<PAGE> 1
Filed Pursuant to Rule 424(B)(2)
File No. 333-94735
Prospectus Supplement to Prospectus dated January 28, 2000.
$200,000,000
LOGO
8% NOTES DUE FEBRUARY 15, 2010
------------------------
NSTAR will pay interest on the notes on February 15 and August 15 of each
year. The first interest payment will be made on February 15, 2001. The notes
will be issued in denominations of $1,000 and integral multiples of $1,000.
NSTAR may redeem the notes in whole or in part at any time at the
redemption prices set forth in this prospectus supplement.
These notes form a single series and are fungible with NSTAR's 8% notes due
February 15, 2010 issued on February 15, 2000 in the amount of $300,000,000.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- -----
<S> <C> <C>
Initial price to public..................................... 99.549% $199,098,000
Underwriting discount....................................... 0.650% $ 1,300,000
Proceeds, before expenses, to NSTAR......................... 98.899% $197,798,000
</TABLE>
The initial price to public set forth above does not include interest
accrued on the notes from August 15, 2000 to the date they are delivered. That
accrued interest must be paid by the purchasers and the underwriters.
------------------------
The underwriters expect to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on October 6, 2000.
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FLEET SECURITIES, INC.
------------------------
Prospectus Supplement dated October 3, 2000.
<PAGE> 2
THE COMPANY
NSTAR is an energy delivery holding company serving approximately 1.3
million customers in Massachusetts. NSTAR was created to be the parent holding
company for BEC Energy and Commonwealth Energy System pursuant to an agreement
and plan of merger effective August 25, 1999.
NSTAR conducts its business through operating subsidiaries. Our principal
subsidiaries are regulated utility companies and include:
- Boston Edison Company, Commonwealth Electric Company and Cambridge
Electric Light Company, three utility companies that combined provide
electricity to approximately 1,040,000 customers in 81 communities
throughout Massachusetts, and
- Commonwealth Gas Company, a utility company that provides gas to
approximately 240,000 customers in 51 communities throughout
Massachusetts.
We also engage in non-utility and utility businesses through other
subsidiaries. These include Boston Energy Technology Group, Inc., which engages
in a number of businesses, including telecommunications through its joint
venture with RCN Telecom Services, Inc.; Canal Electric Company, which owns a
3.5% interest in the Seabrook 1 nuclear power plant; a company that operates a
steam, chilled water and electricity generating facility serving Boston area
hospitals and schools; a steam distribution company; a company that services and
processes liquefied natural gas; and five real estate trusts.
NSTAR was organized as a Massachusetts business trust with transferable
shares. We are an exempt public utility holding company under the provisions of
the Public Utility Holding Company Act of 1935. Our executive offices are
located at 800 Boylston Street, Boston, Massachusetts 02199 (telephone: (617)
424-2000).
USE OF PROCEEDS
We anticipate using the net proceeds to be received from the sale of the
notes to repay short-term debt, which was incurred primarily to finance capital
expenditures of non-regulated subsidiary companies, repurchase our common shares
and provide working capital.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges are as follows for the
five most recent fiscal years and the twelve months ended June 30, 2000:
<TABLE>
<CAPTION>
TWELVE MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE 30, --------------------------------------
2000 1999 1998 1997 1996 1995
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 2.08x(1) 2.29x(1) 2.74x 2.50x 2.42x 2.01x
</TABLE>
---------------
(1) Fixed charges include interest expense related to securitization of
approximately $44 million for the twelve months ended June 30, 2000 and
approximately $20 million for the year ended December 31, 1999. Excluding
securitization interest, the ratios of earnings to fixed charges would be
2.38x for the twelve months ended June 30, 2000 and 2.49x for the year ended
December 31, 1999.
S-2
<PAGE> 3
DESCRIPTION OF THE NOTES
GENERAL
You should read the following information in conjunction with the
statements under "Description of Debt Securities" in the accompanying
prospectus.
We are offering notes with an aggregate principal amount of $200,000,000,
which we refer to as the "new notes." The new notes form a single series and are
fungible with NSTAR's 8% notes due February 15, 2010 issued on February 15, 2000
in the amount of $300,000,000, which we refer to as the "original notes." We
refer to the entire $500,000,000 principal amount of the notes of this series as
the "8% notes."
