[Federal Register: May 22, 2003 (Volume 68, Number 99)]
[Notices]
[Page 28037-28038]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22my03-114]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27679]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
May 16, 2003.
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 June 10, 2003, 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 June 10, 2003, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Unitil Corporation et al. (70-10120)
Unitil Corporation (``Unitil''), 6 Liberty Lane West, Hampton, New
Hampshire, 03842-1270, a registered holding company under the Act, and
its wholly owned subsidiary companies, Fitchburg Gas and Electric Light
Company (``Fitchburg''), Unitil Energy Systems, Inc., Unitil Power
Corp., Unitil Realty Corp., Unitil Resources, Inc. and Unitil Service
Corp. (``Unitil Service'') (the ``Subsidiaries'' or ``Money Pool
Participants'' and together with Unitil the ``Applicants'') have filed
an application-declaration under sections 6, 7, 9(a), 10 and 12(b) of
the Act and rules 43 and 45 thereunder.
By order dated June 9, 2000 (HCAR No. 27182), Applicants were
authorized to make unsecured short-term borrowings and to operate a
system money pool (``Money Pool'') through June 30, 2003. The
Applicants now request authority to make additional short-term
borrowings and extend the operation of the Money Pool through June 30,
2006 (``Authorization Period'').
Unitil requests authorization for short-term borrowing on a
revolving basis from certain banks up to an aggregate amount of
$55,000,000 from time to time through the Authorization Period.
In addition, Fitchburg requests authorization for short-term
borrowings from the Money Pool, and direct borrowings from commercial
banks, in an aggregate principal amount at any one time outstanding not
to exceed $35,000,000 from time to time through the Authorization
Period.
Unitil believes that an increase to its borrowing authority is
beneficial because it will allow the company to respond to increased
working capital requirements as a result of commodity volatility and
restructuring charges, as well as necessary facility system
improvements and growth.
Unitil's existing and proposed borrowing arrangements will provide
for borrowings at (1) ``base'' or ``prime'' rates publicly announced by
a bank as the rate charged on loans to its most creditworthy business
firms; or (2) ``money market'' rates (market-based rates that are
generally lower than base or prime rates, made available by banks on an
offering or ``when available'' basis). In addition, borrowings may be
based on the daily federal funds rate. Borrowings under the credit
arrangements will mature not more than nine months from the date of
issue. In the future, the Company may choose to formalize its banking
relationship with its banks through a syndicated credit facility. The
duration of any such facility would not exceed 365 days.
Unitil expects to use the proceeds from the requested borrowings
for (1) loans or advances to subsidiaries through the Money Pool; (2)
payment of
[[Page 28038]]
outstanding indebtedness; (3) short-term cash needs that may arise due
to payment timing differences; and (4) other general corporate
purposes.
Any of the proposed short-term borrowings by Fitchburg from
commercial banks will be under terms and conditions substantially
similar to those of the borrowing arrangements between Unitil and its
commercial bank lenders, described above. Fitchburg will use the
proceeds from these borrowings to meet working capital requirements,
provide interim financing for construction expenditures, and to meet
debt and preferred stock sinking fund requirements.
In connection with the continued use of the Money Pool by the
Applicants under the Cash Pooling and Loan Agreement (``Pooling
Agreement'') among Unitil and the Money Pool Participants dated as of
February 1, 1985, as amended, Fitchburg requests authorization to make
loans to the other Money Pool Participants and incur borrowings from
Unitil and the other Money Pool Participants, and the Applicants
request authorization to make loans to Fitchburg, both through the
Authorization Period. Under the Pooling Agreement, Unitil and the
Subsidiaries invest their surplus funds, and the Subsidiaries borrow
funds, from the money pool. Unitil Service administers the money pool
on an ``at cost'' basis. The purpose of the Money Pool is to provide
the Subsidiaries with internal and external funds and to invest surplus
funds of Unitil and the Subsidiaries in short-term money market
instruments. The Applicants state that the Money Pool provides the
Subsidiaries with lower short-term borrowing costs due to elimination
of banking fees; a mechanism to earn a higher return on interest from
surplus funds that are loaned to other Subsidiaries; and decreased
reliance on external funding sources.
Applicants state that the authorization sought shall be conditioned
on Unitil, Unitil Energy and Fitchburg maintaining a common equity (as
reflected in the most recent 10-K or 10-Q filed with the Commission
under the Securities Exchange Act of 1934, as amended (``1934 Act''),
adjusted to reflect changes in capitalization since the balance sheet
date therein) of at least 30% of its consolidated capitalization
(common equity, preferred stock, long-term and short-term debt) during
the period of authorization. In addition, no borrowings under bank
credit facilities may be made in reliance upon any order issued in this
matter unless: (i) The debt security to be issued, if rated, is rated
investment grade; (ii) all outstanding securities of the issuer that
are rated are rated investment grade; and (iii) all outstanding
securities of Unitil that are rated are rated investment grade.
For purposes of this condition, a security will be considered rated
investment grade if it is rated investment grade 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
1934 Act.
For the Commission by the Division of Investment Management,
pursuant to delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 03-12809 Filed 5-21-03; 8:45 am]
BILLING CODE 8010-01-M