<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-33098
Prospectus Supplement to Prospectus dated May 12, 2000.
CLECO CORPORATION
[CLECO LOGO]
$100,000,000 8 3/4% Notes due June 1, 2005
----------------
Maturity
. The notes will mature on June 1, 2005.
Interest
. Interest on the notes is payable on June 1 and December 1 of each year,
beginning December 1, 2000.
Redemption
. We may redeem some or all of the notes at any time. The redemption prices are
described beginning on page S-8.
. There is no sinking fund for the notes.
Ranking
. The notes are unsecured and rank equally with all our existing and future
unsecured and unsubordinated indebtedness.
. The notes effectively rank below all of the liabilities of our subsidiaries.
Listing
. We do not intend to list the notes on any securities exchange.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
----------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----------
<S> <C> <C>
Initial public offering price............................. 99.331% $99,331,000
Underwriting discount..................................... 0.625% $ 625,000
Proceeds, before expenses, to us.......................... 98.706% $98,706,000
</TABLE>
Your purchase price will also include any interest that has accrued on the
notes since May 25, 2000.
----------------
The underwriter listed below will purchase the notes from us on a firm
commitment basis and offer them to you, subject to certain conditions. The
notes will be delivered through the book-entry delivery system of The
Depository Trust Company on May 25, 2000.
BNY Capital Markets, Inc.
----------------
The date of this prospectus supplement is May 18, 2000.
<PAGE>
You should rely only on the information contained or incorporated by reference
in this prospectus supplement and the accompanying prospectus. We have not
authorized anyone else to provide you with any additional or different
information. If you receive any unauthorized information, you should not rely
on it. We are offering to sell the notes only in places where the offers and
sales are permitted. The information contained in this prospectus supplement or
the accompanying prospectus is current only as of the date of this prospectus
supplement or the accompanying prospectus and any information incorporated by
reference is current only as of the date of the document incorporated by
reference.
----------------
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Where You Can Find More Information........................................ S-3
About Cleco Corporation.................................................... S-3
Recent Developments........................................................ S-4
Capitalization............................................................. S-5
Ratio of Earnings to Fixed Charges......................................... S-5
Use of Proceeds............................................................ S-5
Selected Financial Information............................................. S-6
Description of the Notes................................................... S-7
Underwriting............................................................... S-12
Legal Matters.............................................................. S-12
Prospectus
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 3
Cautionary Statements Regarding Forward-Looking Information................ 4
Cleco Corporation.......................................................... 4
Ratio of Earnings to Fixed Charges......................................... 5
Use of Proceeds............................................................ 5
Description of Our Debt Securities......................................... 5
Plan of Distribution....................................................... 18
Validity of Securities..................................................... 20
Experts.................................................................... 20
</TABLE>
S-2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. We are incorporating by reference the documents
listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all the
notes.
. Our Annual Report on Form 10-K for the year ended December 31, 1999,
filed with the SEC on March 30, 2000; and
. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000,
filed with the SEC on May 15, 2000.
ABOUT CLECO CORPORATION
We are a diversified energy services company, operating through three
principal subsidiaries: Cleco Utility Group Inc., Cleco Midstream Resources LLC
and Utility Construction & Technology Solutions LLC, which we will refer to as
UtiliTech.
Effective July 1, 1999, Cleco Utility Group reorganized into a holding
company structure. This reorganization resulted in the creation of Cleco
Corporation as a new holding company. Pursuant to the reorganization, we became
the owner of all of Cleco Utility Group's outstanding common stock. Holders of
Cleco Utility Group's existing common stock and two series of preferred stock
exchanged their stock in Cleco Utility Group for stock in us. Shares of
preferred stock in three series that did not approve the reorganization were
redeemed for $5.7 million. The reorganization had no impact on our consolidated
financial statements because the reorganization was accounted for similarly to
a pooling of interest.
Cleco Utility Group is an electric utility and contains our regulated
generation, transmission and distribution assets. Cleco Utility Group provides
regulated electric utility services to approximately 246,000 customers in the
State of Louisiana.