We will issue the new notes under an indenture dated as of January 12, 2000
between NSTAR and Bank One Trust Company, N.A. as trustee, pursuant to which the
original notes also were issued. We will issue the new notes in denominations of
$1,000 and integral multiples of $1,000.
The 8% notes will mature on February 15, 2010. We will pay interest on the
8% notes at the rate of 8% per annum, computed on the basis of a 360-day year of
twelve 30-day months. Interest will be payable semi-annually on February 15 and
August 15 in each year and at maturity. We will make the first interest payment
on the new notes on February 15, 2001. We will make each interest payment to the
persons in whose names the 8% notes are registered at the close of business on
the February 1 or August 1 immediately preceding the interest payment date.
We will issue the new notes in the form of one or more global securities,
which will be deposited with The Depository Trust Company ("DTC") and registered
in the name of DTC's nominee. Information regarding DTC's book-entry system is
set forth under "Global Securities" in the accompanying prospectus.
Pursuant to the Trust Indenture Act of 1939, if a default occurs on the 8%
notes, Bank One Trust Company, N.A. will be required to resign as trustee unless
the default is cured, duly waived or otherwise eliminated within 90 days.
REDEMPTION AT OUR OPTION
We may, at our option, redeem the 8% notes in whole or in part at any time
at a redemption price equal to the greater of:
- 100% of the principal amount of the 8% notes to be redeemed, plus accrued
interest to the redemption date, or
- as determined by the Quotation Agent, the sum of the present values of
the remaining scheduled payments of principal and interest on the 8%
notes to be redeemed (not including any portion of payments of interest
accrued as of the redemption date) discounted to the redemption date on a
semi-annual basis at the Adjusted Treasury Rate plus 15 basis points,
plus accrued interest to the redemption date.
The redemption price will be calculated assuming a 360-day year consisting of
twelve 30-day months.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per year equal to the semi-annual 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 that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the 8% notes that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing
S-3
<PAGE> 4
new issues of corporate debt securities of comparable maturity to the remaining
term of the 8% notes.
"Comparable Treasury Price" means, with respect to any redemption date:
- the average of the Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of the Reference
Treasury Dealer Quotations, or
- if the trustee obtains fewer than three Reference Treasury Dealer
Quotations, the average of all Reference Treasury Dealer Quotations so
received.
"Quotation Agent" means the Reference Treasury Dealer appointed by us.
"Reference Treasury Dealer" means (i) each of Goldman, Sachs & Co., Salomon
Smith Barney Inc., Banc One Capital Markets, Inc., Credit Suisse First Boston
Corporation and Fleet Securities, Inc. and their respective successors, unless
any of them ceases to be a primary U.S. Government securities dealer in New York
City (a "Primary Treasury Dealer"), in which case we shall substitute another
Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by
us.
"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 that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.
We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each holder of the 8% notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the 8% notes or portions of
the 8% notes called for redemption.
The 8% notes will not be entitled to the benefit of a sinking fund.
S-4
<PAGE> 5
UNDERWRITING
NSTAR and the underwriters for the offering named below have entered into
an underwriting agreement with respect to the 8% notes and a pricing agreement
with respect to the new notes. Subject to certain conditions, each underwriter
has severally agreed to purchase the principal amount of new notes indicated in
the following table:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NEW NOTES
----------- ----------------
<S> <C>
Goldman, Sachs & Co........................................ $100,000,000
Salomon Smith Barney Inc................................... 40,000,000
Banc One Capital Markets, Inc.............................. 20,000,000
Credit Suisse First Boston Corporation..................... 20,000,000
Fleet Securities, Inc...................................... 20,000,000
------------
Total............................................ $200,000,000
============
</TABLE>
New notes sold by the underwriters to the public will initially be offered
at the initial price to public set forth on the cover of this prospectus
supplement. Any new notes sold by the underwriters to securities dealers may be
sold at a discount from the initial price to public of up to 0.40% of the
principal amount of new notes. Any such securities dealers may resell any new
notes purchased from the underwriters to certain other brokers or dealers at a
discount from the initial price to public of up to 0.25% of the principal amount
of new notes. If all of the new notes are not sold at the initial price to
public, the underwriters may change the initial price to public and the other
selling terms.
