<PAGE> 1
Pursuant to Rule 424b4
Reg. No. 333-60375
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 26, 1998)
$60,000,000
WISCONSIN POWER AND LIGHT COMPANY
5.70% DEBENTURES DUE OCTOBER 15, 2008
------------------------
Interest on the 5.70% Debentures due October 15, 2008 (the "Debentures") is
payable semi-annually on April 15 and October 15 of each year, commencing April
15, 1999. The Debentures will be general unsecured obligations of Wisconsin
Power and Light Company (the "Company") and will rank on a parity with all other
unsecured and unsubordinated debt of the Company. The Debentures are not
redeemable prior to maturity and will not be subject to any sinking fund.
The Debentures will be represented by one or more global securities
registered in the name of the nominee of The Depository Trust Company ("DTC"),
as depositary. Book-Entry Interests (as defined in the accompanying Prospectus)
in such global securities will be shown on, and transfers thereof will be
effected only through, records maintained by DTC or its nominee for such global
securities and on the records of DTC and its participants. Except as described
herein and in the accompanying Prospectus, Debentures in definitive form will
not be issued. See "Certain Terms of the Debentures" herein and "Description of
the Debentures" and "Book-Entry Only System" in the accompanying Prospectus.
------------------------
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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Per Debenture............................. 99.913% .65% 99.263%
- ----------------------------------------------------------------------------------------------------------
Total..................................... $59,947,800 $390,000 $59,557,800
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $140,000.
------------------------
The Debentures are being offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by them, subject to approval
of certain legal matters by counsel for the Underwriters and to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Debentures will be made through the book-entry facilities of DTC
on or about October 30, 1998 against payment therefor in immediately available
funds.
------------------------
MERRILL LYNCH & CO.
<TABLE>
<S> <C>
ROBERT W. BAIRD & CO. LEGG MASON WOOD WALKER
INCORPORATED INCORPORATED
</TABLE>
------------------------
The date of this Prospectus Supplement is October 27, 1998.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING AND THE PURCHASE OF
DEBENTURES TO COVER SHORT POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
USE OF PROCEEDS
The net proceeds from the sale of the Debentures will be used to repay
short-term debt which was incurred by the Company to (i) retire at maturity
$8,899,000 aggregate principal amount of the Company's First Mortgage Bonds,
Series L, 6 1/4%, due August 1, 1998 and (ii) finance utility construction
expenditures and other general corporate expenditures. As of September 30, 1998,
the average weighted interest rate on the short-term debt to be repaid was
approximately 5.57% per annum.
SELECTED FINANCIAL INFORMATION
Set forth below is selected financial information for the Company for the
twelve months ended June 30, 1998 and the years ended December 31, 1997, 1996
and 1995.
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED
TWELVE MONTHS DECEMBER 31,
ENDED JUNE 30, --------------------------------
1998 1997 1996 1995
-------------- ---- ---- ----
(UNAUDITED) (THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues............................... $762,960 $794,717 $759,275 $689,672
Income Before Interest Expense................... $ 89,296 $103,841 $113,957 $112,473
Net Income for Common Stock...................... $ 49,894 $ 67,924 $ 79,175 $ 75,342
Ratio of Earnings to Fixed Charges
(unaudited)(1)................................. 3.12 4.13 4.81 4.23
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, 1998 (UNAUDITED)
-----------------------------------------
PERCENT OF
AS CAPITALIZATION
ACTUAL ADJUSTED(2) AS ADJUSTED
------ ----------- --------------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Capitalization (3):
Current maturities of long-term debt...................... $ 8,899 $ 0 0.0%
First mortgage bonds, net(4).............................. 249,854 249,854 23.9
Debentures, net(5)........................................ 104,732 164,732 15.8
Preferred stock without mandatory redemption.............. 59,963 59,963 5.7
Common shareowners' investment............................ 571,442 571,442 54.6
-------- ---------- -----
Total................................................... $994,890 $1,045,991 100.0%
======== ========== =====
</TABLE>
- -------------------------
(1) For the purpose of computing the ratios of earnings to fixed charges,
earnings have been calculated by adding to income before interest expense,
Federal and state income taxes and the estimated interest component of
rentals. Fixed charges represent interest expense, amortization of debt
discount, premium and expense and the estimated interest component of
rentals.
(2) As adjusted for the issuance of the Debentures and the application of the
net proceeds as described under "Use of Proceeds."
(3) For the purpose of this presentation, capitalization includes current
maturities of long-term debt.
(4) Excludes variable rate demand bonds in the amount of $56.975 million and net
of unamortized discount relating to outstanding First Mortgage Bonds in the
amount of $1.147 million.
(5) Net of unamortized discount relating to outstanding Debentures in the amount
of $0.268 million.
S-2
<PAGE> 3
CERTAIN TERMS OF THE DEBENTURES
The following description of the particular terms of the Debentures
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debentures set forth in the
accompanying Prospectus under "Description of the Debentures," to which
description reference is hereby made.
GENERAL
The Debentures will be unsecured general obligations of the Company and
will be issued as a separate series of securities under the Indenture, dated as
of June 20, 1997 (the "Unsecured Debt Indenture"), between the Company and
Firstar Trust Company (subsequently succeeded by Firstar Bank Milwaukee, N.A.),
as Trustee. As of the date hereof, the Company had $105,000,000 of Securities
(as defined in the accompanying Prospectus) outstanding under the Unsecured Debt
Indenture and $307,976,000 of secured debt outstanding under its First Mortgage
Indenture (as defined in the accompanying Prospectus). The Unsecured Debt
Indenture does not limit the Company's ability to issue additional First
Mortgage Bonds or to enter into sale and leaseback transactions.
MATURITY AND INTEREST
The Debentures will be limited to $60,000,000 aggregate principal amount
and will mature on October 15, 2008. Each Debenture will bear interest from
October 30, 1998 or from the most recent interest payment date to which interest
has been paid, at the rate per annum specified on the cover page hereof, payable
semi-annually on April 15 and October 15, commencing April 15, 1999, to the
person in whose name such Debenture is registered at the close of business on
the preceding April 1 and October 1, respectively.