Cleco Midstream is the entity through which we operate our nonregulated
electric generation, energy marketing, natural gas pipeline and oil and natural
gas production businesses. Cleco Midstream owns our interest in Cleco
Evangeline LLC and Acadia Power Holding LLC.
. Cleco Evangeline is currently constructing and repowering a 750 megawatt
(MW), natural gas-fired generating station in St. Landry, Louisiana. We
have entered into a 20-year tolling agreement with Williams Energy
Marketing & Trading Company. Under the tolling agreement, Williams Energy
has the right to own and market the electricity produced by the plant and
will supply the natural gas fuel required by the plant. We will own the
plant, which is expected to commence operations in mid-2000, and collect
a fee from Williams Energy for operating and maintaining the plant.
. Acadia Power Holding owns our 50% interest in a 50/50 joint venture
between us and Calpine Corporation formed to own and operate a 1,000 MW
natural gas-fired generating station in Eunice, Louisiana. Construction
of the plant is expected to start in mid-2000, with commercial operations
scheduled to commence in mid-2002. With Calpine, we are currently
considering a number of off-take arrangements for the plant.
UtiliTech provides line construction and engineering services to electric
utilities, municipalities and rural electric cooperatives primarily in
Arkansas, Louisiana, Mississippi and Texas.
Our principal executive offices are located at 2030 Donahue Ferry Road,
Pineville, Louisiana 71360-5226, and our telephone number at that location is
(318) 484-7400.
S-3
<PAGE>
RECENT DEVELOPMENTS
First Quarter Results
For the three months ended March 31, 2000, we reported net income applicable
to common stock of $12.3 million, an increase of 52.9% from the $8.0 million of
net income applicable to common stock reported for the three months ended March
31, 1999. Excluding an extraordinary gain of $2.5 million related to the
purchase of debt by one of our subsidiaries, we reported net income applicable
to common stock of approximately $9.8 million for the three months ended March
31, 2000. This represented a 21.6% increase over the level reported for the
three months ended March 31, 1999.
We reported total operating revenue of $141.0 million and operating income
of $23.1 million for the three months ended March 31, 2000, which represented
increases of 15.9% and 18.6%, respectively, over the levels reported for the
three months ended March 31, 1999. The increases in total operating revenue,
operating income and net income applicable to common stock were primarily
attributable to Cleco Utility Group. For the three months ended March 31, 2000,
Cleco Utility Group experienced a 5.8% increase in kilowatt-hour sales, as
compared to the three months ended March 31, 1999, primarily due to customer
growth and warmer weather in March 2000.
Start-up of Cleco Evangeline
We expect to commence full operation of the Cleco Evangeline plant on July
1, 2000, one month later than originally planned. A low pressure rotor in one
of the plant's turbines was damaged during a planned refurbishment. As a
result, a portion of the plant's generating capacity has been put on hold until
the rotor can be repaired. We expect that more than two-thirds of the plant's
generating capacity will be operational on or before June 1, 2000, as
scheduled.
S-4
<PAGE>
CAPITALIZATION
The following table presents our capitalization as of December 31, 1999 on
an historical basis and as adjusted to reflect the sale of the notes and the
application of the net proceeds therefrom as described under "Use of Proceeds."
You should read this table in conjunction with our consolidated financial
statements, related notes and other financial information we have incorporated
by reference.
<TABLE>
<CAPTION>
December 31, 1999
---------------------
As
Actual Adjusted
---------- ----------
(In thousands)
<S> <C> <C>
Cash and cash equivalents............................... $ 25,161 $ 105,161
========== ==========
Short-term debt, including current portion of long-term
debt................................................... $ 53,363 $ 33,363
========== ==========
Long-term debt:
Long-term bank loans................................... $ 9,106 $ 9,106
Notes offered hereby................................... -- 100,000
Other long-term debt, excluding current portion........ 577,486 577,486
---------- ----------
Total long-term debt.................................. 586,592 686,592
Preferred stock......................................... 13,889 13,889
Total common stockholders' equity....................... 438,656 438,656
---------- ----------
Total capitalization................................... $1,039,137 $1,139,137
========== ==========
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table presents our ratio of earnings from continuing
operations to fixed changes for each of the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1999 1998 1997 1996 1995
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings from continuing
operations to fixed charges...................... 3.77x 3.80x 3.74x 3.70x 3.49x
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of earnings from continuing operations before income taxes and
preferred stock dividends. Fixed charges consist of interest expense,
amortization of debt expense and premiums, net, and an estimate of the interest
within rental expense.