NSTAR has been advised by the underwriters that the underwriters intend to
make a market in the 8% notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the 8% notes.
In connection with the offering, the underwriters may purchase and sell 8%
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
8% notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the 8% notes while the
offering is in progress.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the underwriters have repurchased 8% notes sold
by or for the account of such underwriter in stabilizing transactions or
short-covering transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the 8% notes. As a result, the price of the 8% notes
may be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the underwriters at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
NSTAR estimates that its total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $180,000.
NSTAR has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
From time to time, the underwriters and their affiliates perform investment
banking, commercial banking and other financial services for NSTAR and its
affiliates.
Banc One Capital Markets, Inc., an underwriter, is affiliated with Bank One
Trust Company, N.A., the trustee under the indenture.
S-5
<PAGE> 6
VALIDITY OF NOTES
The validity of the new notes will be passed upon for NSTAR by Ropes &
Gray, Boston, Massachusetts and for the underwriters by Sullivan & Cromwell, New
York, New York.
S-6
<PAGE> 7
$500,000,000
LOGO
DEBT SECURITIES
------------------------
We may offer and sell our unsecured debt securities from time to time in
one or more series.
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and any supplements carefully
before you invest.
This prospectus may be used to offer and sell securities only if
accompanied by the prospectus supplement for those securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is January 28, 2000.
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus....................................... 3
Where You Can Find More Information......................... 3
The Company................................................. 5
Consolidated Ratios of Earnings to Fixed Charges............ 5
Use of Proceeds............................................. 6
Description of Debt Securities.............................. 6
General................................................ 6
Registration and Transfer.............................. 7
Payment and Place of Payment........................... 8
Events of Default...................................... 8
Modification and Waiver................................ 9
Consolidation, Merger and Sale of Assets............... 9
Regarding the Trustee.................................. 9
Defeasance............................................. 10
Governing Law.......................................... 10
Global Securities........................................... 10
Book-Entry Issuance.................................... 11
Plan of Distribution........................................ 13
Validity of Securities...................................... 14
Experts..................................................... 14
</TABLE>
2
<PAGE> 9
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, the "SEC," using a "shelf" registration
process. Under this shelf process, we may from time to time sell the debt
securities described in this prospectus in one or more offerings up to a total
dollar amount of $500,000,000.
This prospectus provides you with a general description of the debt
securities we may offer. Each time we sell debt securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. If the terms of your debt securities
vary between this prospectus and the accompanying prospectus supplement, you
should rely on the information in the following order of priority:
- the prospectus supplement; and
- the prospectus.
You should read both this prospectus and any prospectus supplement,
together with the additional information described under the heading "Where You
Can Find More Information."
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "NSTAR," "we," "us," "our" or similar
references mean NSTAR.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers the offer and sale of the securities described in
this prospectus. The registration statement, including the attached exhibits and
schedules, contains additional relevant information about us. The rules and
regulations of the SEC allow us to omit from this prospectus certain information
included in the registration statement.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
Northeast Regional Office
7 World Trade Center
Suite 1300
New York, New York 10048
Midwest Regional Office
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is:
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
3
<PAGE> 10
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus, except
for any information that is superseded by information that is included directly
in this document or in a more recent incorporated document.
This prospectus incorporates by reference the documents listed below that
we (or our predecessors) have previously filed with the SEC. They contain
important information about us and our financial condition.
BEC Energy
- Annual Report on Form 10-K for the year ended December 31, 1998, as
amended by the Form 10-K/A filed May 13, 1999.
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
- Current Report on Form 8-K filed August 13, 1999.
Commonwealth Energy System
- Annual Report on Form 10-K for the year ended December 31, 1998, as
amended by the Forms 10-K/A filed April 30, 1999 and May 12, 1999.
- Current Report on Form 8-K filed January 14, 1999.
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
NSTAR
- Registration Statement on Form S-4 filed May 12, 1999, as amended by the
Form S-4/A filed May 14, 1999.
- Current Report on Form 8-K filed August 25, 1999.
