-linked securities will be redeemed no
later than fifty years after issuance.
(3) Except in accordance with a further order of the Commission in
this proceeding, Alliant Energy will not issue any long-term debt or
preferred stock or other type of preferred or equity-linked securities
unless such securities are rated at the investment grade level as
established by at least one ``nationally recognized statistical rating
organization'' (``NRSRO''), as that term is used in paragraphs
(c)(2)(vi)(E), (F) and (H) of rule 15c3-1 under the Securities Exchange
Act of 1934.
II. Requested Authority
Alliant Energy now requests that the Commission issue a
supplemental order to modify the Prior Order by replacing the Prior
Order Limitations with the following ones:
(1) The interest rate on long-term debt securities issued by
Alliant Energy may not exceed at the time of issuance the greater of
500 basis points over the yield to maturity of comparable term U.S.
Treasury securities or a gross spread over U.S. Treasury securities
that is consistent with similar securities of comparable credit
quality and maturities issued by other companies.
(2) The dividend or distribution rate on preferred stock or
other preferred or equity-linked securities issued by Alliant Energy
may not exceed at the time of issuance the greater of 500 basis
points over the yield to maturity of comparable term U.S. Treasury
securities or a gross spread over U.S. Treasury securities that is
consistent with similar securities of comparable credit quality and
maturities issued by other companies.
(3) Preferred stock or other preferred securities issued by
Alliant Energy may be redeemable or perpetual in duration.
(4) Without further order of the Commission, Alliant Energy will
not publicly issue any long-term debt securities, preferred stock or
other types of preferred or equity-linked securities unless such
securities are rated as investment grade by at least one NRSO.
Applicants state that, since the Prior Order was issued, the credit
markets have tightened significantly for energy companies in general
and electric utilities and electric utility holding companies in
particular. They state that spreads over U.S. Treasury securities have
widened dramatically,\1\ and Alliant Energy's current maximum interest
rate and dividend spread (500 basis points) may limit the company's
ability to access capital markets when necessary.
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\1\Applicants state that, at the time that the Prior Order was
issued, the spreads over U.S. Treasury securities for a company of
Alliant Energy's credit quality ranged between 165 and 205 basis
points for long-term unsecured holding company debt, and now those
spreads have widened in recent weeks to between 190 and 590 basis
points.
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Applicants state that, except as specified above, no other
modifications of the terms, conditions, or limitations imposed under
the Prior Order are requested.
Alliant Energy Corporation, et al. (70-10052)
Alliant Energy Corporation (``Alliant Energy''), a registered
holding company, 4902 N. Biltmore Lane, Madison, Wisconsin 53718, and
certain of its utility and nonutility subsidiary companies
(``Applicants''), including Interstate Power and Light Company
(``IP&L''), a direct public-utility company subsidiary of Alliant
Energy, Alliant Tower, 200 First Street S.E., Cedar Rapids, Iowa 52401,
have filed with the Commission a post-effective amendment to a
previously filed application-declaration under sections 6(a) and 7 of
the Act and rule 54 under the Act.
I. Existing Authority
By order dated June 21, 2002 (HCAR No. 27542) (``Prior Order''),
the Commission authorized Alliant Energy and certain of its public-
utility company and nonutility subsidiaries to operate two separate
money pools, a money pool for its public-utility company subsidiaries
and Alliant Energy Corporate Services, Inc. (``Utility Money Pool'')
and a money pool for certain of its direct and indirect nonutility
subsidiaries (``Nonutility Money Pool''). To the extent required,
participating subsidiaries were authorized to borrow from and extend
credit to each other through the Utility Money Pool or Nonutility Money
Pool, as applicable. In addition, the Commission authorized Alliant
Energy to issue and sell, through December 31, 2004 (``Authorization
Period''), commercial paper and/or unsecured notes evidencing short-
term borrowings from banks or other institutional lenders (``Short-term
Debt'') in an aggregate amount at any time outstanding not to exceed $1
billion.