USE OF PROCEEDS
We intend to use approximately $38.6 million of the net proceeds from the
sale of the notes to fund our investment in Cleco Evangeline. We intend to use
approximately $20.0 million of the net proceeds from the sale of the notes to
retire short-term debt that we borrowed principally to provide working capital.
As of March 31, 2000, there was approximately $32.2 million of short-term debt
outstanding at Cleco Corporation and $19.5 million of short-term debt
outstanding at our subsidiaries, in each case excluding the current portion of
long-term debt. The weighted average interest rate on short-term debt
outstanding at Cleco Corporation on March 31, 2000 was 6.12%. We intend to use
the remaining net proceeds from the sale of the notes for general corporate
purposes, including the funding of a portion of our investment in the Acadia
Power project.
S-5
<PAGE>
SELECTED FINANCIAL INFORMATION
You should read our selected financial information set forth below in
conjunction with our consolidated financial statements, related notes and other
financial information we have incorporated by reference.
We have included EBITDA in our selected financial information because it is
a widely accepted indicator of a company's ability to service debt. You should
be aware, however, that EBITDA is not a generally accepted accounting
principles (GAAP) measure and may not be comparable to similarly titled items
of other companies. You should not consider EBITDA as an alternative to net
income or any other GAAP measure of performance as an indicator of our
operating performance or as a measure of our liquidity.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1999 1998 1997
---------- ---------- ----------
(In thousands)
<S> <C> <C> <C>
Income Statement Data
Total operating revenue....................... $ 768,200 $ 515,175 $ 456,245
Operating income.............................. 112,541 106,965 106,539
Net income applicable to common stock......... 54,756 51,664 50,402
Other Data
EBITDA (a).................................... $ 161,270 $ 155,012 $ 153,677
Depreciation and amortization................. 51,301 50,852 47,719
Capital expenditures.......................... 179,226 94,030 77,525
Total interest charges........................ 29,603 27,360 28,586
Income taxes.................................. 27,224 26,666 27,729
Preferred dividends........................... 2,010 2,137 2,117
Balance Sheet Data
Total assets.................................. $1,704,650 $1,429,000 $1,361,044
PP&E, net..................................... 1,211,617 1,089,798 1,025,562
Long-term debt................................ 586,592 343,368 366,260
Preferred stock............................... 13,889 18,475 17,456
Total common stockholders' equity............. 438,656 424,691 408,751
</TABLE>
- --------
(a) EBITDA reflects earnings before total interest charges, net of allowance
for funds used during construction, income taxes, depreciation and
amortization.
S-6
<PAGE>
DESCRIPTION OF THE NOTES
You should read the following summary of selected provisions of the notes in
conjunction with the description of our debt securities in the accompanying
prospectus, which includes provisions that may be important to you.
General
The notes will mature on June 1, 2005 and will bear interest at 8 3/4% per
year from May 25, 2000. We:
. will pay interest semiannually in arrears on June 1 and December 1 of
each year, commencing December 1, 2000
. will pay interest to the person in whose name a note is registered at
the close of business on the May 15 or November 15 preceding the
interest payment date
. will calculate interest on the basis of a 360-day year of twelve 30-
day months
. will make all payments by wire transfer for notes held in book-entry
form.
Interest payable on any interest payment date and at maturity or any
redemption date will be the amount of interest accrued from and including the
most recent interest payment date to which interest has been paid or duly
provided for, or from and including the date of issuance if no interest has
been paid or duly provided for with respect to the notes, to but excluding such
interest payment date or the maturity date or date of redemption, as the case
may be. If any interest payment date or the maturity date or date of earlier
redemption of the notes falls on a day that is not a business day, the payment
otherwise then due will be made on the next business day, and without any
interest or other payment in respect of any such delay, with the same force and
effect as if it were made on the date such payment was originally payable.