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
We incorporate by reference additional documents that we may file with the
SEC between the date of this prospectus and the date we sell all of the debt
securities. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
prospectus from us, or from the SEC through the SEC's Internet world wide web
site at the address described above. Documents incorporated by reference are
available from us without charge, excluding any exhibits to those documents,
unless the exhibit is specifically incorporated by reference in this prospectus.
You can obtain documents incorporated by reference in this prospectus by
requesting them in writing or by telephone from us at the following address:
NSTAR
Investor Relations
800 Boylston Street
Boston, Massachusetts 02199
(617) 424-2658
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, the
information and representations contained in this prospectus or in any
4
<PAGE> 11
of the materials that we have incorporated into this prospectus. If anyone does
give you information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to purchase, the
securities offered by this document are unlawful, or if you are a person to whom
it is unlawful to direct these activities, then the offer presented in this
document does not extend to you. The information contained in this document
speaks only as of the date of this document unless the information specifically
indicates that another date applies.
THE COMPANY
NSTAR is an energy delivery holding company serving approximately 1.3
million customers in Massachusetts, including more than one million electric
customers in 81 communities and 240,000 gas customers in 51 communities. NSTAR
was created to be the new parent holding company for BEC Energy and Commonwealth
Energy System effective August 25, 1999. Our utility subsidiaries include Boston
Edison Company, Commonwealth Electric Company, Cambridge Electric Light Company,
Canal Electric Company and Commonwealth Gas Company. Our nonutility operations
include telecommunications, district heating and cooling operations, liquefied
natural gas services and five real estate trusts. NSTAR was organized as a
Massachusetts business trust with transferable shares. We are an exempt public
utility holding company under the provisions of the Public Utility Holding
Company Act of 1935. Our executive offices are located at 800 Boylston Street,
Boston, Massachusetts 02199 (telephone: (617) 424-2000).
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges are as follows for the
five most recent fiscal years and the twelve months ended September 30, 1999:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------------------
1999 1998 1997 1996 1995 1994
-------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges... 2.52x(1) 2.74x 2.50x 2.42x 2.01x 2.07x
</TABLE>
---------------
(1) Fixed charges include interest expense of approximately $8 million related
to securitization. Excluding securitization interest, the ratio of earnings
to fixed charges for the twelve months ended September 30, 1999 would be
2.64x.
5
<PAGE> 12
USE OF PROCEEDS
Unless the prospectus supplement indicates otherwise, we anticipate adding
the net proceeds to be received from the sale of the debt securities to our
general funds, which may be used to:
- repay short-term debt;
- finance capital expenditures of non-regulated subsidiary companies;
- repurchase our common shares; and
- provide working capital.
Until all of the net proceeds are used, they may be temporarily invested in
short-term interest-bearing securities.
DESCRIPTION OF DEBT SECURITIES
We will issue the debt securities under an indenture dated as of January
12, 2000, between us and Bank One Trust Company, N.A., as trustee. A copy of the
indenture is an exhibit to the registration statement that contains this
prospectus.
The following summary of provisions of the indenture is not complete and is
subject to, and is qualified in its entirety by reference to, all of the
provisions of the indenture. The following summary describes the general terms
of the debt securities. The prospectus supplement will include the particular
terms of debt securities being offered which differ from or add to these general
terms.
The debt securities will be unsecured and will rank equally with all other
unsecured and unsubordinated indebtedness of NSTAR. Because we are a holding
company, our rights and the rights of our creditors, including the holders of
the debt securities we are offering under this prospectus, to participate in the
assets of any of our subsidiaries upon the subsidiary's liquidation or
reorganization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that we may ourselves be a creditor with
recognized claims against the subsidiary.
The name "NSTAR" means the trustees, as trustees but not personally, under
the Declaration of Trust dated April 20, 1999, as amended from time to time. Any
obligation, agreement, or liability made, entered into, or incurred by or on
behalf of NSTAR, including the debt securities, binds only its trust estate. No
shareholder, director, trustee, officer or agent thereof assumes or shall be
held to any liability entered into on behalf of NSTAR.
GENERAL
We may issue the debt securities from time to time, without limitation as
to aggregate principal amount and in one or more series. Neither the indenture
nor the debt securities will limit or otherwise restrict the amount of other
indebtedness, including secured indebtedness, which we may incur or other
securities which we or our subsidiaries may issue.