NO REDEMPTION PRIOR TO MATURITY
The Debentures will not be redeemable prior to maturity.
OTHER TERMS
The covenant described in the accompanying Prospectus under "Description of
the Debentures -- Certain Covenants -- Limitations on Liens" will apply to the
Debentures. Future series of Securities issued under the Unsecured Debt
Indenture may or may not have different covenants.
The Debentures will be subject to defeasance under the conditions described
in the accompanying Prospectus. The Unsecured Debt Indenture is governed by the
laws of the State of Wisconsin.
BOOK-ENTRY PROCEDURES
The Debentures will be represented by one or more global securities
registered in the name of DTC or its nominee. Book-Entry Interests in such
global securities will be shown on, and transfers thereof will be effected only
through, records maintained by DTC or its nominee for such global securities and
on the records of DTC Participants (as defined in the accompanying Prospectus).
Except as described below and in the accompanying Prospectus, Debentures in
definitive form will not be issued and owners of Book-Entry Interests will not
be considered the holders thereof.
S-3
<PAGE> 4
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in the global
securities.
In the event that the book-entry system is discontinued, or DTC is at any
time unwilling or unable to continue as depositary, and a successor depositary
is not appointed by the Company within 90 days, the Company will issue
individual Debentures in certificated form to owners of Book-Entry Interests in
exchange for the Debentures held by DTC or its nominee, as the case may be.
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest on global
securities will be made by the Company in immediately available funds.
See "Book-Entry Only System" in the accompanying Prospectus.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") among the Company and Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), acting on behalf of itself, Robert W.
Baird & Co. Incorporated and Legg Mason Wood Walker, Incorporated (collectively,
the "Underwriters"), the Company has agreed to sell to the Underwriters, and the
Underwriters have severally agreed to purchase, the respective principal amounts
of the Debentures set forth after their names below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
- ------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... $45,000,000
Robert W. Baird & Co. Incorporated.......................... 7,500,000
Legg Mason Wood Walker, Incorporated........................ 7,500,000
-----------
Total.......................................... $60,000,000
===========
</TABLE>
The Purchase Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the Debentures if any are purchased.
The Underwriters have advised the Company that they propose initially to
offer the Debentures to the public at the public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at such price
less a concession not in excess of .4% of the principal amount of the
Debentures. The Underwriters may allow, and such dealers may reallow, a discount
not in excess of .25% of the principal amount on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
The Debentures are a new issue of securities with no established trading
market. The Company does not intend to list the Debentures on any securities
exchange. The Underwriters have advised the Company that they currently intend
to make a market in the Debentures; however, the Underwriters are not obligated
to do so, and any Underwriter may discontinue any such market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the Debentures.
Until the distribution of the Debentures is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters to
bid for and purchase the Debentures. As an exception to these rules, Merrill
Lynch, as representative, will be permitted to engage in certain transactions
that stabilize the price of the Debentures. Such transactions consist of bids or
purchases for the purpose of setting, fixing or maintaining the price of the
Debentures.
If the Underwriters create a short position in the Debentures in connection
with this offering, i.e., if they sell more of the Debentures than are set forth
on the cover page of this Prospectus Supplement, Merrill Lynch may reduce that
short position by purchasing Debentures in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither the Company nor the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Debentures. In addition, neither
the Company nor the Underwriters make any representation that Merrill Lynch will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
S-5
<PAGE> 6
PROSPECTUS
$60,000,000
WISCONSIN POWER AND LIGHT COMPANY
DEBENTURES
------------------------
Wisconsin Power and Light Company (the "Company") may from time to time
offer up to $60 million aggregate principal amount of its unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(the "Debentures"). The Debentures will be offered to the public on terms
determined at the time or times of sale. An accompanying supplement to this
Prospectus (the "Prospectus Supplement") will set forth the specific terms and
conditions of the Debentures offered thereby, including, without limitation, the
title, aggregate principal amount, denominations, maturity, rate (which may be
fixed or variable) and time of payment of interest, any terms for redemption or
conversion, any terms for sinking or analogous fund payment(s), any listing on a
registered national securities exchange and the initial public offering price.
The Company may sell the Debentures to or through underwriters (which may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, Robert W. Baird &
Co. Incorporated and Legg Mason Wood Walker, Incorporated) or dealers, and may
also sell Debentures directly to other purchasers or through agents designated
from time to time by the Company. See "Plan of Distribution." The names of such
underwriters, dealers or agents, any applicable commissions or discounts and the
net proceeds to the Company from the sale of the Debentures will be set forth in
the accompanying Prospectus Supplement.
No Debentures may be sold without delivery of a Prospectus Supplement
describing such issue of such Debentures and the method and terms of offering
thereof.
The issue and sale of the Debentures are subject to the prior approval and
authorization of the Public Service Commission of Wisconsin, which has been or
will be obtained prior to the sale of the Debentures.
------------------------
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.
------------------------
MERRILL LYNCH & CO.
ROBERT W. BAIRD & CO.
INCORPORATED LEGG MASON WOOD WALKER
INCORPORATED
------------------------
The date of this Prospectus is October 26, 1998
<PAGE> 7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Midwest Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Northeast
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such reports, proxy statements and other information
concerning the Company can be inspected at the offices of the American Stock
Exchange, 86 Trinity Place, New York, New York 10006. Certain securities of the
Company are listed on such exchange.
In addition, the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of such Web site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, schedules and exhibits thereto referred to
herein as the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to the Debentures offered hereby. This Prospectus does not
contain all of the information set forth in such Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission. For further information, reference is made to such Registration
Statement which may be inspected and copied in the manner and at the sources
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company (under File No.
0-337) with the Commission pursuant to the Exchange Act (to the extent
disclosures therein relate to the Company) are hereby incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998.