We will issue the notes under a senior indenture dated as of May 1, 2000, as
amended or supplemented from time to time, between us and Bank One, N.A., as
trustee. The indenture does not limit the aggregate principal amount of debt
securities that may be issued under it. The notes constitute one of a series of
debt securities that may be issued from time to time under the indenture. The
notes will not be entitled to the benefit of any sinking fund.
Ranking
The notes will be our senior unsecured obligations and will rank equal in
right of payment with all of our other unsecured and unsubordinated
indebtedness. As of December 31, 1999, as adjusted to give effect to the
issuance of the notes and the use of proceeds from the issuance thereof, we
would have had an aggregate of approximately $720.0 million of consolidated
indebtedness, of which approximately $620.0 million would have been owed by
subsidiaries and therefore effectively senior to the notes. The indenture does
not restrict the amount of additional indebtedness that we or our subsidiaries
may incur.
Since we are a holding company, our ability to pay debt service on the notes
is dependent upon the cash flows of our subsidiaries and the ability of our
subsidiaries to pay dividends and make debt service payments to us. Certain of
our subsidiaries have contractual restrictions on the amount of dividends that
they may pay us. In addition, Cleco Utility Group, our largest subsidiary, is
subject to regulation by the Louisiana Public Service Commission, which may in
the future impose limits on the amount of dividends that Cleco Utility Group
may pay us.
Book-Entry Only Issuance--The Depository Trust Company
Upon issuance, the notes will be represented by one or more global
securities deposited with or on behalf of The Depository Trust Company (DTC),
which will act as depositary with respect to the notes. The global securities
representing the notes will be registered in the name of a nominee of DTC. This
means that we will
S-7
<PAGE>
not issue certificates to you for the notes. Each global security will be
issued to DTC, which will keep a computerized record of its participants (for
example, a broker) whose clients have purchased the notes. Each participant
will then keep a record of its clients. Except under the circumstances
described in the accompanying prospectus under the heading "Description of Our
Debt Securities--Global Securities," the notes will not be issuable in
definitive form.
A further description of DTC's procedures with respect to global securities
representing the notes is set forth in the accompanying prospectus under the
heading "Description of Our Debt Securities--Regarding DTC."
Optional Redemption
We may, at our option, redeem some or all of the notes at any time. If we
choose to do so, we or the indenture trustee will mail a notice of redemption
to you not less than 30 days and not more than 60 days before the redemption
occurs. The redemption price will be equal to 100% of the principal amount of
the notes to be redeemed plus accrued interest to (but excluding) the
redemption date and a make-whole premium, if any. The make-whole premium will
be an amount equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the redemption
date, of:
(a) each interest payment that, but for the redemption, would have
been payable on the note being redeemed, excluding any accrued
interest for the period prior to the redemption date; and
(b) the principal amount that, but for the redemption, would have
been payable at the final maturity of the note being redeemed;
over
(2) the principal amount of the note being redeemed.
The present values of interest and principal payments referred to in clause
(1) above will be determined in accordance with generally accepted principles
of financial analysis. These present values will be calculated by discounting
the amount of each payment of interest or principal from the date that each
payment would have been payable, but for the redemption, to the redemption date
at a discount rate equal to the Treasury Yield plus 20 basis points.
The make-whole premium will be calculated by an independent investment
banking institution of national standing appointed by us. If we fail to appoint
an independent investment banking institution at least 45 business days prior
to the redemption date, or if the institution we appoint is unwilling or unable
to calculate the make-whole premium, the calculation will be made by BNY
Capital Markets, Inc. or, if it is unwilling or unable to make the calculation,
by an independent investment banking institution of national standing appointed
by the indenture trustee.
"Treasury Yield" means a rate of interest per annum equal to the weekly
average yield to maturity of United States Treasury Notes that have a constant
maturity that corresponds to the remaining term to maturity of the notes,
calculated to the nearest 1/12th of a year (the "Remaining Term"). The Treasury
Yield will be determined as of the third business day immediately preceding the
applicable redemption date.