The prospectus supplement will include the particular terms of the debt
securities, including:
- the title and series designation;
- the aggregate principal amount and the limit, if any, on the aggregate
principal amount or initial public offering price of the debt securities
of that series;
- any rate or rates (or method for establishing the rate or rates) at
which the debt securities shall bear interest;
- the date from which any interest shall accrue;
- any interest payment dates;
6
<PAGE> 13
- the stated maturity date or dates on which principal is payable;
- whether the debt securities are to be issued in global form;
- any sinking fund requirements;
- any provisions for redemption, and the redemption price or prices;
- the denominations in which the debt securities shall be issuable;
- whether the debt securities are denominated or payable in United States
dollars or a foreign currency or units of two or more foreign
currencies;
- the place or places where payments on the debt securities shall be made
and the debt securities may be presented for registration of transfer or
exchange;
- whether any of the debt securities will be subject to defeasance in
advance of the date for redemption or the stated maturity date;
- if other than the full principal amount, the portion of the principal
amount of the debt securities payable upon acceleration of the maturity
of the debt securities;
- any index used to determine the amount of payment of principal of (and
premium, if any) or interest on the debt securities;
- the person to whom any interest on the debt securities of the series
shall be payable if other than the registered holder;
- any additional or different events of default that apply to debt
securities of the series and any change in the right of the trustee or
the required holders of those debt securities to declare the principal
thereof due and payable;
- any additional or different covenants that apply to debt securities of
the series; and
- any other terms of the debt securities.
Please see the accompanying prospectus supplement for the terms of the
specific debt securities we are offering. We may deliver this prospectus before
or concurrently with the delivery of a prospectus supplement.
We may issue debt securities as "original issue discount securities," which
bear either no interest or interest at a rate which at the time of issuance is
below market rates. These securities will be sold at a substantial discount
below their principal amount. In the event that the maturity of an original
issue discount security is accelerated, the amount payable to the holder upon
acceleration will be determined in accordance with the terms of that security
and the indenture, but will be an amount less than the amount payable at the
stated maturity of the principal of the security. The prospectus supplement will
describe special federal income tax and other considerations relating to
original issue discount securities.
The covenants contained in the indenture and the debt securities will not
protect holders in the event of a sudden decline in our creditworthiness that
might result from a recapitalization, restructuring, or other highly leveraged
transaction.
REGISTRATION AND TRANSFER
Unless otherwise indicated in the prospectus supplement, we will issue each
series of debt securities in registered form only, without coupons and in
denominations of $1,000 or integral multiples thereof. Holders may present debt
securities in registered form for registration of transfer or exchange for other
debt securities of the same series at the corporate trust office of the trustee.
No service charge will be made for any registration of transfer or exchange
of the debt securities except to cover any tax or other governmental charge
payable in connection with the registration of transfer or exchange.
7
<PAGE> 14
PAYMENT AND PLACE OF PAYMENT
We will pay principal of and any premium and interest on the debt
securities at the corporate trust office of the trustee. However, at our option,
we may pay any interest by check mailed to the holders of registered debt
securities at their registered addresses.
EVENTS OF DEFAULT
The following are "events of default" under the indenture with respect to
any series of debt securities:
- default in the payment of any principal or premium when due;
- default in the payment of any interest when due, which continues for 30
days;
- default in the deposit of any sinking fund payment when due;
- default in the performance of any other obligation contained in the
indenture for the benefit of debt securities of that series, which
continues for 60 days after written notice;
- default in the payment of other indebtedness at its stated maturity;
- acceleration of other indebtedness in a principal amount of $10,000,000
or more, which is not annulled within 90 days after written notice;
- specified events in bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to debt securities of
that series.
If an event of default under the indenture occurs and continues for any
series of debt securities, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding securities of that series may
declare the principal amount, or any lesser amount provided for in the debt
securities of that series, to be due and payable immediately. After the trustee
or the holders have accelerated a series of debt securities, but before the
trustee has obtained a judgment or decree for payment of money due, the holders
of a majority in aggregate principal amount of outstanding debt securities of
that series may, under specified circumstances, rescind and annul the
acceleration.