Further, by order dated October 10, 2002 (HCAR No. 27575)
(``Supplemental Order''), the Commission authorized IP&L, during the
Authorization Period, to issue and sell Short-term Debt in an aggregate
principal amount at any time outstanding which, when added to any
borrowings by IP&L under the Utility Money Pool, will not exceed the
lesser of the limit set by the Minnesota Public Utilities Commission
(``MPUC'') or $300 million.\2\
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\2\ At the time the Supplemental Order was issued, IP&L was
authorized to issue up to $180 million through March 31, 2003.
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II. Requested Authority
Applicants now request that the Commission issue another
supplemental order modifying one condition imposed by the Prior Order.
Specifically, by the Prior Order, the Commission specified that, for
all Short-term Debt issued by Alliant Energy and IP&L, the effective
cost of money at the time of issuance cannot exceed 300 basis points
over the London Interbank Offered Rate (``LIBOR'') for maturities of
one year or less. Applicants request that the Commission authorize
Alliant Energy and IP&L to issue Short-term Debt that, at the time of
issuance, has an effective cost that does not exceed the greater of 500
basis points over comparable-term LIBOR or a gross spread over LIBOR
that is consistent with similar securities of comparable credit quality
and maturities issued by other companies.
Both Alliant Energy and IP&L maintain commercial paper programs
that are back-stopped by 364-day credit facilities with banks.
Applicants state that the interest rates charged on borrowings under
these bank facilities are a function of the current ratings on Alliant
Energy's or IP&L's long-term unsecured debt, as the case may be.
Applicants further state that, since the date of the Prior Order,
spreads over LIBOR on unsecured short-term bank borrowings have widened
significantly, and the authorized 300 basis-point spread over LIBOR
could limit Alliant Energy's and IP&L's ability to borrow under back-up
credit lines if the need
[[Page 69258]]
should arise. Except as specified above, the terms, conditions, and
limitations imposed under the Prior Order would remain unchanged.
Interstate Power and Light Company (70-10077)
Interstate Power and Light Company (``Applicant''), 200 First
Street, Cedar Rapids, Iowa 52401, a wholly owned public utility
subsidiary of Alliant Energy Corporation (``Alliant''), 4902 North
Biltmore Lane, Madison, Wisconsin 53718, a registered holding company
has filed an application-declaration (``Application'') under sections
6(a), 7, 9(a), 10, and 12(b) and rules 23, 24, 45 and 53 under the Act.
The Applicant proposes, from time to time through December 31, 2005
(``Authorization Period''):
(a) To organize and acquire the stock or other equity interests in
one or more special purpose limited partnerships, statutory business
trusts or limited liability companies (``Issuing Entities'') for the
sole purpose of issuing one or more series of preferred securities
(``Entity Interests'');
(b) For the Issuing Entities to issue and sell one or more series
of preferred securities having a stated per share liquidation
preference (``Entity Interests''). Applicant states that the issuance
of the Entity Interests would also include the issuance of one or more
series of the Applicant's subordinated debentures to Issuing Entities.
Each series of subordinated debentures would be in an amount not to
exceed the amount of the respective series of Entity Interests plus an
equity contribution; and
(c) For the Applicant to issue one or more new series of the
Applicant's preferred stock, par value $0.01 per share (``Preferred
Stock'').
The Applicant proposes that the combined aggregate amount of Entity
Interests and Preferred Stock issued under the authorization granted in
the Application not exceed $200 million (``Aggregate Limit'')
outstanding at any time. The Applicant anticipates that the issuance
and sale of each series of Entity Interests and/or Preferred Stock will
be by means of competitive bidding, negotiated public offering or
private placement with institutional investors in order to secure the
advantages of an advance marketing effort and/or the best available
terms.