3. The Company's Current Reports on Form 8-K dated April 21 and June
10, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made by this Prospectus shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents that have been or
may be incorporated by reference in this Prospectus (not including exhibits to
such documents unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to Edward M. Gleason, Vice
President-Treasurer and Corporate Secretary, Wisconsin Power and Light Company,
222 West Washington Avenue, Madison, Wisconsin 53703 (Telephone: (608)
252-3311).
2
<PAGE> 8
THE COMPANY
The Company, a Wisconsin corporation and a subsidiary of Interstate Energy
Corporation (f/k/a WPL Holdings, Inc.) d/b/a Alliant Energy Corporation ("IEC"),
is a public utility engaged primarily in generating, purchasing, distributing
and selling electric energy in portions of southern and central Wisconsin. The
Company also purchases, distributes, transports and sells natural gas in parts
of such areas and supplies water in two communities. A wholly owned subsidiary
of the Company supplies electric, gas and water service principally in Winnebago
County, Illinois.
The Company provides electricity in a service territory of approximately
16,000 square miles. As of December 31, 1997, the Company furnished retail
electric service to approximately 393,000 customers in 615 cities, villages and
towns, and wholesale electric service to 25 municipal utilities, one privately
owned utility, three rural electric cooperatives, one Native American nation and
one municipal electric utility which provides retail service to 14 communities.
During 1997, the Company's electric operating revenues were derived from the
following types of customers: residential -- 31.5%, commercial -- 16.9%,
industrial -- 24.0%, sales for resale -- 25.4%, and other -- 2.3%.
The maximum net hourly peak load on the Company's electric system in 1997
was 2,253 megawatts. During 1997, the Company's net kilowatt-hour generation of
electricity was derived from the following fuel sources: 86% coal, 10% nuclear
and 4% hydroelectric, oil and natural gas.
As of December 31, 1997, the Company provided retail natural gas service to
approximately 155,000 customers in 243 cities, villages and towns. During 1997,
the Company's gas operating revenues were derived from the following types of
customers: residential -- 54.2%, commercial -- 29.2%, industrial -- 5.4%,
transportation and other -- 11.2%.
The Company is subject to the jurisdiction of, among other regulatory
agencies, the Public Service Commission of Wisconsin as to various phases of its
operations, including rates, service and issuance of securities. The Company's
Illinois subsidiary is subject to the jurisdiction of the Illinois Commerce
Commission with respect to such matters. The Company and its Illinois subsidiary
also are subject to the jurisdiction of the Federal Energy Regulatory
Commission. The Company's parent corporation, IEC, is a registered public
utility holding company under (and IEC and, with respect to certain matters, the
Company, are subject to the requirements of) the Public Utility Holding Company
Act of 1935, as amended.
The principal executive offices of the Company are located at 222 West
Washington Avenue, Madison, Wisconsin 53703 and its telephone number is (608)
252-3311.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debentures
offered hereby to repay indebtedness, including debt incurred in connection with
the retirement, redemption or refinancing of existing series of the Company's
First Mortgage Bonds. Unless otherwise specified in the Prospectus Supplement,
any proceeds not used for the foregoing purpose will be added to the general
funds of the Company and used for general corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
Set forth below are the ratios of earnings to fixed charges (unaudited) for
the Company for the twelve months ended June 30, 1998 and for the last five
years:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------
1998 1997 1996 1995 1994 1993
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.12 4.13 4.81 4.23 4.29 3.74
</TABLE>
For the purpose of computing the ratios of earnings to fixed charges,
earnings have been calculated by adding to income before interest expense,
Federal and state income taxes and the estimated interest component of rentals.
Fixed charges represent interest expense, amortization of debt discount, premium
and expense and the estimated interest component of rentals.
3
<PAGE> 9
DESCRIPTION OF THE DEBENTURES
The Debentures will be issued in one or more series under the Indenture,
dated as of June 20, 1997 (the "Unsecured Debt Indenture"), between the Company
and Firstar Trust Company (subsequently succeeded by Firstar Bank Milwaukee,
N.A.), as Trustee (the "Trustee"), which is included as an exhibit to the
Registration Statement for the Debentures. The following summaries of certain
provisions of the Unsecured Debt Indenture and the Debentures do not purport to
be complete and are subject to, and qualified in their entirety by reference to,
all of the provisions of the Unsecured Debt Indenture and any Officers'
Certificates or supplemental indentures relating thereto, including the
definitions therein of certain terms. Whenever particular Sections or defined
terms of the Unsecured Debt Indenture are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated by reference herein
or therein, as the case may be.
The term "Securities," as used under this heading, refers to all Securities
issued under the Unsecured Debt Indenture and includes the Debentures.
GENERAL
The Unsecured Debt Indenture does not limit the amount of Securities that
can be issued thereunder and provides that the Securities may be issued from
time to time in one or more series pursuant to the terms of one or more
Officers' Certificates or supplemental indentures creating such series. As of
the date of this Prospectus, the only Securities outstanding under the Unsecured
Debt Indenture are $105 million aggregate principal amount of the Company's 7%
Debentures due June 15, 2007. The Debentures will be unsecured and will rank on
a parity with all other unsecured and unsubordinated debt of the Company.
Although the Unsecured Debt Indenture provides for the possible issuance of
Securities in other forms or currencies, the only Securities covered by this
Prospectus will be Securities denominated in U.S. dollars in registered form
without coupons.
Substantially all of the permanent fixed properties of the Company are
subject to the lien of the Indenture of Mortgage or Deed of Trust, dated August
1, 1941, executed by the Company to First Wisconsin Trust Company (subsequently
succeeded by Firstar Bank Milwaukee, N.A.) and George B. Luhman (Gene E. Ploeger
being now the individual trustee under said Indenture), as Trustees, as amended
by the several indentures supplemental thereto heretofore executed (said
Indenture, as so amended, being herein called the "First Mortgage Indenture"),
under which the Company's First Mortgage Bonds are outstanding.
