<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 29, 1999
PP&L Transition Bond Company LLC.
(Exact name of registrant as specified in its charter)
Delaware 333-75369 23-3004428
-------- --------- ----------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File No.) Identification No.)
Two North Ninth Street, GENA9-2, Room 3
Allentown, Pennsylvania 18101
----------------------- -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (610) 774-7934
- --------------------------------------------------------------------------------
<PAGE>
Item 5. Other Events
------------
The Registrant registered issuances of Transition Bonds on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933 by a
Registration Statement on Form S-3 (Registration File No. 333-75369). Pursuant
to a base prospectus, dated July 29, 1999, and a prospectus supplement, dated
July 29, 1999, the Registrant plans to issue approximately $2,420,000,000 in
aggregate principal amount of its Transition Bonds, Series 1999-1 on or about
August 10, 1999. This Current Report on Form 8-K submits a press release
related to this issuance. This press release is filed as Exhibit 99.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PP&L Transition Bond Company LLC
By: /s/ James E. Abel
---------------------------------------
Name: James E. Abel
Title: Manager
Dated: July 29, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99 Press Release issued by PP&L, Inc., the entity
which is the sole owner of the Registrant
<PAGE>
EXHIBIT 99
PRESS RELEASE
<PAGE>
July 29, 1999
Contact: James E. Abel, (610) 774-5987
PP&L Transition Bond Company LLC to Issue $2.42 Billion of Transition Bonds
- ---------------------------------------------------------------------------
ALLENTOWN, Pa.---PP&L Transition Bond Company LLC agreed today (7/29)
to sell $2.42 billion of transition bonds in eight different classes, carrying
expected average lives ranging from 1 year up to 8.7 years. PP&L Transition
Bond Company is a wholly owned subsidiary of PP&L, Inc., which is the major
subsidiary of PP&L Resources, Inc. (NYSE: PPL). The sale will securitize a
portion of PP&L, Inc.'s competition-related transition costs in connection with
the deregulation of the generation portion of Pennsylvania's electric utility
industry.
"Issuance of these bonds, coupled with related financing transactions,
will create savings that improve earnings for our shareowners and result in
lower rates for PP&L, Inc.'s customers," said John R. Biggar, PP&L Resources
senior vice president and chief financial officer.
Biggar went on to add, "We have taken a number of important steps in
recent months that maximize the benefits of this transaction for both our
shareowners and our customers. These steps include previously executed
transactions that will permit the repurchase of 14 million shares of PP&L
Resources common stock concurrent with the closing on the transition bonds. We
have also entered into a series of interest rate hedges over the last five
months that will result in an effective average interest rate on the transition
bonds that is significantly below current market rates." Biggar added, "PP&L is
currently offering to repurchase about $1.7 billion of its highest coupon debt
securities using the proceeds from securitization to fund these repurchases.
"As a result of these transactions, we expect to see an increase of
about 5 cents per share in year 2000 earnings over the previous forecast of
$2.40 per share, and an increase of
<PAGE>
10 cents per share in year 2001 earnings over the previous forecast of $2.60 per
share," Biggar said.
Savings from securitization are expected to reduce PP&L customer bills
by an average of about 1 percent through Dec. 31, 2008. The actual reduction
will vary year by year in that period and also by customer class and level of
use.
This reduction will apply to all of PP&L, Inc.'s retail delivery
customers, whether they buy their generation supply from PP&L, Inc. or from
another company.
The specific classes, principal amounts of the transition bonds,
average lives, coupon rates, prices and yields are as follows:
PP&L Transition Bond Company Bonds
- ---------------------------------------------------------------------------
Class Principal Amount Average Coupon Price Yield
($ millions) Life (years) Rate
- ---------------------------------------------------------------------------
A1 293 1.0 6.08% 99.9927 6.125%
A2 178 2.0 6.41% 99.9821 6.466%
A3 303 3.0 6.60% 99.9992 6.651%
A4 201 4.0 6.72% 99.9947 6.775%
A5 313 5.0 6.83% 99.9659 6.894%
A6 223 6.0 6.96% 99.9820 7.022%
A7 455 7.2 7.05% 99.9949 7.111%
A8 454 8.7 7.15% 99.9941 7.213%
- ---------------------------------------------------------------------------
The sale is the fifth largest such transaction involving transition
cost asset-backed bonds to date in the United States.
