<PAGE>
Prospectus Supplement
(To Prospectus dated April 27, 1998)
THE UNION LIGHT, HEAT AND POWER COMPANY
$20,000,000
6.11% DEBENTURES DUE 2003
The Debentures due 2003 will mature on December 8, 2003. We will pay interest on
the Debentures on June 8 and December 8 of each year. The first such payment
will be made on June 8, 1999. We may redeem the Debentures at any time before
maturity. The Debentures will not be subject to any sinking fund.
----------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS ARE TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------
<TABLE>
<CAPTION>
PER DEBENTURE TOTAL
<S> <C> <C>
Initial public offering price............................ 100.00% $20,000,000
Underwriting Discounts and Commissions................... .50% $ 100,000
Proceeds, before expenses, to Company.................... 99.50% $19,900,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Debentures will accrue from December 8, 1998
and must be paid by the purchaser as part of the initial public offering price
if the Debentures are delivered after December 8, 1998.
----------------------------------------------------
The Underwriter expects to deliver the Debentures, in book-entry form, through
the Depository Trust Company on or about December 8, 1998. Purchasers must pay
for the Debentures in immediately available funds.
FIRST CHICAGO CAPITAL MARKETS, INC.
The date of this Prospectus Supplement is November 30, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
Incorporation of Certain Documents by Reference....................................... S-3
Selected Financial Information........................................................ S-4
Use of Proceeds....................................................................... S-5
Certain Terms of the Debentures....................................................... S-5
Underwriting.......................................................................... S-7
PROSPECTUS
Available Information................................................................. 2
Incorporation of Certain Documents by Reference....................................... 2
The Company........................................................................... 3
Use of Proceeds....................................................................... 3
Ratio of Earnings to Fixed Charges.................................................... 3
Description of Debt Securities........................................................ 3
Plan of Distribution.................................................................. 9
Legal Opinions........................................................................ 10
</TABLE>
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read carefully this Prospectus Supplement along with the
accompanying Prospectus before you invest. Both documents contain important
information you should consider when making your investment decision. This
Prospectus Supplement contains information about the Debentures and the
accompanying Prospectus contains information about the Company and our debt
securities generally. This Prospectus Supplement may add, update or change
information in the accompanying Prospectus. You should rely only on the
information contained or incorporated by reference in this Prospectus Supplement
and the accompanying Prospectus. You should assume that the information
appearing in this Prospectus Supplement or the accompanying Prospectus, as well
as the information we previously filed with the Securities and Exchange
Commission and incorporated by reference, is current only as of its respective
date. We are not, and the Underwriter is not, making an offer to sell these
securities in any jurisdiction where the offer or sale of such securities is not
permitted. We have not authorized anyone else to provide you with information
different from that contained in this Prospectus Supplement and the accompanying
Prospectus. In this Prospectus Supplement and the accompanying Prospectus,
"Union Light," the "Company," "we," "us" and "our" refer to The Union Light,
Heat and Power Company.
S-2
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this Prospectus
Supplement, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede the information in this
Prospectus Supplement. We incorporate by reference the documents listed below
and any future filings made with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") until we sell all of the Debentures.
<TABLE>
<S> <C>
(i) Union Light's Quarterly Reports on Form 10-Q Quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998
</TABLE>
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
William Sheafer
Vice President and Treasurer
The Union Light, Heat and Power Company
139 East Fourth Street
Cincinnati, Ohio, 45202
(513) 421-9500
S-3
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SELECTED FINANCIAL INFORMATION
The following tables set forth certain financial information of Union Light.
This information is derived from the historical results of the Company. See
"Available Information" in the accompanying Prospectus. All amounts are in
thousands except the ratio of earnings to fixed charges.
SELECTED INCOME INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS
ENDED 12 MONTHS ENDED DECEMBER 31,
SEPTEMBER 30, ---------------------------------------------------------------
1998 1997 1996 1995 1994 1993
------------- ---------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(THOUSANDS, EXCEPT RATIOS)
Operating Revenues........................... $ 189,086 $ 271,622 $ 267,768 $ 257,468 $ 249,535 $ 251,456
Operating Income............................. $ 15,423 $ 18,435 $ 21,034 $ 19,830 $ 16,390 $ 17,936
Interest Charges--Net........................ $ 3,328 $ 4,768 $ 4,661 $ 7,691 $ 8,373 $ 8,360
Net Income................................... $ 6,626 $ 12,917 $ 14,596 $ 12,172 $ 8,387 $ 9,339
Ratio of Earnings to Fixed Charges........... 3.73 5.09 4.98 3.05 2.31 2.46
</TABLE>
For the purpose of computing our ratio of earnings to fixed charges,
earnings consist of pretax income from continuing operations plus fixed charges.