TERMS
Reference is made to the Prospectus Supplement relating to any series of
the Debentures for the following terms thereof, among others: (a) the title or
designation, aggregate principal amount and denominations of the Debentures; (b)
the price at which the Debentures will be issued and, if an index formula or
other method is used, the method for determining amounts of principal or
interest; (c) the maturity date and other dates, if any, on which principal will
be payable; (d) the rate or rates (which may be fixed or variable) per annum at
which the Debentures will bear interest, if any; (e) the date or dates from
which interest will accrue and on which interest will be payable, and the record
dates for the payment of interest; (f) the manner of paying principal and
interest; (g) the place or places where principal and interest will be payable;
(h) the terms of any mandatory or optional redemption by the Company; (i) the
terms of any redemption at the option of Holders; (j) whether the Debentures are
to be issuable as registered Securities, bearer Securities, or both, and whether
and upon what terms any registered Securities may be exchanged for bearer
Securities and vice versa; (k) whether the Debentures are to be represented in
whole or in part by a Security in global form and, if so, the terms thereof and
the identity of the depositary for any global Security; (l) any tax indemnity
provisions; (m) if the Debentures provide that payments of principal or interest
may be made in a currency other than that in which Debentures are denominated,
the manner for determining such payments; (n) the portion of principal payable
upon acceleration of a Discounted Security (as defined below); (o) whether and
upon what terms Debentures may be defeased; (p) whether the covenant referred to
below under "Certain Covenants -- Limitations on Liens" applies, and any events
of default or restrictive covenants
4
<PAGE> 10
in addition to or in lieu of those set forth in the Unsecured Debt Indenture;
(q) provisions for electronic issuance of Debentures or for Debentures in
uncertificated form; and (r) any additional provisions or other special terms
not inconsistent with the provisions of the Unsecured Debt Indenture, including
any terms that may be required or advisable under United States or other
applicable laws or regulations, or advisable in connection with the marketing of
the Debentures. (Section 2.01)
The Securities of a series may be issued in whole or in part in the form of
one or more global Securities that will be deposited with, or on behalf of, a
depositary identified in the Prospectus Supplement relating to the series.
Global Securities may be issued in registered, bearer or uncertificated form and
in either temporary or permanent form. Unless and until it is exchanged in whole
or in part for Securities in definitive form, a global Security may not be
transferred except as a whole by the depositary to a nominee or a successor
depositary. (Section 2.12) The specific terms of the depositary arrangement with
respect to any Securities of a series will be described in the Prospectus
Supplement relating to the series. See "Book-Entry Only System."
Securities of any series may be issued as registered Securities, bearer
Securities or uncertificated Securities, as specified in the terms of the
series. (Section 2.01) Unless otherwise indicated in the Prospectus Supplement,
registered Securities will be issued in denominations of $1,000 and whole
multiples thereof and bearer Securities will be issued in denominations of
$5,000 and whole multiples thereof. One or more global Securities will be issued
in a denomination or aggregate denominations equal to the aggregate principal
amount of outstanding Securities of the series to be represented by such global
Security or Securities. (Section 2.12)
In connection with its original issuance, no bearer Security will be
offered, sold, resold, or mailed or otherwise delivered to any location in the
United States and a bearer Security in definitive form may be delivered in
connection with its original issuance only if the person entitled to receive the
bearer Security furnishes certification as described in United States Treasury
regulation section 1.163-5(c)(2)(i)(D)(3). (Section 2.04)
For purposes of this Prospectus, unless otherwise indicated, "United
States" means the United States of America (including the States thereof and the
District of Columbia), its territories and possessions and all other areas
subject to its jurisdiction. "United States person" means a citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or a political subdivision
thereof or any estate or trust the income of which is subject to United States
Federal income taxation regardless of its source. Any special United States
Federal income tax considerations applicable to bearer Securities will be
described in the Prospectus Supplement relating thereto.
To the extent set forth in the Prospectus Supplement, except in special
circumstances set forth in the Unsecured Debt Indenture, principal and interest
on bearer Securities will be payable only upon surrender of bearer Securities
and coupons at a paying agency of the Company located outside of the United
States. During any period thereafter for which it is necessary in order to
conform to United States tax law or regulations, the Company will maintain a
paying agent outside the United States to which the bearer Securities and
coupons may be presented for payment and will provide the necessary funds
therefor to the paying agent upon reasonable notice. (Section 2.04)
Registration of transfer of registered Securities may be requested upon
surrender thereof at any agency of the Company maintained for that purpose and
upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07) Bearer Securities and the coupons related thereto will be transferable by
delivery.
Securities may be issued under the Unsecured Debt Indenture as Discounted
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States Federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Discounted Securities. "Discounted Security" means a Security
where the amount of principal due upon acceleration is less than the stated
principal amount of such Security.
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CERTAIN COVENANTS
The Debentures will not be secured by any properties or assets and will
represent unsecured debt of the Company. The Unsecured Debt Indenture does not
limit the amount of unsecured debt that the Company can incur. As indicated
under "General" above, substantially all of the permanent fixed properties of
the Company are subject to the lien of the First Mortgage Indenture securing the
Company's First Mortgage Bonds.
As discussed below, the Unsecured Debt Indenture includes certain
limitations on the Company's ability to create liens. Such limitations will
apply if the Officers' Certificate or supplemental indenture establishing the
terms of a series so provides. If applicable, the limitations are subject to a
number of qualifications and exceptions. The Unsecured Debt Indenture does not
limit the Company's ability to issue additional First Mortgage Bonds or to enter
into sale and leaseback transactions.
The covenant described below will apply if so indicated in a Prospectus
Supplement. Any obligations under the Unsecured Debt Indenture are subject to
termination upon defeasance. See "Legal Defeasance and Covenant Defeasance"
below. Also, unless otherwise indicated in a Prospectus Supplement, the
Unsecured Debt Indenture does not afford holders of the Securities protection in
the event of a highly leveraged or other transaction involving the Company that
may adversely affect holders of the Securities.