The weekly average yields of United States Treasury Notes will be determined
by reference to the most recent statistical release published by the Federal
Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or
any successor release. If this statistical release contains a weekly average
yield for United States Treasury Notes having a constant maturity that is the
same as the Remaining Term, then the Treasury Yield will be equal to that
weekly average yield. In all other cases, the Treasury Yield will be calculated
by interpolation, on a straight-line basis, between the weekly average yields
on the United States Treasury Notes that have a constant maturity closest to
and greater than the Remaining Term and the United
S-8
<PAGE>
States Treasury Notes that have a constant maturity closest to and less than
the Remaining Term, in each case as set forth in the referenced statistical
release. Any weekly average yields calculated by interpolation will be rounded
to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being
rounded upward. If weekly average yields for United States Treasury Notes are
not available in this statistical release or otherwise, then the Treasury Yield
will be calculated by interpolation of comparable rates selected by the
independent investment banking institution calculating the make-whole premium.
If less than all of the notes are redeemed, the indenture trustee will
choose the notes to be redeemed by any method that it deems fair and
appropriate.
Change of Control
If a change of control triggering event occurs, each holder of the notes
will have the right to require us to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of the notes at a price equal to 101%
of the aggregate principal amount thereof, plus accrued and unpaid interest, if
any, through the date of repurchase. We will mail notice of a change of control
triggering event to each holder of the notes within 30 days following any
change of control triggering event. A holder's right to require us to
repurchase the notes may be exercised no earlier than 30 days nor later than 60
days after the date on which we mail the holders of the notes notice of the
occurrence of a change of control triggering event.
The term "change of control triggering event" means the occurrence of a
change of control and a ratings event.
The term "change of control" means the occurrence of any of the following:
(1) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation) of all or substantially all
of our assets and the assets of our subsidiaries taken as a whole;
(2) the adoption of a plan relating to our liquidation or dissolution;
(3) the consummation of any transaction that results in any person or
group becoming the beneficial owner of more than 50% of the total
voting power of all classes of our voting securities then
outstanding; or
(4) the first day on which a majority of the members of our board of
directors are not continuing directors.
The term "ratings event" means, at any time within 90 days (which period is
extended so long as the rating of the notes is under publicly announced
consideration for a possible downgrade by either Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services, or both) after the date of public
notice of a change of control, or of our or any other person's intention to
effect a change of control, the rating of the notes is decreased below
investment grade by each of Moody's and Standard & Poor's.
The term "investment grade" means a rating of Baa3 or higher (or equivalent
successor categories) with respect to Moody's and a rating of BBB- or higher
(or equivalent successor categories) with respect to Standard & Poor's.
The term "continuing directors" means any member of our board of directors
who:
(1) was a member of our board of directors on the date the notes were
issued; or
(2) was nominated for election or elected with the approval of a
majority of the continuing directors who were then members of our
board of directors.
S-9
<PAGE>
Our ability to pay cash to the holders of the notes upon a repurchase may be
limited by our then existing financial resources. There can be no assurance
that we will have sufficient funds to repurchase the notes following a change
of control triggering event. Except as described above with respect to a change
of control triggering event, the indenture does not contain provisions
permitting the holders of the notes to require us to repurchase or redeem the
notes in the event of a change of control, or in the event we enter into one or
more highly leveraged transactions, regardless of whether a rating decline
results therefrom, or in the event we dispose of one or more of our business
units, nor are any such events deemed to be events of default under the terms
of the indenture or the notes.
Certain Covenants Relating to the Notes
Limitation on Consolidation, Merger and Sale of Assets. The notes are
entitled to the benefit of the restrictive covenant described in the
accompanying prospectus under the heading "Description of Our Debt Securities--
Consolidation, Merger and Sale of Assets."