Fixed charges consist of (i) interest expense, (ii) amortized premiums,
discounts and capitalized expenses related to indebtedness and (iii) an estimate
of the interest within rental expense.
CAPITALIZATION
<TABLE>
<CAPTION>
OUTSTANDING SEPTEMBER 30, 1998
---------------------------------------
% OF CAPITALIZATION
AMOUNT -------------------
----------------
(THOUSANDS)
<S> <C> <C>
Total debt........................................ $ 94,278 43.1%
Common stock equity............................... 124,563 56.9
---------------- -----
Total capitalization.......................... $ 218,841 100.0%
---------------- -----
---------------- -----
</TABLE>
S-4
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USE OF PROCEEDS
We plan to add the net proceeds from the sale of the Debentures to our
general funds and to use such funds to repay a portion of our short-term
indebtedness incurred in connection with our construction program.
CERTAIN TERMS OF THE DEBENTURES
The following description of the particular terms of the Debentures
supplements the description of the general terms and provisions of the
Debentures set forth in the accompanying Prospectus under the caption
"Description of Debt Securities".
PRINCIPAL AMOUNT, INTEREST AND MATURITY
We are issuing $20,000,000 of Debentures which will mature on December 8,
2003. The Debentures will be issued under the Indenture dated as of July 1, 1995
between the Company and The Fifth Third Bank, as Trustee (the "Trustee"), as
supplemented by a Third Supplemental Indenture dated as of December 8, 1998. The
Debentures will be designated as specified on the cover of this Prospectus
Supplement. The Debentures will be limited to a total of $20,000,000 aggregate
principal amount.
We will pay interest at an annual rate of 6.11% on the Debentures on June 8
and December 8 of each year beginning June 8, 1999. Interest will accrue from
December 8, 1998. The amount of interest payable for any period will be computed
based on a 360-day year of twelve 30-day months.
Interest will be paid to holders of record on the business day immediately
preceding the interest payment date. A business day shall be any day other than
a day that banking institutions in the City of New York are authorized or
obligated to close.
Principal of, premium (if any) and interest on the Debentures will initially
be payable and the Debentures will be transferable at the corporate trust office
of the Trustee in the City of Cincinnati, located at 38 Fountain Square Plaza,
Cincinnati, Ohio 45263, provided that payment of interest may be made at the
option of the Company by checks mailed to the registered holders of the
Debentures.
The Debentures will not be secured and will rank equally with any other
indebtedness which is issued under the Indenture and not specifically
subordinated to the Debentures.
REDEMPTION
Subject to the terms of the Indenture, we will have the right to redeem the
Debentures, in whole but not in part, from time to time and at any time (such
redemption, an "Optional Redemption", and the date thereof, the "Optional
Redemption Date") upon not less than 30 days' notice to the holders, at a
redemption price equal to the sum of (A) the greater of (i) 100% of the
principal amount of the Debentures to be redeemed or (ii) the sum of the present
values of the Remaining Scheduled Payments thereon discounted to the Optional
Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 15 basis points, less the
Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest
Amount.
"Applicable Accrued Interest Amount" means, at the Optional Redemption Date,
the amount of interest accrued and unpaid from the prior interest payment date
to the Optional Redemption Date on the Debentures subject to the Optional
Redemption determined at the rate per annum shown in the title thereof, computed
on the basis of a 360-day year of twelve 30-day months.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity
S-5
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to the remaining term of the Debentures to be redeemed pursuant to the Optional
Redemption. "Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to the Optional Redemption
Date, the average of the Reference Treasury Dealer Quotations for such Optional
Redemption Date.
"Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any Debenture, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the Optional Redemption Date but for
the Optional Redemption.
"Treasury Rate" means, with respect to the Optional Redemption Date (if
any), the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Optional Redemption Date.
The Debentures will not be redeemable at the option of any holder prior to
maturity and will not be subject to any sinking fund.
GLOBAL SECURITIES
We will issue the Debentures in book-entry only form, which means that they
will be represented by one permanent global certificate registered in the name
of The Depository Trust Company, New York, New York ("DTC"), or its nominee. We
will refer to this form here as "book-entry only."