Limitations on Liens. The Unsecured Debt Indenture provides that, so long
as there remain outstanding any Securities of any series to which this
limitation applies, and subject to termination as referred to above, the Company
will not, and will not permit any Subsidiary to, create or suffer to be created
or to exist any mortgage, pledge, security interest, or other lien
(collectively, "Lien") on any of its properties or assets now owned or hereafter
acquired to secure any indebtedness, without making effective provision whereby
the Securities of such series shall be equally and ratably secured with (or
prior to) any and all such indebtedness and with any other indebtedness
similarly entitled to be equally and ratably secured. This restriction does not
apply to or prevent the creation or existence of (a) the First Mortgage
Indenture securing the Company's First Mortgage Bonds or any indenture
supplemental thereto subjecting any property to the Lien thereof or confirming
the Lien thereof upon any property, whether owned before or acquired after the
date of the Unsecured Debt Indenture; (b) Liens on property existing at the time
of acquisition or construction of such property (or created within one year
after completion of such acquisition or construction), whether by purchase,
merger, construction or otherwise (or on the property of a Subsidiary at the
date it became a Subsidiary), or to secure the payment of all or any part of the
purchase price or construction cost thereof, including the extension of any such
Liens to repairs, renewals, replacements, substitutions, betterments, additions,
extensions and improvements then or thereafter made on the property subject
thereto; (c) any extensions, renewals or replacements (or successive extensions,
renewals or replacements), in whole or in part, of Liens (including, without
limitation, the First Mortgage Indenture) permitted by the foregoing clauses (a)
and (b); (d) the pledge of any bonds or other securities at any time issued
under any of the Liens permitted by clauses (a), (b) or (c) above; or (e)
Permitted Encumbrances. (Section 4.07)
"Permitted Encumbrances" include, among other items, (a) the pledge or
assignment in the ordinary course of business of electricity, gas (either
natural or artificial) or steam, accounts receivable or customers' installment
paper, (b) Liens affixing to property of the Company or a Subsidiary at the time
a Person consolidates with or merges into, or transfers all or substantially all
of its assets to, the Company or a Subsidiary, provided that in the opinion of
the Board of Directors of the Company or Company management (evidenced by a
certified Board resolution or an Officers' Certificate delivered to the Trustee)
the property acquired pursuant to the consolidation, merger or asset transfer is
adequate security for the Lien; and (c) Liens or encumbrances not otherwise
permitted if, at the incurrence of and after giving effect thereto, the
aggregate of all obligations of the Company and its Subsidiaries secured thereby
does not exceed 10% of Tangible Net Worth. "Tangible Net Worth" means (i) common
stockholders' equity appearing on the most recent balance sheet of the Company
(or consolidated balance sheet of the Company and its Subsidiaries if the
Company then has one or more consolidated Subsidiaries) prepared in accordance
with generally accepted accounting principles less (ii) intangible assets
(excluding intangible assets recoverable through rates as prescribed by
applicable regulatory authorities). (Section 4.06)
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Further, this restriction will not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business. (Section 4.07)
Other Covenants. Any other restrictive covenants which may apply to a
particular series of Securities will be described in the Prospectus Supplement
relating thereto.
SUCCESSOR OBLIGOR
The Unsecured Debt Indenture provides that, unless otherwise specified in
the Officers' Certificate or supplemental indenture establishing a series of
Securities, the Company will not consolidate with, or sell or convey all or
substantially all of its assets to, or merge with or into any other Person
unless (i) either the Company will be the continuing corporation, or the Person
will be a Person organized and existing under the laws of the United States of
America or a state thereof and the Person will expressly assume the due and
punctual payment of the principal of and interest on all the Securities and any
coupons and the due and punctual performance and observance of all of the
covenants and conditions of the Company under the Unsecured Debt Indenture by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such Person; (ii) the Company or the Person, as the case may be,
will not, immediately after the merger or consolidation, or the sale or
conveyance, be in default in the performance of any such covenant or condition;
and (iii) after giving effect to the transaction, no event which, after notice
or lapse of time, would become a Default (as defined) will have occurred or be
continuing. (Section 5.01) The successor will be substituted for the Company,
and thereafter all obligations of the Company under the Unsecured Debt
Indenture, the Securities and any coupons shall terminate. (Section 5.02)
EXCHANGE OF SECURITIES
Registered Securities may be exchanged for an equal aggregate principal
amount of registered Securities of the same series and date of maturity in such
authorized denominations as may be requested upon surrender of the registered
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of the agent. (Section 2.07)
To the extent permitted by the terms of a series of Securities authorized
to be issued in registered form and bearer form, bearer Securities may be
exchanged for an equal aggregate principal amount of registered or bearer
Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the bearer Securities with
all unpaid coupons relating thereto (except as may otherwise be provided in the
Securities) at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of the agent. (Section 2.07) As of the
date of this Prospectus, it is expected that the terms of a series of Securities
will not permit registered Securities to be exchanged for bearer Securities.
DEFAULTS AND REMEDIES
Unless the Officers' Certificate or supplemental indenture establishing the
series otherwise provides, an "Event of Default" with respect to a series of
Securities will occur if:
(1) the Company defaults in any payment of interest on any Securities
of the series when the same becomes due and payable and the Default
continues for a period of 60 days;
(2) the Company defaults in the payment of the principal of any
Securities of the series when the same becomes due and payable at maturity
or upon redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Securities of a series as required by
the Officers' Certificate or supplemental indenture establishing such
series and the Default continues for a period of 60 days;
(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues for 90 days
after the notice specified below;
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(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian for it or for all or
substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company in an involuntary case,
(b) appoints a Custodian for the Company or for all or
substantially all of its property, or
(c) orders the liquidation of the Company, and the order or decree
remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in the
series. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
(Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the series notify the Company of the Default and the Company does not
cure the Default within the time specified after receipt of the notice. (Section
6.01) The Trustee may require indemnity reasonably satisfactory to it before it
enforces the Unsecured Debt Indenture or the Securities of the series. (Section
7.01) Subject to certain limitations, Holders of a majority in principal amount
of the Securities of the series may direct the Trustee in its exercise of any
trust or power. (Section 6.05) The Trustee may withhold from the Holder of the
Security notice of any continuing Default (except a Default in payment of
principal or interest) if it in good faith determines that withholding notice is
in their interest. (Section 7.04) The Company is required to furnish the
Trustee, not less than annually, a brief certificate as to the Company's
compliance with all conditions and covenants under the Unsecured Debt Indenture.