Limitation on Liens on Voting Securities of Subsidiaries. We have agreed in
the supplemental indenture establishing the terms and provisions of the notes
that, so long as any notes remain outstanding, we will not, and will not permit
any subsidiary to, pledge or grant a security interest in, or permit any
pledge, security interest or other lien upon, any voting securities owned
directly or indirectly by us or them in any subsidiaries to secure any
indebtedness for borrowed money, without making effective provision to secure
the notes equally and ratably with the other indebtedness and any other
indebtedness similarly entitled to be equally and ratably secured. This
restriction will not apply, however, to:
(1) any pledge, security interest or encumbrance upon any voting
securities of our subsidiaries existing as of the closing date of
the offering of the notes,
(2) the creation or existence of any pledge, security interest or
encumbrance upon any voting securities of our subsidiaries
(a) created at the time of our acquisition (including acquisition
through merger or consolidation) of those voting securities or
within 24 months after our acquisition of those voting
securities to secure all or a portion of the purchase price for
those voting securities,
(b) existing on the voting securities at the time of our acquisition
of those voting securities or
(c) created solely to secure obligations incurred to finance the
refurbishment, improvement, installation, development or
construction of any asset of ours or our subsidiaries, which
obligations are incurred no later than 24 months after
completion of such refurbishment, improvement, installation,
development or construction, or
(3) any extension, renewal or refunding of any pledge, security
interest or encumbrance described in clauses (1) and (2).
Limitation on Issuance or Disposition of Voting Securities of Restricted
Subsidiaries. We have also agreed in the supplemental indenture that we will
not, and will not permit any restricted subsidiary to, issue, sell, assign,
transfer or otherwise dispose of, directly or indirectly, any voting securities
of any restricted subsidiary (except to us or to one or more restricted
subsidiaries or for the purpose of qualifying directors); provided, however,
that this limitation shall not apply if
(1) all or any part of such voting securities are issued, sold,
assigned, transferred or otherwise disposed of in a transaction for
consideration that is at least equal to the fair value of such
voting securities, as determined by the board of directors acting
in good faith, or
(2) the issuance, sale, assignment, transfer or other disposition is
required to comply with the order of a court or regulatory
authority of competent jurisdiction, other than an order issued at
our or a restricted subsidiary's request.
S-10
<PAGE>
The term "indebtedness" means all indebtedness, whether or not represented
by bonds, debentures, notes or other securities, created or assumed by us or
any subsidiary for the repayment of borrowed money. All indebtedness for
borrowed money secured by a lien upon property owned by us or any subsidiary
and upon which indebtedness for borrowed money we or that subsidiary
customarily pays interest, although we or that subsidiary have not assumed or
become liable for the payment of such indebtedness for borrowed money, shall be
deemed to be indebtedness of ours or that subsidiary. All indebtedness for
borrowed money of others guaranteed as to payment of principal by us or any
subsidiary or in effect guaranteed by us or that subsidiary through a
contingent agreement to purchase such indebtedness for borrowed money shall be
deemed to be indebtedness of ours or that subsidiary, but no other contingent
obligation of ours or any subsidiary in respect of indebtedness for borrowed
money or other obligations incurred by others shall be deemed to be
indebtedness of ours or that subsidiary.
The term "restricted subsidiary" means any subsidiary that is a consolidated
operating subsidiary that accounts for 10% or more of our consolidated revenues
or assets as of the date of our most recent audited financial statements and
any other subsidiary that our board of directors designates as a restricted
subsidiary.
The term "subsidiary" means a person more than 50% of the outstanding voting
securities of which are owned, directly or indirectly, by us or by one or more
of our subsidiaries, or by us and one or more other subsidiaries.
The term "voting security" means a security which ordinarily has voting
power for the election of the board of directors (or other governing body),
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
Defeasance or Covenant Defeasance
In some circumstances, we may elect to discharge our obligations on the
notes through defeasance and discharge or defeasance of certain covenants. See
"Description of Our Debt Securities--Defeasance or Covenant Defeasance" in the
accompanying prospectus for more information about how we may do this.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, we have
agreed to sell to BNY Capital Markets, Inc., as underwriter, and BNY Capital
Markets, Inc. has agreed to purchase from us, $100 million principal amount of
the notes. In the underwriting agreement, the underwriter has agreed to the
terms and conditions to purchase all of the notes offered if any of the notes
are purchased.