DTC will keep a computerized record of its participants (for example, your
broker) whose clients purchased the Debentures. The participant will then keep a
record of its clients who purchased the Debentures. The global certificate
representing the Debentures may not be transferred, except that DTC, its
nominees and their successors may transfer the entire global certificate to one
another.
By using book-entry only form, we will not issue certificates to individual
holders of the Debentures or register the ownership interests in the Debentures
of such individual holders. Beneficial interests in the global certificate will
be shown on, and transfers of interests in the global certificate will be made
only through, records maintained by DTC and its participants.
DTC has provided us with the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the United States
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under Section
17A of the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Direct Participants") deposit with DTC. DTC also facilitates the
settlement among Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through computerized records for
Direct Participants' accounts. This eliminates the need to exchange
certificates. Direct Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations, such as
securities brokers and dealers, banks and trust companies that work through a
Direct Participant. The rules that apply to DTC and its participants are on file
with the Securities and Exchange Commission.
S-6
<PAGE>
DTC is owned by a number of its Direct Participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. The Company
and the Trustee will treat DTC's nominee as the owner of the global certificate
for all purposes. Accordingly, we will have no direct responsibility or
liability to pay amounts due on the Debentures to owners of beneficial interests
in the global certificate.
It is DTC's current practice, upon receipt of any payment of principal and
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global certificate
as shown on DTC's records. In addition, it is DTC's current practice to assign
any consenting or voting rights to Direct Participants whose accounts are
credited with Debentures on a record date by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global certificate, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with securities
held for the account of customers registered in "street name." However, these
payments will be the responsibility of the participants and not of DTC, the
Trustee or the Company.
Debentures represented by the global certificate will be exchangeable for
Debenture certificates with the same terms in authorized denominations only if:
- DTC notifies us that it is unwilling or unable to continue as depository
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depository is not appointed by us within 90 days;
- We instruct the Trustee that the global certificate is now exchangeable;
or
- An event of default under the Indenture has occurred and is continuing.
A further description of the Depositary's procedures with respect to the
Debentures is set forth under "Description of Debt Securities--Global Debt
Securities" in the accompanying Prospectus.
DEFEASANCE
The Debentures will be subject to defeasance and covenant defeasance as
provided under the caption "Description of Debt Securities--Defeasance and
Covenant Defeasance" in the accompanying Prospectus.
UNDERWRITING
The Company and First Chicago Capital Markets, Inc. (the "Underwriter") have
entered into an underwriting agreement dated November 30, 1998 with respect to
the offering of the Debentures. Subject to certain conditions, the Underwriter
has agreed to purchase from us the $20,000,000 principal amount of Debentures.
If all the conditions under the underwriting agreement have been met, the
Underwriter will purchase all of the Debentures if any are purchased.
Debentures sold by the Underwriter to the public will initially be offered
at the initial public offering price set forth on the cover of this Prospectus
Supplement.
The Debentures are a new issue of securities with no established trading
market. No assurance can be given as to the liquidity of the trading market for
the Debentures.
In order to facilitate the offering of the Debentures, the Underwriter may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debentures. Specifically, the Underwriter may overallot in connection with
the offering, creating a short position for its own account. In addition, to
cover overallotments or to stabilize the price of the Debentures, the
Underwriter may bid for, and purchase, the
S-7
<PAGE>
Debentures in the open market. Any of these activities may stabilize or maintain
the market price of the Debentures above independent market levels. The
Underwriter is not required to engage in these activities, and may end any of
these activities at any time. These transactions may be effected in the
over-the-counter market or otherwise.
We estimate that our share of the total expenses of the offering, excluding
the underwriting discounts and commissions, will be approximately $80,000.
An affiliate of the Underwriter engages in various general financing and
banking transactions with our affiliates in the ordinary course of business.