I. Issuing Entities
The Applicant proposes organize and acquire the Issuing Entities
for the sole purpose of issuing Entity Interests. The Applicant
requests authority to use Issuing Entities to issue preferred
securities because these securities are assigned more equity content by
certain rating agencies. Additionally, the Applicant states that the
use of Issuing Entities will afford it greater access to new sources of
capital and may offer increased state and federal tax efficiency. The
Applicant states that the Entity Interests will be reflected on its
consolidated balance sheet in accordance with accounting principles
generally accepted in the United States of America.\3\ One or more
partners, trustees or members (individually and collectively, the
``Manager'') would conduct the business and affairs of the Issuing
Entity. Provided that the Entity Interests are not then in default, the
Applicant would, as a result of its ownership of all of the voting
interests in the Issuing Entity, be entitled to appoint, remove or
replace the Manager. In the case of a limited partnership, the
Applicant proposes to either act as the general partner of the Issuing
Entity or organize a special purpose, wholly owned corporation for the
sole purpose of acting as the general partner (``Participating
Subsidiary'') of the Issuing Entity.\4\
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\3\ The Company states that by organizing Issuing Entities in
jurisdictions and/or in forms that have favorable terms, it can
indirectly offer securities with features and terms that are
attractive to a wider investor base. The Company further states that
increased tax efficiency can result if an Issuing Entity is located
in a state or country that has tax laws that make the proposed
financing transaction more tax efficient relative to the sponsor
company's existing taxing jurisdiction.
\4\ In the case of a limited liability company formed under the
laws of a state in which a limited liability company is required to
have at least two members, the Company may organize a Participating
Subsidiary for the purpose of acquiring and holding a membership
interest.
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II. Entity Interests, Entity Subordinated Debentures, Guarantees
The Applicant proposes to issue Entity Interests through the
Issuing Entities in an amount up to the Aggregate Limit, when combined
with Preferred Securities issued under this Application, through the
Authorization Period. The Applicant states that the Entity Interests
would have a stated per share liquidation preference and may be
registered under the Securities Act of 1933, as amended (``Securities
Act''). The holders of the Entity Interests would be either (a) the
limited partners (in the case of a limited partnership); (b) the
holders of preferred interests (in the case of a business trust) or (c)
non-managing members (in the case of a limited liability company) of
the Issuing Entity, and the amounts paid by the holders for the Entity
Interests would be treated as capital contribution to the Issuing
Entity.
The Applicant proposes to issue, from time to time in one or more
series, subordinated debentures (``Entity Subordinated Debentures'') to
the Issuing Entity. The Issuing Entity would use the proceeds from the
sale of its Entity Interests, plus the equity contributions made to it,
directly or indirectly, by the Applicant, to purchase the Entity
Subordinated Debentures. If the corresponding series of Entity
Interests were registered under the Securities Act, then the Entity
Subordinated Debentures would also be registered under the Securities
Act. The Entity Subordinated Debentures would be issued by the
Applicant under a debenture indenture, which, if the corresponding
series of Entity Interests and Entity Subordinated Debentures are
registered, will be qualified under the Trust Indenture Act of 1939, as
amended.
The Applicant states that the interest rate, maturity, payment
dates, redemption terms and other terms of each series of Entity
Subordinated Debentures would be designed to parallel the distribution
rate, maturity, payment dates, redemption terms and other terms of the
Entity Interests to which they relate and would be determined by the
Applicant at the time of issuance. The Applicant states that Entity
Interests may be redeemable or may be perpetual in duration and, prior
to maturity, the Applicant would 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 interest paid
by the Applicant on the Entity Subordinated Debentures would constitute
the only source of income for the Issuing Entity and would be used by
the Issuing Entity to make regular scheduled distributions on the
Entity Interests.
The Applicant also proposes to enter into a guarantee
(``Guarantee'') under which it will unconditionally guarantee (a)
payment of distributions on the Entity Interests, if and to the extent
the Issuing Entity has funds legally available therefore; (b) payments
to the holders of Entity Interests of certain amounts due upon
liquidation of the Issuing Entity or redemption of the Entity Interests
and (c) certain additional ``gross up'' amounts that may be payable in
respect of the Entity Interests.\5\
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\5\ Any Guarantee will be registered under the Securities Act if
the corresponding Entity Interests are registered under the
Securities Act.