We expect the expenses associated with the offer and sale of the notes to be
approximately $250,000.
The underwriter proposes to offer the notes to the public at the initial
public offering price set forth on the cover page of this prospectus
supplement. After the initial public offering, the public offering price may be
changed.
Prior to this offering, there has been no public market for the notes. The
notes will not be listed on any securities exchange or quoted in any automated
dealer quotation system. The underwriter has advised us that it intends to make
a market in the notes. The underwriter will have no obligation to make a market
in the notes, however, and may cease market-making activities, if commenced, at
any time. There can be no assurance of a secondary market for the notes or that
the notes may be resold.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933.
In connection with the offering, the underwriter may purchase and sell the
notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created in
connection with the offering. Stabilizing transactions consist of bids or
purchases for the purposes of preventing or retarding a decline in the market
price of the notes. Short positions involve the sale by the underwriter of a
greater number of notes than it is required to purchase from us in the
offering. The underwriter also may impose a penalty bid, in which selling
concessions allowed to broker dealers in respect of the notes sold in the
offering for their account may be reclaimed if such notes are repurchased in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the notes, which may be higher than the
price that might otherwise prevail in the open market, and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
in the over-the-counter market or otherwise.
The underwriter or its affiliates in the past have provided investment
banking and/or commercial banking services and other financial services for us
and our affiliates and have received compensation and expense reimbursement for
these services. The underwriter or its affiliates may in the future provide
investment banking and/or commercial banking services and other financial
services to us or our affiliates for which they will receive compensation and
expense reimbursement.
LEGAL MATTERS
Certain legal matters in connection with the notes offered by this
prospectus supplement will be passed upon for us by Baker Botts L.L.P.,
Houston, Texas. Phelps Dunbar, L.L.P., New Orleans, Louisiana, will pass upon
all matters of Louisiana law in this connection. Cahill Gordon & Reindel, New
York, New York, will pass upon certain legal matters for the underwriter.
S-12
<PAGE>
Prospectus
[Cleco Corporation Logo]
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
(318) 484-7400
$200,000,000
Debt Securities
---------------------------------------------------------------
We may offer and sell up to $200,000,000 of our debt
securities in one or more series by using this prospectus. Our
debt securities will be unsecured and will be either senior or
subordinated obligations. Our debt securities will be
effectively subordinated to creditors of our subsidiaries with
respect to the assets and earnings of our subsidiaries. We
will establish the terms for our debt securities at the time
we sell them and we will describe them in one or more
supplements to this prospectus. You should read this
prospectus and the related supplement carefully before you
invest in our debt securities. This prospectus may not be used
to offer and sell our debt securities unless accompanied by a
prospectus supplement.
---------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is May 12, 2000.
<PAGE>
Table of Contents
<TABLE>
<S> <C>
About This Prospectus....................................................... 2
Where You Can Find More Information......................................... 3
Cautionary Statement Regarding Forward-Looking Information.................. 4
Cleco Corporation........................................................... 4
Ratio of Earnings to Fixed Charges.......................................... 5
Use of Proceeds............................................................. 5
Description of Our Debt Securities.......................................... 5
Plan of Distribution........................................................ 18
Validity of Securities...................................................... 20
Experts..................................................................... 20
</TABLE>
About This Prospectus
This prospectus is part of a registration statement we have filed with the
SEC using a "shelf" registration process. By using this process, we may offer
up to $200,000,000 of our debt securities in one or more offerings. This
prospectus provides you with a description of the debt securities we may offer.
Each time we offer debt securities, we will provide a supplement to this
prospectus. The prospectus supplement will describe the specific terms of the
offering. The prospectus supplement may also add, update or change the
information contained in this prospectus. Please carefully read this
prospectus, the applicable prospectus supplement and the information contained
in the documents we refer to in the "Where You Can Find More Information"
section of this prospectus.
References in this prospectus to the terms "we," "us" or other similar terms
mean Cleco Corporation and its predecessors, unless the context clearly
indicates otherwise.