The holders of a majority in principal amount of the outstanding debt
securities of any series may waive an event of default with respect to that
series, except a default:
- in the payment of any amounts due and payable under the debt securities
of that series; or
- in an obligation contained in, or a provision of, the indenture which
cannot be modified under the terms of the indenture without the consent
of each holder of outstanding debt securities of the affected series.
The holders of a majority in principal amount of the outstanding debt
securities of a series may 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 debt securities of that series,
provided that this direction is not in conflict with any rule of law or the
indenture. Before proceeding to exercise any right or power under the indenture
at the direction of the holders, the trustee is entitled to receive from those
holders reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in complying with the direction.
A holder of any debt security of any series will have the right to
institute a proceeding with respect to the indenture or for any remedy
thereunder, if:
- that holder previously gave written notice to the trustee of a
continuing event of default with respect to debt securities of that
series;
- the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of that series also shall have made written
request to the trustee to institute the proceeding as trustee and
offered the trustee indemnity satisfactory to the trustee;
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<PAGE> 15
- the trustee shall have failed to institute the proceeding within 60
days; and
- the trustee shall not have received from the holders of a majority in
principal amount of the outstanding debt securities of that series a
direction inconsistent with such request during that 60-day period.
However, any holder of a debt security has the absolute, unconditional
right to institute suit for any defaulted payment after the due date for payment
under that debt security.
We are required to furnish to the trustee annually a statement as to the
performance of our obligations under the indenture and as to any default in such
performance.
MODIFICATION AND WAIVER
The indenture may be modified and amended by us and the trustee through a
supplemental indenture, with the consent of holders of at least a majority in
principal amount of each series of debt securities affected. However, without
the consent of each holder of any debt security affected, we may not amend or
modify any indenture to:
- change the stated maturity date of the principal, or any installment of
principal of or interest on, any debt security;
- reduce the principal amount of, the rate of interest on, or any premium
payable upon the redemption of any debt security;
- reduce the amount of principal of an original issue discount security
payable upon acceleration of its maturity;
- change the place or currency of payment of principal of, or any premium
or interest on, any debt security;
- impair the right to institute suit for the enforcement of any payment
with respect to any debt security;
- reduce the percentage in principal amount of debt securities of any
series, the consent of whose holders is required to modify or amend the
indenture or to waive compliance with certain provisions of the
indenture; or
- reduce the percentage in principal amount of debt securities of any
series, the consent of whose holders is required to waive any past
default.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may consolidate or merge with or into any other corporation, and we may
convey, transfer or lease all or substantially all of our assets to any
corporation, provided that:
- the resulting corporation, if other than us, is a corporation organized
and existing under the laws of the United States of America or any U.S.
state and assumes all of our obligations on the debt securities under
the indenture;
- we are not, or any successor corporation is not, immediately after any
consolidation or merger, in default under the indenture; and
- other specified conditions are met.
REGARDING THE TRUSTEE
Bank One Trust Company, N.A. is the trustee under the indenture. We and our
subsidiaries maintain banking relations with affiliates of the trustee in the
ordinary course of business.
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DEFEASANCE
We may terminate or "defease" our obligations under the indenture of any
series of debt securities provided that:
- we deposit irrevocably with the trustee as trust funds in trust either
an amount in U.S. dollars sufficient to pay the entire amount of the
debt securities, or U.S. government obligations which, through the
payment of interest, principal or premium, will provide an amount
sufficient to pay the entire amount of the debt securities;
- we deliver an opinion of counsel that the holders of the debt securities
of the series will have no federal income tax consequences as a result
of the deposit and defeasance;
- no event of default or event which, with notice or lapse of time or
both, would become an event of default under the indenture may exist or
be caused by the defeasance;
- the defeasance shall not cause a default under any of our other
agreements or instruments; and
- other specified conditions are met.
GOVERNING LAW
The indenture is, and the debt securities will be, governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
GLOBAL SECURITIES
We may issue the debt securities in whole or in part in the form of one or
more fully registered global securities, each a "global security" that will be
deposited with, or on behalf of, a depository. Unless otherwise indicated in the
prospectus supplement, the depository will be The Depository Trust Company
("DTC") and the debt securities will be registered in the name of Cede & Co. or
another nominee of DTC.