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The Applicant states that the Entity Subordinated Debentures and
any related Guarantee issued by the
[[Page 69259]]
Applicant will be expressly subordinated to senior indebtedness of the
Applicant. The payment of interest on any Entity Subordinated
Debentures may be deferred for specified periods without creating a
default with respect thereto, so long as no dividends are being paid
on, or certain actions are being taken with respect to the retirement
of, the common or Preferred Stock of the Applicant during the period of
deferral.
The Applicant states that distributions on the Entity Interests
will be paid at regularly scheduled times as determined at the time of
sale of each series and will be mandatory to the extent that the
Issuing Entity has legally available funds sufficient for theses
purposes. The availability of funds will depend entirely upon the
Issuing Entity's receipt of the amounts due under the Entity
Subordinated Debentures. The Applicant states that the Issuing Entity
would have the right to defer distributions on the Entity Interests for
a specified period, but only if and to the extent that the Applicant
defers the interest payments on the Entity Subordinated Debentures as
described below. The Applicant states that if distributions on the
Entity Interests (including all previously deferred distributions, if
any) are deferred beyond a specified period, then the holders of Entity
Interests may have the right to appoint a special representative to
enforce the Issuing Entity's rights under the Entity Subordinated
Debentures indenture and Guarantee (if issued), including the right to
accelerate the maturity of the Entity Subordinated Debentures.
The Applicant anticipates that interest payments on the Entity
Subordinated Debentures made by the Applicant will be deductible by it
for federal and state income tax purposes and that the Issuing Entity
will be treated as either a partnership or a trust, as the case may be,
for federal income tax purposes. Consequently, the 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.
The Applicant states that if, as a result of (a) the Entity
Subordinated Debentures not being treated as indebtedness for federal
income tax purposes, or (b) the Issuing Entity not being treated as
either a partnership or a trust, as the case may be, for federal income
tax purposes, the Issuing Entity is required under applicable tax laws
to withhold or deduct from payments on the Entity Interests amounts
that otherwise would not be required to be withheld or deducted, the
Issuing Entity may also have the obligation to increase or ``gross up''
such payments so that the holders of Entity Interests will receive the
same payment after the withholding or deduction as they would have
received if no withholding or deduction were required.
The Applicant states that in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Issuing
Entity, holders of Entity Interests would be entitled to receive, an
amount equal to the stated liquidation preference of the Entity
Interests plus any accrued and unpaid distributions out of the assets
of the Issuing Entity available for distribution before any
distribution of assets to the Applicant.
Applicant propose that the distribution rate or interest rate
payable on each series of Entity Interests (and any corresponding
series of Entity Subordinated Debentures) would be determined at the
time of sale and would be consistent with rates on similar securities
of comparable credit quality and maturities issued by other companies,
provided that, if no comparable securities have been issued recently,
the Entity Interests (and corresponding series of Entity Subordinated
Debentures) may have a fixed rate or initial adjustable rate thereon at
the time of issuance not greater than (a) 500 basis points over the
yield to maturity of a U.S. Treasury security having a remaining term
comparable to the average life of such series (``Treasury Rate''), if
issued at a fixed rate, or 500 basis points over the London Interbank
Offered Rate (``LIBOR'') for the relevant interest rate period, if
issued at an adjustable rate.
The Applicant states that the initial distribution or interest rate
on Entity Interests of each series having an adjustable rate will be
determined in negotiations between the Applicant and the underwriters
or purchasers of the series. The Applicant further states that
thereafter, the distribution or interest rate on the Entity Interests
(``Adjustable Rate Entity Interests'' and on any corresponding series
of Entity Subordinated Debentures) would be adjusted according to a
pre-established formula or method of determination or would be that
rate which, at the time of remarketing, would be sufficient to remarket
the Entity Interests of the series (``Remarketed Interests'') at their
principal amount, provided that the distribution or interest rate on
Remarketed Entity Interests after the initial distribution or interest
rate period will not exceed 500 basis points over LIBOR.