We have agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
S-8
<PAGE>
PROSPECTUS
THE UNION LIGHT, HEAT AND POWER COMPANY
DEBT SECURITIES
-----------------
THE UNION LIGHT, HEAT AND POWER COMPANY ("UNION LIGHT" OR THE "COMPANY")
INTENDS FROM TIME TO TIME TO ISSUE UP TO $55,000,000 AGGREGATE PRINCIPAL
AMOUNT OF UNSECURED DEBT SECURITIES (THE "DEBT SECURITIES") IN ONE OR MORE
SERIES ON TERMS TO BE DETERMINED AT THE TIME OR TIMES OF SALE. FOR EACH
ISSUE OF THE DEBT SECURITIES FOR WHICH THIS PROSPECTUS IS BEING
DELIVERED (THE "OFFERED SECURITIES") THERE WILL BE AN ACCOMPANYING
PROSPECTUS SUPPLEMENT (THE "PROSPECTUS SUPPLEMENT") THAT SETS
FORTH, WITHOUT LIMITATION AND TO THE EXTENT APPLICABLE, THE
SPECIFIC DESIGNATION, AGGREGATE PRINCIPAL AMOUNT,
DENOMINATION, MATURITY, PREMIUM, IF ANY, RATE OF INTEREST
(WHICH MAY BE FIXED OR VARIABLE) OR METHOD OF
CALCULATION THEREOF, TIME OF PAYMENT OF INTEREST,
ANY TERMS FOR REDEMPTION, ANY SINKING FUND
PROVISIONS, ANY SUBORDINATION PROVISIONS, THE
INITIAL PUBLIC OFFERING PRICE, THE NAMES OF
ANY UNDERWRITERS OR AGENTS, THE PRINCIPAL
AMOUNTS, IF ANY, TO BE PURCHASED BY THE
UNDERWRITERS, THE COMPENSATION OF
SUCH UNDERWRITERS OR AGENTS, AND
ANY OTHER SPECIAL TERMS OF THE
OFFERED SECURITIES.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
UNION LIGHT MAY SELL THE DEBT SECURITIES THROUGH UNDERWRITERS, DEALERS OR
AGENTS, OR DIRECTLY TO ONE OR A LIMITED NUMBER OF PURCHASERS. THE PROSPECTUS
SUPPLEMENT WILL SET FORTH THE NAMES OF UNDERWRITERS, DEALERS OR AGENTS, IF ANY,
ANY APPLICABLE COMMISSIONS OR DISCOUNTS AND THE NET PROCEEDS TO UNION LIGHT FROM
THE SALE OF THE OFFERED SECURITIES.
APRIL 27, 1998
<PAGE>
AVAILABLE INFORMATION
UNION LIGHT IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND ACCORDINGLY FILES REPORTS AND
OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION"). INFORMATION CONCERNING DIRECTORS AND OFFICERS, THEIR
REMUNERATION, AND ANY MATERIAL INTEREST OF SUCH PERSONS IN TRANSACTIONS WITH
UNION LIGHT, AS OF PARTICULAR DATES, IS DISCLOSED IN UNION LIGHT'S ANNUAL REPORT
ON FORM 10-K FILED WITH THE COMMISSION. SUCH REPORTS AND OTHER INFORMATION CAN
BE INSPECTED AND COPIED AT THE PUBLIC REFERENCE FACILITIES MAINTAINED BY THE
COMMISSION AT ROOM 1024, 450 FIFTH STREET, N.W., WASHINGTON, D.C.; SUITE 1400,
500 WEST MADISON STREET, CHICAGO, ILLINOIS; AND SUITE 1300, SEVEN WORLD TRADE
CENTER, NEW YORK, N.Y. COPIES OF SUCH MATERIAL CAN ALSO BE OBTAINED FROM THE
PUBLIC REFERENCE SECTION OF THE COMMISSION AT ITS PRINCIPAL OFFICE AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549 AT PRESCRIBED RATES, OR FROM THE
COMMISSION'S INTERNET WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, SUCH MATERIAL
CAN ALSO BE INSPECTED AT THE OFFICES OF THE NEW YORK STOCK EXCHANGE AND THE
CINCINNATI STOCK EXCHANGE.
UNION LIGHT'S PRINCIPAL EXECUTIVE AND BUSINESS OFFICE IS LOCATED AT 139 EAST
FOURTH STREET, CINCINNATI, OHIO 45202 (TELEPHONE 513-421-9500).
-------------------
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY UNION LIGHT OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
-------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is hereby incorporated in this Prospectus by reference the following
documents heretofore filed with the Securities and Exchange Commission:
1. Union Light's Annual Report on Form 10-K for the year ended December
31, 1997 filed pursuant to the Exchange Act.