The specific terms of the depository arrangement with respect to any debt
securities will be described in the prospectus supplement. We anticipate that
the following provisions will apply to all depository arrangements.
So long as the depository or its nominee is the holder of a global
security, the depository or the nominee will be considered the sole owner or
holder of the debt securities represented by the global security for all
purposes under the indenture. Except as set forth below, owners of beneficial
interests in a global security representing debt securities:
- will not be entitled to have the debt securities registered in their
names;
- will not receive or be entitled to receive physical delivery of the debt
securities in definitive form; and
- will not be considered the owners or holders of the debt securities
under the indenture.
Accordingly, each person owning a beneficial interest in a global security
must rely on the procedures of the depository and, if that person is not a
participant in the depository, on the procedures of the participant through
which that person owns its interest, to exercise any rights of a holder under
the indenture. We understand that, under existing industry practices, if we
request any action of holders or if an owner of a beneficial interest in a
global security desires to give or take any action which a holder is entitled to
give or take under the indenture, the depository will authorize the participants
holding the relevant beneficial interest to give or take that action, and the
participants will authorize beneficial owners owning through them to give or
take (or direct the participants to give or take) that action.
Payments of principal of or any premium and interest on debt securities
represented by a global security will be made to the depository or its nominee
as the registered holder of the global security
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representing the debt securities. Neither NSTAR, the trustee for the debt
securities, any paying agent for the debt securities nor the securities
registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a global security for the debt securities or for maintaining,
supervising or reviewing any records relating to those beneficial ownership
interests.
Global debt securities may be exchanged for definitive debt securities only
if:
- the depository has notified us that it is unwilling or unable to
continue as depository for the global debt security or has ceased to be
a clearing agency registered under the Securities Exchange Act of 1934;
- there shall have occurred and be continuing an event of default with
respect to the debt securities represented by the global debt security;
or
- we decide, in our discretion, that the global debt security shall be
exchangeable.
Unless and until it is exchanged in whole or in part for debt securities in
definitive form in the manner described above, a global security may not be
transferred except as a whole by the depository to a nominee of the depository,
by a nominee of the depository to the depository or another nominee of the
depository, or by the depository or any such nominee to a successor of the
depository or a nominee of such successor.
BOOK-ENTRY ISSUANCE
DTC has advised us that:
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 Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934.
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts. This eliminates
the need for physical movement of securities certificates. Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. DTC is owned by a number of its
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain custodial relationships with direct participants, either directly
or indirectly ("indirect participants"). The rules applicable to DTC and
its participants are on file with the SEC.
Purchases of debt securities within the DTC system must be made by or
through direct participants, which will receive a credit for the debt
securities on DTC's records. The ownership interest of each actual
purchaser of each debt security (a "beneficial owner") is in turn recorded
on the direct and indirect participants' records. DTC will maintain
accounts showing the debt security holdings of its participants, and these
participants will in turn maintain accounts showing the debt security
holdings of their customers. Some of these customers may themselves be
securities intermediaries holding debt securities for their customers.
Thus, each beneficial owner of a book-entry debt security will hold that
debt security indirectly through a hierarchy of intermediaries, with DTC at
the "top" and the beneficial owner's own securities intermediary at the
"bottom."
Beneficial owners will not receive written confirmation from DTC of
their purchases. Instead, beneficial owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants
through which the beneficial owners purchased the debt securities.
Transfers of ownership interests in the debt
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<PAGE> 18
securities are accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in the debt securities,
except in the event that use of the book-entry system for the debt
securities is discontinued.
DTC has no knowledge of the actual beneficial owners of the debt
securities. DTC's records reflect only the identity of the direct
participants to whose accounts those debt securities are credited, which
may or may not be the beneficial owners. The participants and indirect
participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by
direct participants and indirect participants to beneficial owners, and the
voting rights of direct participants, indirect participants and beneficial
owners, will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. (or other DTC nominee)
as the registered holder of the debt securities. If less than all of the
debt securities are being redeemed, DTC's current practice is to determine
by lot the amount of the interest of each direct participant to be
redeemed.