(Section 4.04)
The failure to redeem any Securities subject to a Conditional Redemption
(as defined) is not an Event of Default if any event on which such redemption is
so conditioned does not occur before the redemption date. (Section 6.01)
The Unsecured Debt Indenture does not have a cross-default provision. Thus,
a default by the Company on any other debt would not constitute an Event of
Default.
AMENDMENTS AND WAIVERS
The Unsecured Debt Indenture and the Securities or any coupons of the
series may be amended, and any default may be waived as follows: the Holders of
a majority in principal amount of a series by notice to the Trustee may waive an
existing Default on the series and its consequences except: (a) a Default in the
payment of the principal of or interest on the series, or (b) a Default in
respect of a provision described in this paragraph that cannot be amended
without the consent of the Holder of each Security affected thereby. (Section
6.04) The Securities and the Unsecured Debt Indenture may be amended with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Securities of all series affected voting as one class. (Section 9.02)
However, without the consent of each Holder of Security affected thereby, no
amendment or waiver may (a) extend the stated maturity of the principal of, or
any installment or principal of or interest on, any such Security, or reduce the
principal amount thereof or the rate of interest thereon or premium (if any),
payable upon the redemption thereof, or reduce the obligation of the Company to
pay principal amounts, or reduce the amount of the principal of a Discounted
Security that would be due and payable upon a declaration of acceleration of the
maturity or change the coin or currency in which, any such
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Security of such series or any principal, premium (if any), or interest thereon
is payable or impair the right to institute suit for the enforcement of any such
payment on or after the due date thereof (or, in the case of redemption, on or
after the redemption date), or (b) reduce the percentage in principal amount of
the outstanding Securities of any series, the consent of whose Holders is
required for any modifications or amendments to the Unsecured Debt Indenture or
to the terms and conditions of that series of Securities, or to approve any
supplemental indenture relating to such series, or the consent of whose Holders
is required for any waiver with respect to such series (of compliance with
certain provisions of the Unsecured Debt Indenture or certain default thereunder
and their consequences) provided for in the Unsecured Debt Indenture, or (c)
modify any of the provisions described under this paragraph, except to increase
any such percentage or to provide that certain other provisions of the Unsecured
Debt Indenture cannot be modified or waived without the consent of the Holder of
each Security affected thereby. (Section 9.02)
Without the consent of any Holders, the Company may enter into one or more
supplemental indentures, in order among other things (a) to evidence the
succession of another Person to the Company and the assumption by any such
successor of the covenants of the Company contained in the Unsecured Debt
Indenture and in the Securities; (b) to add to, change or eliminate any of the
provisions of the Unsecured Debt Indenture in respect of one or more series of
Securities; provided, however, that any such addition, change or elimination
shall either (i) not adversely affect the rights of the Holders of series in any
material respect, or (ii) not apply to any series of Securities created prior to
the execution of such supplemental indenture where such addition, change or
elimination has an adverse effect on the right of the Holders of such Securities
in any material respect; (c) to establish the form or terms of Securities of any
series as permitted pursuant to the Unsecured Debt Indenture; (d) to evidence
and provide for the acceptance of appointment under the Unsecured Debt Indenture
by a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of the Unsecured Debt Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
thereunder by more than one Trustee; or (e) to cure any ambiguity or defect in
and to correct or supplement any provision in the Unsecured Debt Indenture or
any Security of any series that may be inconsistent with any other provision in
the Unsecured Debt Indenture or in the Security of such series, or to make any
other provisions with respect to matters or questions arising under the
Unsecured Debt Indenture; provided, however, that any such action pursuant to
this clause (e) shall not adversely affect the rights of the Holders of
Securities of any series in any material respect. (Section 9.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Securities of a series may be defeased in accordance with their terms and,
unless the Officers' Certificate or supplemental indenture establishing the
terms of the series otherwise provides, as set forth below. The Company at any
time may terminate as to a series all of its obligations (except for certain
obligations, including obligations with respect to the defeasance trust and
obligations to register the transfer or exchange of a Security, to replace
destroyed, lost or stolen Securities and coupons and to maintain agencies in
respect of the Securities) with respect to the Securities of the series and any
related coupons and the Unsecured Debt Indenture ("legal defeasance"). The
Company at any time may terminate as to a series its obligations with respect to
the Securities and coupons of the series under the covenant described under
"Certain Covenants -- Limitations on Liens" and any other restrictive covenants
which may be applicable to a particular series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to the covenant described under "Certain
Covenants -- Limitations on Liens" or any other restrictive covenants which may
be applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest on the Securities of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for Federal income tax purposes. "U.S. Government
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Obligations" are direct obligations of the United States of America which have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates representing
an ownership interest in such obligations. (Section 8.02)
REGARDING THE TRUSTEE
Firstar Bank Milwaukee, N.A., as successor to Firstar Trust Company, will
act as Trustee and Registrar for Securities issued under the Unsecured Debt
Indenture and, unless otherwise indicated in a Prospectus Supplement, the
Trustee will also act as Transfer Agent and Paying Agent with respect to the
Securities. (Section 2.03) The Company may remove the Trustee with or without
cause if the Company so notifies the Trustee six months in advance and if no
Default occurs or is continuing during the six-month period. (Section 7.07) The
Trustee is also one of the trustees under the First Mortgage Indenture for the
Company's First Mortgage Bonds.