All documents filed by Union Light pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated in this
Prospectus by reference and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which is deemed to be incorporated
by reference herein or in the Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
UNION LIGHT HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO MR. WILLIAM L. SHEAFER, VICE PRESIDENT AND TREASURER, THE UNION
LIGHT, HEAT AND POWER COMPANY, 139 EAST FOURTH STREET, CINCINNATI, OHIO 45202
(TELEPHONE 513-421-9500).
2
<PAGE>
THE COMPANY
Union Light (incorporated in Kentucky in 1901) is a wholly-owned subsidiary
of The Cincinnati Gas & Electric Company ("CG&E") and an affiliate of Cinergy
Corp. ("Cinergy"), a registered holding company under the Public Utility Holding
Company Act of 1935. Union Light is primarily engaged in the transmission,
distribution, and sale of electric energy and the sale and transportation of
natural gas in northern Kentucky. The area served with electricity, gas, or both
covers approximately 500 square miles, has an estimated population of 319,000,
and includes the cities of Covington and Newport in Kentucky.
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net proceeds
of the Offered Securities will be applied primarily to the redemption,
repurchase, repayment, or retirement of outstanding indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the years ended December
31, 1993 through 1997 were 2.46, 2.31, 3.05, 4.98 and 5.09, respectively.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities may be issued in one or more new series under an
Indenture between the Company and The Fifth Third Bank, as Trustee (the
"Trustee"). The following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its entirety by
reference to, the Indenture and the Debt Securities, the forms of which are
filed as exhibits to the registration statement of which this Prospectus forms a
part. Whenever particular provisions or defined terms in such documents are
referred to herein or in a Prospectus Supplement, such provisions or terms are
incorporated by reference herein or therein, as the case may be.
The Debt Securities will be unsecured obligations of the Company.
Reference is made to the Prospectus Supplement relating to any particular
issue of Offered Securities for the following terms, among others: (1) the title
of such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities or the series of which they are a part; (3) the date or dates on
which the principal of any of such Debt Securities will be payable; (4) the rate
or rates at which any of such Debt Securities will bear interest, if any, the
date or dates from which any such interest will accrue, the Interest Payment
Dates on which any such interest will be payable and the Regular Record Date for
any such interest payable on any Interest Payment Date; (5) the right, if any,
to extend interest payment periods and the duration of such extension; (6) the
place or places where the principal of and any premium and interest on any of
such Debt Securities will be payable; (7) the period or periods within which,
the price or prices at which and the terms and conditions on which any of such
Debt Securities may be redeemed, in whole or in part, at the option of the
Company; (8) the obligation, if any, of the Company to redeem or purchase any of
such Debt Securities pursuant to any sinking fund or analogous provision or at
the option of the Holder thereof, and the period or periods within which, the
price or prices at which and the terms and conditions on which any of such Debt
Securities will be redeemed or purchased, in whole or in part, pursuant to any
such obligation; (9) the denominations in which any of such Debt Securities will
be issuable; (10) if the amount of principal of or any premium or interest on
any of such Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined; (11)
if applicable, that such Debt Securities, in whole or any specified part, are
defeasible pursuant to the provisions of the Indenture described under
"Defeasance and Covenant Defeasance"; (12) whether any of such Debt Securities
will be issuable in whole or in part in the form of one or more Global Debt
Securities and, if so, the
3
<PAGE>
respective Depositaries for such Global Debt Securities, the form of any legend
or legends to be borne by any such Global Debt Security in addition to or in
lieu of the legend referred to under "Form, Exchange and Transfer--Global Debt
Securities" and, if different from those described under such caption, any
circumstances under which any such Global Debt Security may be exchanged in
whole or in part for Debt Securities registered, and any transfer of such Global
Debt Security in whole or in part may be registered, in the names of Persons
other than the Depositary for such Global Debt Security or its nominee; (13) any
addition to or change in the Events of Default applicable to any of such Debt
Securities and any change in the right of the Trustee or the Holders to declare
the principal amount of any of such Debt Securities due and payable; (14) any
addition to or change in the covenants in the Indenture; (15) the applicability
of or any change in the subordination provisions of the Indenture for a series
of Debt Securities; and (16) any other terms of such Debt Securities not
inconsistent with the provisions of the Indenture. (Section 301).
Except as otherwise described in the Prospectus Supplement, the covenants
contained in the Indenture would not afford holders of Debt Securities
protection in the event of a highly-leveraged transaction involving the Company.