Although voting with respect to the debt securities is limited to the
holders of record of the debt securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. (or other DTC nominee) will
itself consent or vote with respect to the debt securities. Under its usual
procedures, DTC will mail an omnibus proxy to the trustee as soon as
possible after the record date. An omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts
the debt securities are credited on the record date, who are identified in
a listing attached to the omnibus proxy.
Redemption proceeds and distribution payments on the debt securities
will be made by NSTAR or the trustee to Cede & Co. (or other DTC nominee)
as registered holder of the debt securities. DTC's practice is to credit
direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payments on that payment date. Payments
by participants to beneficial owners will be governed by standing
instructions and customary practices and will be the responsibility of
participants and not of DTC, the trustee or NSTAR, subject to any
applicable statutory or regulatory requirements. Payment of redemption
proceeds and distributions to DTC is the responsibility of NSTAR or the
trustee, and disbursements of those payments to the beneficial owners is
the responsibility of direct and indirect participants.
DTC may discontinue providing its services as securities depository
with respect to any of the debt securities at any time by giving reasonable
notice to the trustee and us. Under these circumstances, in the event that
a successor securities depository is not obtained, definitive certificates
representing such debt securities are required to be printed and delivered.
Additionally, we, at our option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depository). In
that event, definitive certificates for such debt securities will be
printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but we assume no
responsibility for the accuracy thereof. Neither we nor the trustee has any
responsibility for the performance by DTC or its participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
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PLAN OF DISTRIBUTION
We may sell securities:
- to the public through a group of underwriters managed or co-managed by
one or more underwriters;
- through one or more agents; or
- directly to purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions:
- at a fixed price or prices, which may be changed from time to time;
- at market prices prevailing at the time of sale;
- at prices related to those prevailing market prices; or
- at negotiated prices.
Each prospectus supplement will describe the method of distribution of the
securities and any applicable restrictions.
The prospectus supplement with respect to the securities of a particular
series will describe the terms of the offering of the securities, including the
following:
- the name or names of any agents or underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agent or
underwriters;
- all other items constituting underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- any exchanges on which the securities will be listed.
Only the agents or underwriters named in the prospectus supplement are
agents or underwriters in connection with the securities being offered.
We may agree to enter into an agreement to indemnify the agents and the
several underwriters against certain civil liabilities, including liabilities
under the Securities Act, or to contribute to payments the agents or the
underwriters may be required to make.
Certain of the underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for us or
one or more of our affiliates in the ordinary course of business.
The debt securities will be new issues of securities and will have no
established trading market. Unless otherwise indicated in the prospectus
supplement relating to a specific issuance of debt securities, the debt
securities will not be listed on a national securities exchange or the Nasdaq
National Market. We can give no assurance as to the liquidity of or the
existence of trading markets for the debt securities.
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VALIDITY OF SECURITIES
The validity of the securities will be passed upon by Ropes & Gray for
NSTAR.
EXPERTS
The consolidated financial statements of BEC Energy included in BEC
Energy's Annual Report on Form 10-K, as amended by Form 10-K/A filed on May 13,
1999, for the year ended December 31, 1998, which is incorporated by reference
in this prospectus, have been so incorporated in reliance upon the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
The consolidated financial statements and schedules of Commonwealth Energy
System included in Commonwealth Energy System's Annual Report on Form 10-K for
the year ended December 31, 1998, which is incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY UPON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS
IS AN OFFER TO SELL ONLY THE NOTES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES
AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company........................... S-2
Use of Proceeds....................... S-2
Consolidated Ratios of Earnings to
Fixed Charges....................... S-2
Description of the Notes.............. S-3
Underwriting.......................... S-5
Validity of Notes..................... S-6
PROSPECTUS
About This Prospectus................. 3
Where You Can Find More Information... 3
The Company........................... 5
Consolidated Ratios of Earnings to
Fixed Charges....................... 5
Use of Proceeds....................... 6
Description of Debt Securities........ 6
Global Securities..................... 10
Plan of Distribution.................. 13
Validity of Securities................ 14
Experts............................... 14
</TABLE>
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$200,000,000
[NSTAR LOGO]
8% NOTES
DUE FEBRUARY 15, 2010
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PROSPECTUS SUPPLEMENT
------------------------
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FLEET SECURITIES, INC.
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