All of the transition bonds are being sold to a syndicate of
underwriters managed by Morgan Stanley Dean Witter and consisting of Morgan
Stanley Dean Witter; Credit Suisse First Boston; Merrill Lynch & Co.; Salomon
Smith Barney; Banc One Capital Markets, Inc.; Chase Securities Inc.; First Union
Capital Markets Corp.; Mellon Financial Markets, Inc.; Janney Montgomery Scott
Inc.; and Pryor, McClendon, Counts & Co., Inc.
The transition bonds are expected to be rated AAA by Standard & Poor's
Rating Group and Fitch IBCA and Aaa by Moody's Investor Service.
In a series of orders issued by the Pennsylvania Public Utility
Commission, PP&L, Inc. was granted the right to securitize up to $2.85 billion
of a total of $2.97 billion of transition costs approved for recovery.
PP&L Resources, Inc. is a Fortune 500 company based in Allentown,
Pa. The PP&L Resources family of companies includes PP&L, Inc., which delivers
electricity to
<PAGE>
1.3 million customers in eastern and central Pennsylvania, generates
electricity, and markets wholesale energy in the United States and in Canada;
PP&L EnergyPlus Co., LLC, which sells competitively priced energy and energy
services to newly deregulated markets; PP&L Global, Inc., which develops
electric generation throughout the United States and around the world and has
ownership interests in United Kingdom and Latin American companies that
distribute electricity to 2 million customers; Penn Fuel Gas, Inc., which sells
and distributes natural gas and propane in Pennsylvania and Maryland; and PP&L
Spectrum, Inc., Burns Mechanical, Inc., H. T. Lyons, Inc., McCarl's Inc. and
McClure Company, which provide energy management and mechanical contracting and
engineering services to businesses.
See our Internet home page, at www.pplresources.com, for recent news
--------------------
releases and other information about PP&L Resources.
07B2999A1
FINANCIAL
Certain statements which are contained in this news release are
"forward-looking statements" within the meaning of the federal securities laws.
Although PP&L Resources and PP&L, Inc. believe that the expectations reflected
in these statements are reasonable, there can be no assurance that these
expectations will prove to have been correct. These forward-looking statements
involve a number of risks and uncertainties, and actual results may differ
materially from the results discussed in the forward-looking statements. The
following are among the factors that could cause actual results to differ
materially from the forward-looking statements: state and federal regulatory
developments; new state or federal legislation; national or regional economic
conditions; market demand and prices for energy, capacity and fuel; weather
variations affecting customer energy usage; competition in retail and wholesale
power markets; the need for and effect of any business or industry
restructuring; PP&L Resources' and PP&L, Inc.'s profitability and liquidity; new
accounting requirements or new applications of existing requirements; operating
performance of plants and other facilities; environmental conditions and
requirements; system conditions (including actual results in achieving Year 2000
compliance by PP&L Resources, its subsidiaries and others) and operating costs;
performance of new ventures; political, regulatory or economic conditions in
foreign countries where PP&L Global makes investments; foreign exchange rates;
and PP&L Resources' and PP&L, Inc.'s commitments and liabilities. Any such
forward-looking statements should be considered in light of such important
factors and in conjunction with PP&L Resources' and PP&L, Inc.'s documents on
file with the Securities and Exchange Commission. New factors that could cause
actual results to differ materially from those described in forward-looking
statements emerge from time to time, and it is not possible for PP&L Resources
or PP&L, Inc. to predict all of such factors, or the extent to which any such
factor or combination of factors may cause actual results to differ from those
contained in any forward-looking statement. Any forward-looking statement speaks
only as of the date on which such statement is made, and PP&L Resources and
PP&L, Inc. undertake no obligation to update the information contained in such
statement to reflect subsequent developments or information.