The Applicant proposes that the holders of Remarketed Interests
will have the right to tender, or can be required to tender, their
Remarketed Interests and have them purchased at a price equal to the
liquidation preference plus accrued and unpaid distributions, if any,
on dates specified in, or established in accordance with the
instruments creating the Remarketed Interests. The Applicant proposes
that a tender agent (``Tender Agent'') may be appointed to facilitate
the tender of Remarketed Interests by holders. Any holder of Remarketed
Interests wishing to have them purchased may be required to deliver the
Remarketed Interests during a specified period of time preceding the
purchase date to the Tender Agent, if one shall be appointed, or to the
remarketing agent (``Remarketing Agent'') appointed to reoffer the
tendered Remarketed Interests for sale.
The Applicant states that the Issuing Entity would be obligated to
pay amounts equal to the amounts to be paid to the Remarketing Agent or
the Tender Agent for the purchase of Remarketed Interests tendered (on
the dates the payments by the Remarketing Agent or the Tender Agent are
to be made), reduced by the amount of any other moneys available,
including the proceeds of the sale of the tendered Entity Interests by
the Remarketing Agent. Upon the delivery of the Entity Interests by
holders to the Remarketing Agent or the Tender Agent for purchase, the
Remarketing Agent would use its best efforts to sell the Remarketed
Interests at a price equal to the liquidation amount of the Remarketed
Interests.
III. Preferred Stock
The Applicant proposes to directly issue Preferred Securities in an
amount up to the Aggregate Limit, when combined with Preferred
Securities issued under this Application, through the Authorization
Period. The Applicant states that as of June 30, 2002, it had
24,000,000 authorized shares of common stock, 13,370,788 of which were
issued and outstanding, and 1,927,787 authorized shares of Preferred
Stock, 1,127,787 of which were issued and outstanding. In September
2002, the Applicant redeemed all of its outstanding shares of preferred
stock according to rule 42. The Applicant states that its parent
company, Alliant Energy, as the sole holder of the Applicant's common
stock, has approved a restatement (``Restatement'') of its Articles of
Incorporation and the Applicant now requests authorization to act on
the Restatement to authorize
[[Page 69260]]
16,000,000 shares of Preferred Stock. The Applicant proposes that
Preferred Stock be issued in one or more series with rights and
preferences as the Applicant's board of directors may fix and determine
from time to time during the Authorization Period, including, without
limitation, the voting power (if any) of any series of Preferred Stock;
the redemption price; the dividend rate; the right (if any) of the
holders of any series of Preferred Stock to convert the same into, or
exchange the same for, other classes of stock of the Applicant;
liquidation preferences and sinking fund provisions.
Applicant proposes that the price, exclusive of accumulated
dividends, to be paid to the Applicant for each series of Preferred
Stock will be fixed from time to time by the board of directors. The
dividend rate on each series of Preferred Stock would be consistent
with the dividend rate on similar securities of comparable credit
quality and maturities issued by other companies. If no comparable
securities have been issued recently, the Applicant proposes that the
series of Preferred Stock may have a dividend rate at the time of
issuance not greater than 500 basis points over the applicable Treasury
Rate, if issued at a fixed rate, or 500 basis points over LIBOR for the
relevant interest rate period, if issued at a floating rate.
The Applicant proposes that each series of Preferred Stock may be
redeemable at specified redemption prices, subject to a restriction on
optional redemption for a given number of years, or may be perpetual in
duration. The Applicant proposes to include, for any series of
Preferred Stock, provisions for a sinking fund designed to redeem
annually, commencing a specified number of years, at the stated value
per share of the series, plus accumulated dividends, a number of shares
equal to a stated percentage of the total number of shares of the
series. In the case of the sinking fund provision, the Applicant
proposes to have an option to redeem an additional number of shares
annually up to a certain percentage of the total number of shares of
the series.
The Applicant commits that it will not publicly issue any Preferred
Stock or Equity Interests unless the securities are rated at the
investment grade level as established by at least one nationally
recognized statistical rating organization, as that term is used in
paragraphs (c)(2)(vi)(E), (F) and (H) of rule 15c3-1 under the
Securities Exchange Act of 1934 and that it will maintain its common
equity as a percentage of capitalization (inclusive of short-term debt)
at no less than thirty percent.