FORM, EXCHANGE, AND TRANSFER
The Debt Securities of each series will be issuable only in fully registered
form without coupons. (Section 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Debt Securities, Debt Securities of any series
will be exchangeable for other Debt Securities of the same series, of any
authorized denomination and of like tenor and aggregate principal amount.
(Section 305).
Subject to the terms of the Indenture and the limitations applicable to
Global Debt Securities, Debt Securities may be presented for exchange as
provided above or for registration of transfer (duly endorsed or with the form
of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in addition
to the Security Registrar) initially designated by the Company for any Debt
Securities will be named in the applicable Prospectus Supplement. (Section 305).
The Company may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the Company will be required to
maintain a transfer agent in each Place of Payment for the Debt Securities of
each series. (Section 1002).
If the Debt Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company will not be required to (i) issue,
register the transfer of, or exchange any Debt Security of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security that may be selected for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Debt Security so selected for redemption, in whole
or in part, except the unredeemed portion of any such Debt Security being
redeemed in part. (Section 305).
GLOBAL DEBT SECURITIES
Some or all of the Debt Securities of any series may be issued as Global
Debt Securities. Each Global Debt Security will be registered in the name of a
Depositary or a nominee thereof identified in the applicable
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Prospectus Supplement, will be deposited with such Depositary or nominee or a
custodian therefor and will bear a legend regarding the restrictions on
exchanges and registration of transfer thereof referred to below and any such
other matters as may be provided for pursuant to the Indenture.
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Debt Security may be exchanged in whole or in part
for Debt Securities registered, and no transfer of a Global Debt Security in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Debt Security or any nominee of such Depositary
unless (i) the Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Debt Security or has ceased to
be qualified to act as such as required by the Indenture, (ii) there shall have
occurred and be continuing an Event of Default with respect to such Global Debt
Security or (iii) there shall exist such circumstances, if any, in addition to
or in lieu of those described above as may be described in the applicable
Prospectus Supplement. All securities issued in exchange for a Global Debt
Security or any portion thereof will be registered in such names as the
Depositary may direct. (Sections 204 and 305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Debt Security, the Depositary or such nominee, as the case may be, will
be considered the sole owner and Holder of such Global Debt Security for all
purposes under the Debt Securities and the Indenture. Except in the limited
circumstances referred to above, owners of beneficial interests in a Global Debt
Security will not be entitled to have such Global Debt Security or any portion
thereof registered in their names, will not receive or be entitled to receive
physical delivery of certificated Debt Securities in exchange therefor and will
not be considered to be the owners or Holders of such Global Debt Security or
any portion thereof for any purpose under the Debt Securities or the Indenture.
All payments of principal of and any premium and interest on a Global Debt
Security will be made to the Depositary or its nominee, as the case may be, as
the Holder thereof. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. These laws may impair the ability to transfer beneficial interests in a
Global Debt Security.
Ownership of beneficial interests in a Global Debt Security will be limited
to institutions that have accounts with the Depositary or its nominee (the
"Participants") and to persons that may hold beneficial interests through
Participants. In connection with the issuance of any Global Debt Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective portion of the principal amounts of the Global Debt Security to the
accounts of its Participants. Ownership of beneficial interests in a Global Debt
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to Participants' interests) or any such Participant (with respect to
interests of persons held by such Participants on their behalf). Payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Debt Security are subject to various policies and procedures adopted by
the Depositary from time to time. None of the Company, the Trustee or any agent
of the Company or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any Participant's records relating to, or for
payments made on account of, beneficial interests in a Global Debt Security, or
for maintaining, supervising, or reviewing any records relating to such
beneficial interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Debt Security, in some cases, will trade in the Depositary's
same-day funds settlement system in which secondary market trading activity in
those beneficial interests are required by the Depositary to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity in
such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Debt Security upon the original issuance thereof may be
required to be made in immediately available funds.
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PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register. Unless otherwise indicated in the applicable Prospectus Supplement,
the corporate trust office of the Trustee in the City of Cincinnati will be
designated as the Company's sole Paying Agent for payments with respect to Debt
Securities of each series. Any other Paying Agents initially designated by the
Company for the Debt Securities of a particular series will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Company will be required to maintain a Paying Agent in each Place of Payment
for the Debt Securities of a particular series. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of 18 months after such principal, premium or interest has
become due and payable will be repaid to the Company, and the Holder of such
Debt Security thereafter may look only to the Company for payment thereof.