The Company maintains general checking accounts with the Trustee and with
several banks which are affiliates of the Trustee. The Company's parent, IEC,
has $3.6 million in lines of credit with the Trustee, which are part of $150
million in lines of credit maintained by IEC with various banks. In addition,
the Company and IEC each maintain short-term borrowing agreements with the
Trustee pursuant to which the Company and IEC may borrow up to $50 million and
$50 million, respectively. Judith D. Pyle, a director of the Company, is a
director of the Trustee's parent corporation, Firstar Corporation.
BOOK-ENTRY ONLY SYSTEM
The Debentures may be issued initially in the form of one or more global
securities under a book-entry only system operated by a securities depositary.
Unless otherwise specified in the Prospectus Supplement, the Depository Trust
Company ("DTC") will act as securities depositary for the Debentures, which
would be registered in the name of CEDE & Co., as registered securityholder and
nominee for DTC. Individual purchases of Book-Entry Interests (as defined below)
in any such Debentures will be made in book-entry form. Purchasers of Book-Entry
Interests in such Debentures will not receive certificates representing their
interests in such Debentures. So long as CEDE & Co., as nominee of DTC, is the
securityholder, references herein to holders of the Debentures or registered
owners will mean CEDE & Co., rather than the owners of Book-Entry Interests in
Debentures.
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 Exchange Act. DTC
holds securities deposited by its participants (the "DTC Participants") and
facilitates the settlement of securities transactions among DTC Participants in
such securities through electronic computerized book-entry changes in accounts
of the DTC Participants, thereby eliminating the need for physical movement of
securities certificates. Direct DTC Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom (including, possibly, the underwriters with respect
to the Debentures), together with the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc., own DTC. 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 a custodial relationship with a DTC Participant, either
directly or indirectly (the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests in any Debentures will not
receive certificates. Each DTC Participant will receive a credit balance in the
records of DTC in the amount of such DTC Participant's interest in such
Debentures, which will be confirmed in accordance with DTC's standard
procedures. The ownership interest of each actual purchaser of a Book-Entry
Interest in Debentures (the "Book-Entry Interests") will be recorded through the
records of the DTC Participant or through the records of the Indirect
Participant. Owners of Book-Entry Interests should receive from the DTC
Participant or Indirect Participant a written confirmation of their purchase
providing details of the Book-Entry Interests acquired. Transfers of Book-Entry
Interests will be accomplished by book entries made by the DTC Participants or
Indirect
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Participants who act on behalf of the owners of Book-Entry Interests. Owners of
Book-Entry Interests will not receive certificates representing their ownership
of Book-Entry Interests with respect to any Debentures except as described below
upon the resignation of DTC.
Under the Unsecured Debt Indenture, payments made by the Trustee to DTC or
its nominee will satisfy the Company's obligations under the Unsecured Debt
Indenture to the extent of the payments so made. Owners of Book-Entry Interests
will not be or be considered by the Company or the Trustee to be, and will not
have any rights as, holders of Debentures under the Unsecured Debt Indenture.
NEITHER THE COMPANY NOR THE TRUSTEE UNDER THE UNSECURED DEBT INDENTURE WILL
HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT
PARTICIPANT OR ANY OWNER OF A BOOK-ENTRY INTEREST OR ANY OTHER PERSON NOT SHOWN
ON THE REGISTRATION BOOKS OF SUCH TRUSTEE AS BEING A HOLDER OF DEBENTURES WITH
RESPECT TO: (1) ANY DEBENTURES; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY
DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR
ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY OWNER OF A
BOOK-ENTRY INTEREST IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR
INTEREST ON SUCH DEBENTURES; (4) THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR
INDIRECT PARTICIPANT OF ANY NOTICE TO ANY OWNER OF A BOOK-ENTRY INTEREST WHICH
IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE UNSECURED DEBT INDENTURE TO BE
GIVEN TO HOLDERS OF DEBENTURES; (5) THE SELECTION OF THE OWNERS OF A BOOK-ENTRY
INTEREST TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF ANY
DEBENTURES; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS NOMINEE
AS HOLDER OF DEBENTURES.
Principal and redemption price of, and interest payments on, Debentures
registered in the name of DTC or its nominee will be made to DTC or such
nominee, as registered owner of such Debentures. DTC is responsible for
disbursing such payments to the appropriate DTC Participants and such DTC
Participants, and any Indirect Participants, are in turn responsible for
disbursing the same to the owners of Book-Entry Interests. Unless it has reason
to believe it will not receive payment, DTC's current practice is to credit the
accounts of the DTC Participants on a payment date in accordance with their
respective holdings shown on the records of DTC. Payments by DTC Participants
and Indirect Participants to owners of Book-Entry Interests will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such DTC Participant or
Indirect Participant and not of DTC, the Company or the Trustee, subject to any
statutory and regulatory requirements as may be in effect from time to time.
DTC Participants and Indirect Participants carry the "position" of the
ultimate Book-Entry Interest owner on their records, and will be responsible for
providing information to the ultimate Book-Entry Interest owner as to the
Debentures in which the Book-Entry Interest is held, debt service payments
received, and other information. Each person for whom a DTC Participant or
Indirect Participant acquires an interest in Debentures, as nominee, may desire
to make arrangements with such DTC Participant or Indirect Participant to
receive a credit balance in the records of such DTC Participant or Indirect
Participant, to have all notices of redemption or other communications to or by
DTC which may affect such persons forwarded in writing by such DTC Participant
or Indirect Participant, and to have notification made of all debt service
payments.
Purchases, transfers and sales of Book-Entry Interests by the ultimate
Book-Entry Interest owners may be made through book entries made by DTC
Participants or Indirect Participants or others who act for the ultimate
Book-Entry Interest owner. The Trustee under the Unsecured Debt Indenture, the
Company and the underwriters, as such, have no role in those purchases,
transfers or sales.
Owners of Book-Entry Interests may be charged a sum sufficient to cover any
tax, fee, or other governmental charge that may be imposed in relation to any
transfer or exchange of a Book-Entry Interest.