Union Electric Company (70-10089)
Union Electric Company (``AmerenUE''), 1901 Chouteau Avenue, St.
Louis, Missouri 63103 (``Declarant''), an electric and gas utility
subsidiary of Ameren Corporation (``Ameren''), a registered holding
company, has filed a declaration under section 12(d) of the Act and
rules 44 and 54 under the Act.
Declarant requests authority to sell its ownership interest in new
electric generating facilities to the City of Bowling Green, Missouri
(``Bowling Green''), and then lease back the facilities from Bowling
Green for a term of approximately 20 years.
AmerenUE supplies electric service to approximately 1.2 million
customers in a 24,500 square-mile area of Missouri and Illinois,
including the greater St. Louis area. AmerenUE also provides retail gas
service to approximately 130,000 customers in 90 Missouri communities
and in the City of Alton, Illinois and vicinity. In 2001, AmerenUE
derived approximately 95% of its revenues from electric operations and
5% from the sale of natural gas. At June 30, 2002, AmerenUE had $7.3
billion in total assets, including net property, plant and equipment of
$5.8 billion. AmerenUE's consolidated capitalization at June 30, 2002,
consisted of 55.7% common equity, 3.3% preferred stock, 33.5% long-term
debt (excluding current maturities), and 7.5% of short-term debt
(including current portion of long-term debt). AmerenUE's senior
secured long-term debt is currently rated A+ by Standard & Poor's and
Aa3 by Moody's Investors Service.
AmerenUE has constructed a new electric generating facility
consisting of four 47 megawatt combustion turbine generating units,
fueled primarily by natural gas with fuel oil as a back-up, in Bowling
Green (the ``Project''). In order to provide a financing structure and
economic incentives to construct the Project in Bowling Green, AmerenUE
has entered into a Pre-Annexation and Development Agreement (the
``Grant Agreement'') dated as of November 9, 2001, with the City, which
provides, among other things, that (a) AmerenUE will convey certain
land (the ``Site'') and any improvements located on the site, including
the four combustion turbine generating units to Bowling Green in
exchange for the issuance by Bowling Green of its taxable industrial
development revenue bond in a principal amount not to exceed
$125,000,000 (the ``Bond''), and (b) Bowling Green will lease the Site
and the Project to AmerenUE for a term of approximately 20 years.
The Trust Indenture will provide the specific terms of the Bond,
including a final maturity of twenty years and an interest rate of
5.15%. The Trust Indenture will also specify the terms and details of
the Bond and will contain various provisions, covenants and agreements
to protect the security of the bondholders (initially AmerenUE). The
Bond will be a special limited obligation of Bowling Green payable
solely from the rental payments to be made by AmerenUE pursuant to a
facility lease agreement, and in the event of a default by AmerenUE
under such lease agreement, the rents, revenues and receipts of Bowling
Green derived from the Site and the Project. The Bond will also be
secured by a Deed of Trust and Security Agreement granted by Bowling
Green encumbering the Site and the Project.
AmerenUE will transfer the Site and the Project to Bowling Green
under to a Special Warranty Deed and a Bill of Sale. Concurrently with
the issuance of the Bond, Bowling Green will lease the Site and Project
constructed on the Site to AmerenUE pursuant to a Lease Agreement (the
``Lease'') between the City and AmerenUE. The Lease term will be the
same as the final maturity of the Bond and will be a net lease, with
AmerenUE being responsible for rental payments in an amount sufficient
to pay the debt service on the Bond, equal to approximately $9.2
million per year. Under the Lease, AmerenUE will be responsible for
maintaining, insuring, operating and paying any taxes related to the
Project. AmerenUE will have the option, at any time during the term of
the Lease, at the expiration of the twenty-year Lease, or if there is
an early termination of the Grant Agreement, to purchase Bowling
Green's interest in the Project and the Site upon providing for the
payment of the principal balance of and interest on the Bond and the
payment of a nominal fee to Bowling Green. AmerenUE will record the
Lease as a capital lease on its accounting books and records.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-28987 Filed 11-14-02; 8:45 am]
BILLING CODE 8010-01-P