(Section 1003).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Indenture does not contain any covenant that restricts the Company's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions, provided that the successor
corporation assumes due and punctual payment of principal or premium, if any,
and interest on the Debt Securities. (Section 801).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of that series when due; (b)
failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform any
other covenant of the Company in the Indenture (other than a covenant included
in the Indenture solely for the benefit of a series other than that series),
continued for 90 days after written notice has been given by the Trustee, or the
Holders of at least 35% in principal amount of the Outstanding Debt Securities
of that series, as provided in the Indenture; and (e) certain events of
bankruptcy, insolvency or reorganization. (Section 501).
If an Event of Default (other than an Event of Default described in clause
(e) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 35% in aggregate principal amount of the Outstanding Debt Securities of
that series by notice as provided in the Indenture may declare the principal
amount of the Debt Securities of that series to be due and payable immediately.
If an Event of Default described in clause (e) above with respect to the Debt
Securities of any series at the time Outstanding shall occur, the principal
amount of all the Debt Securities of that series will automatically, and without
any action by the Trustee or any Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of
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that series may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal, have been cured or waived as provided in the Indenture. (Section
502). For information as to waiver of defaults, see "Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonably satisfactory indemnity. (Section
603). Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Debt Securities
of that series. (Section 512).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 35% in aggregate principal amount of the Outstanding Debt Securities
of that series have made written request, and such Holder or Holders have
offered reasonably satisfactory indemnity, to the Trustee to institute such
proceeding as trustee and (iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of that series a direction
inconsistent with such request, within 60 days after such notice, request and
offer. (Section 507). However, such limitations do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of payment of the
principal of or any premium or interest on such Debt Security on or after the
applicable due date specified in such Debt Security. (Section 508).
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their knowledge,
is in default in the performance or observance of any of the terms, provisions
and conditions of the Indenture and, if so, specifying all such known defaults.
(Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on, any
Debt Security, (c) reduce the amount of principal of an Original Issue Discount
Security or any other Debt Security payable upon acceleration of the Maturity
thereof, (d) change the place or currency of payment of principal of, or any
premium or interest on, any Debt Security, (e) affect the applicability of the
subordination provisions to any Debt Security, (f) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt Security,
(g) reduce the percentage in principal amount of Outstanding Debt Securities of
any series, the consent of whose Holders is required for modification or
amendment of the Indenture, reduce the percentage in principal amount of
Outstanding Debt Securities of any series necessary for waiver of compliance
with certain provisions of the Indenture or for waiver of certain defaults or
modify such provisions with respect to modification and waiver. (Section 902).
The Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may waive compliance by the Company
with certain restrictive provisions of the Indenture. (Section 1007). The
Holders of a majority in principal amount of the Outstanding Debt Securities
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of any series may waive any past default under the Indenture, except a default
in the payment of principal, premium, or interest and certain covenants and
provisions of the Indenture which cannot be amended without the consent of the
Holder of each Outstanding Debt Security of such series affected. (Section 513).
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities of any series entitled to give or take any
direction, notice, consent, waiver, or other action under the Indenture, in the
manner and subject to the limitations provided in the Indenture. In certain
limited circumstances, the Trustee will be entitled to set a record date for
action by Holders. If a record date is set for any action to be taken by Holders
of a particular series, such action may be taken only by persons who are Holders
of Outstanding Debt Securities of that series on the record date. To be
effective, such action must be taken by Holders of the requisite principal
amount of such Debt Securities within a specified period following the record
date. For any particular record date, this period will be 180 days or such other
shorter period as may be specified by the Company (or the Trustee, if it set the
record date), and may be shortened or lengthened (but not beyond 180 days) from
time to time. (Section 104).
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement, the
Company may elect, at its option at any time, to have the provisions of Section
1302, relating to defeasance and discharge of indebtedness, or Section 1303,
relating to defeasance of certain restrictive covenants in the Indenture,
applied to the Debt Securities or to the Debt Securities of any series. (Section
1301).