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The Trustee will recognize and treat DTC (or any successor securities
depositary) or its nominee as the holder of Debentures registered in its name or
the name of its nominee for all purposes, including payment of debt service,
notices, enforcement of remedies and voting. Under DTC's current practice, a
proxy will be given to the DTC Participants holding Book-Entry Interests in
Debentures in connection with any matter on which holders of such Debentures are
asked to vote or give their consent. Crediting of debt service payments and
transmittal of notices and other communications by DTC to DTC Participants, by
DTC Participants to Indirect Participants and by DTC Participants and Indirect
Participants to the ultimate Book-Entry Interest owners are the responsibility
of those persons and will be handled by arrangements among them and are not the
responsibility of the Trustee, the Company or any underwriter, as such.
The Trustee, so long as a book-entry system is used for any series of
Debentures, will send any notice of redemption and any other notices required by
the Unsecured Debt Indenture to be sent to holders of such Debentures only to
DTC (or such successor securities depositary) or its nominee. Any failure of DTC
to advise any DTC Participant, or of any DTC Participant or Indirect Participant
to notify the Book-Entry Interest owner, of any such notice and its content or
effect will not affect the validity of the redemption of the Debentures called
for redemption, or any other action premised on that notice. In the event of a
call for redemption, the Trustee's notification to DTC will initiate DTC's
standard call process, and, in the event of a partial call, its lottery process
by which the call will be randomly allocated to DTC Participants holding
positions in the Debentures to be redeemed. When DTC and DTC Participants
allocate the call for redemption, the owners of the Book-Entry Interests that
have been called should be notified by the broker or other person responsible
for maintaining the records of those interests and subsequently credited by that
person with the proceeds once such Debentures are redeemed.
The Company, the Trustee and any underwriter or agent cannot and do not
give any assurances that DTC, DTC Participants or others will distribute
payments of debt service on Debentures made to DTC or its nominee as the
registered owner, or any redemption or other notices, to the Book-Entry Interest
owners, or that they will do so on a timely basis, or that DTC will serve and
act in the manner described in this Prospectus.
The Company understands that the current "Rules" applicable to DTC and DTC
Participants are on file with the Commission, and that the current "Procedures"
of DTC to be followed in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depositary, and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue individual certificates to owners of Book-Entry Interests in exchange
for the Debentures held by DTC or its nominee, as the case may be. In such
instance, an owner of a Book-Entry Interest will be entitled to physical
delivery of certificates equal in principal amount to such Book-Entry Interest
and to have such certificates registered in its name. Individual certificates so
issued will be issued in denominations of $1,000 or any multiple thereof.
Neither the Company, the Trustee nor any underwriter makes any
representation as to the accuracy of the above description of DTC's business,
organization and procedures, which is based upon information furnished by DTC.
PLAN OF DISTRIBUTION
The Company may sell the Debentures in one or more of the following ways:
(a) through underwriters or dealers; (b) directly to a limited number of
purchasers or to a single purchaser; or (c) through agents. The Prospectus
Supplement with respect to each series of the Debentures sets forth, among other
things, the terms of the offering of the Debentures, including the name or names
of the underwriters, dealers or agents, the purchase price of the Debentures and
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' or agents' compensation and any discounts and
commissions allowed or reallowed or paid to dealers and any registered
securities exchanges on which the Debentures may be listed. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
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If any series of the Debentures are sold to underwriters or dealers, the
Prospectus Supplement relating thereto will describe the nature of the
obligation of the underwriters or dealers to purchase and pay for the
Debentures. The Debentures may be offered to the public either through an
underwriting syndicate represented by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Robert W. Baird & Co. Incorporated and Legg Mason Wood Walker,
Incorporated as underwriters, or directly by such firms acting as underwriters.
The underwriters with respect to a particular underwritten offering of the
Debentures 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 of such Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
underwriters to purchase the Debentures will be subject to certain conditions
precedent and the underwriters will be obligated to purchase all the Debentures
if any are purchased. The distribution of the Debentures by the underwriters may
be effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
The Debentures may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Debentures in respect of which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated
in the Prospectus Supplement, any such agent is acting on a best efforts basis
for the period of its agency.
Underwriters, dealers or agents designated by the Company in connection
with the distribution of the Debentures may be entitled to indemnification by
the Company against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribution with respect to payments
which the underwriters or agents may be required to make in respect thereof.
In the event that the Debentures are not listed on a registered national
securities exchange, certain broker-dealers may make a market in the Debentures,
but will not be obligated to do so and may discontinue any market-making at any
time without notice. No assurance can be given that any broker-dealer will make
a market in the Debentures or as to the liquidity of the trading market for the
Debentures, whether or not the Debentures are listed on a registered national
securities exchange. The Prospectus Supplement with respect to any series of the
Debentures will state, if known, whether or not any broker-dealer intends to
make a market in the Debentures. If no such determination has been made, the
Prospectus Supplement will so state.
LEGAL OPINIONS
The validity of the Debentures will be passed upon for the Company by Foley
& Lardner, Milwaukee, Wisconsin. Certain legal matters will be passed upon for
the underwriters, dealers, purchasers or agents by Chadbourne & Parke LLP, New
York, New York.
EXPERTS
The consolidated financial statements and schedule of the Company at
December 31, 1997 and 1996 and for each of the three years in the period ending
December 31, 1997 incorporated by reference in this Prospectus and in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
13
<PAGE> 19
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds........................ S-2
Selected Financial Information......... S-2
Certain Terms of the Debentures........ S-3
Underwriting........................... S-5
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratios of Earnings to Fixed Charges.... 3
Description of the Debentures.......... 4
Book-Entry Only System................. 10
Plan of Distribution................... 12
Legal Opinions......................... 13
Experts................................ 13
</TABLE>
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$60,000,000
WISCONSIN POWER
AND LIGHT COMPANY
5.70% DEBENTURES
DUE OCTOBER 15, 2008
----------------------------------
PROSPECTUS SUPPLEMENT
----------------------------------
MERRILL LYNCH & CO.
ROBERT W. BAIRD & CO.
INCORPORATED
LEGG MASON WOOD WALKER
INCORPORATED
OCTOBER 27, 1998
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