DEFEASANCE AND DISCHARGE. The Indenture provides that, upon the Company's
exercise of its option (if any) to have Section 1302 applied to any Debt
Securities, the Company will be discharged from all its obligations with respect
to such Debt Securities (except for certain obligations to exchange or register
the transfer of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold moneys for payment in trust)
upon the deposit in trust for the benefit of the Holders of such Debt Securities
of money or U.S. Government Obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will
provide money in an amount sufficient to pay the principal of and any premium
and interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Debt Securities. Such
defeasance or discharge may occur only if, among other things, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the Company
has received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in either case
to the effect that Holders of such Debt Securities will not recognize gain or
loss for federal income tax purposes as a result of such deposit, defeasance,
and discharge and will be subject to federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge were not to occur. (Sections 1302 and 1304).
DEFEASANCE OF CERTAIN COVENANTS. The Indenture provides that, upon the
Company's exercise of its option (if any) to have Section 1303 applied to any
Debt Securities, the Company may omit to comply with certain restrictive
covenants that may be described in the applicable Prospectus Supplement, and the
occurrence of certain Events of Default, which are described above in clause (d)
(with respect to such restrictive covenants) under "Events of Default" and any
that may be described in the applicable Prospectus Supplement, will be deemed
not to be or result in an Event of Default, in each case with respect to such
Debt Securities. The Company, in order to exercise such option, will be required
to deposit, in trust for the benefit of the Holders of such Debt Securities,
money or U.S. Government Obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will
provide money in an amount sufficient to pay the principal of and any premium
and interest on such Debt Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Debt Securities. The Company
will also be required, among other things, to deliver to the Trustee an Opinion
of Counsel to the effect that Holders of such Debt Securities will not recognize
gain or loss for federal income tax purposes as
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a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and defeasance were not
to occur. In the event the Company exercised this option with respect to any
Debt Securities and such Debt Securities were declared due and payable because
of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations so deposited in trust would be sufficient to pay amounts
due on such Debt Securities at the time of their respective Stated Maturities
but may not be sufficient to pay amounts due on such Debt Securities upon any
acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments. (Sections 1303 and 1304).
TITLE
The Company, the Trustee, and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of making payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112).
CONCERNING THE TRUSTEE
The Fifth Third Bank is the Trustee under the Indenture. The Fifth Third
Bank also acts as the Trustee for certain unsecured debt securities of CG&E and
PSI Energy, Inc. ("PSI"), an affiliate of Union Light, is the Trustee for
certain pollution control revenue bonds of CG&E and PSI, acts as registrar for
preferred stock of CG&E and PSI and for the common stock of Cinergy, and is the
transfer agent for the capital stock of Union Light. The Fifth Third Bank makes
loans to, acts as depositary for, and, in the normal course of business, also
performs other services for Union Light, CG&E and PSI.
PLAN OF DISTRIBUTION
Union Light may sell the Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or to a
single purchaser; or (iii) through agents. The Prospectus Supplement with
respect to the Offered Securities sets forth the terms of the offering of the
Offered Securities, including the name or names of any underwriters, dealers or
agents, the purchase price of such Offered Securities and the proceeds to Union
Light from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
underwriters with respect to a particular Underwritten Offering of Offered
Securities will be named in the Prospectus Supplement relating to such offering
and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover page of such Prospectus Supplement.
In connection with the sale of Offered Securities, the underwriters may receive
compensation from Union Light or from purchasers in the form of discounts,
concessions or commissions. The underwriters will be, and any dealers
participating in the distribution of the Offered Securities may be, deemed to be
underwriters within the meaning of the Securities Act of 1933. Union Light has
agreed to indemnify the underwriters against certain civil liabilities,
including liabilities under the Securities Act of 1933. The underwriting
agreement
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pursuant to which any Offered Securities are to be sold will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters will be obligated to purchase all of the Offered
Securities if any are purchased.
Offered Securities may be sold directly by Union Light or through agents
designated by Union Light from time to time. The Prospectus Supplement sets
forth the name of any agent involved in the offer or sale of the Offered
Securities in respect of which the Prospectus Supplement is delivered as well as
any commissions payable by Union Light to such agent. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, Union Light will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Securities from Union Light at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
The balance sheets of Union Light as of December 31, 1997 and 1996 and the
related statements of income, changes in common stock equity and cash flows for
each of the three years in the period ended December 31, 1997, included in Union
Light's Annual Report on Form 10-K for the year ended December 31, 1997, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated herein by
reference in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report.
LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for Union Light by
Taft, Stettinius & Hollister LLP, Star Bank Center, Cincinnati, Ohio 45202, and
for the Underwriters by Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017, who may rely as to matters of Kentucky law on the opinion of
Taft, Stettinius & Hollister LLP.
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