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We
have not authorized anyone else to provide you with any different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell debt securities in any
jurisdiction where the offer or sale is not permitted. The information
contained in this prospectus is current only as of the date of this prospectus.
2
<PAGE>
Where You Can Find More Information
We file reports and other information with the SEC. You may read and copy
any document we file with the SEC at the SEC's Public Reference Room located at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048.
You may obtain further information regarding the operation of the SEC's Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are also
available to the public on the SEC's Internet site located at
http://www.sec.gov. and on our Internet site located at http://www.cleco.com.
In addition, you may inspect our reports at the offices of the New York Stock
Exchange, Inc. at 20 Broad Street, New York, New York 10005 and at the offices
of the Pacific Stock Exchange at 301 Pine Street, San Francisco, California
94104.
The SEC allows us to "incorporate by reference" into this prospectus
information we file with the SEC. This means we can disclose important
information to you by referring you to the documents containing the
information. The information we incorporate by reference is considered to be
part of this prospectus, unless we update or supersede that information by the
information contained in this prospectus, a prospectus supplement or
information that we file subsequently that is incorporated by reference into
this prospectus. We are incorporating by reference into this prospectus the
following documents that we have filed with the SEC, and our future filings
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until the offering of the debt securities is completed:
. our Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
This prospectus is part of a registration statement we have filed with the
SEC relating to our debt securities. As permitted by SEC rules, this prospectus
does not contain all of the information included in the registration statement
and the accompanying exhibits and schedules we file with the SEC. You should
read the registration statement and the exhibits and schedules for more
information about us and our debt securities. The registration statement,
exhibits and schedules are also available at the SEC's Public Reference Room or
through its Internet site.
You may also obtain a copy of our filings with the SEC at no cost, by
writing to or telephoning us at the following address:
Cleco Corporation
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
Attn: Corporate Secretary
(318) 484-7400
3
<PAGE>
Cautionary Statement Regarding Forward-Looking Information
This prospectus, including the information we incorporate by reference,
contains statements that are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. You can identify our
forward-looking statements by the words "anticipate," "estimate," "expect,"
"objective," "projection, "forecast," "goal" or other similar words.
We have based our forward-looking statements on our management's beliefs and
assumptions based on information available to our management at the time the
statements are made. We caution you that assumptions, beliefs, expectations,
intentions and projections about future events may and often do vary materially
from actual results. Therefore, we cannot assure you that actual results will
not differ materially from those expressed or implied by our forward-looking
statements.
The following list identifies some of the factors that could cause actual
results to differ from those expressed or implied by our forward-looking
statements:
. state and federal legislative and regulatory initiatives that affect cost
and investment recovery, have an impact on rate structures and affect the
speed and degree to which competition enters the electric and natural gas
industry,
. industrial, commercial and residential growth in Cleco Utility Group
Inc.'s service territory,
. the weather and other natural phenomena,
. the timing and extent of changes in commodity prices and interest rates,
. changes in environmental and other laws and regulations to which we and
our subsidiaries are subject or other external factors over which we have
no control,
. the results of financing efforts,
. the operating performance of the facilities of Cleco Utility Group Inc.
and Cleco Evangeline LLC, and
. other factors we discuss in this prospectus and our other filings with
the SEC.
Cleco Corporation
We are a diversified energy services company. Cleco Utility Group Inc., our
electric utility subsidiary, contains our Louisiana Public Service Commission
jurisdictional generation, transmission and distribution electric utility
operations and provides electric utility services to approximately 246,000
customers in the State of Louisiana.
Our other principal subsidiaries include:
. Cleco Midstream Resources LLC, which operates competitive Louisiana
Public Service Commission nonjurisdictional electric generation, oil and
natural gas production, energy marketing and natural gas pipeline
businesses.
. Utility Construction and Technology Solutions LLC, which provides utility
engineering and line construction services to municipal governments,
rural electric cooperatives and investor-owned electric companies.
Subject to certain limited exceptions, we are exempt from regulation as a
public utility holding company pursuant to Section 3(a)(1) of the Public
Utility Holding Company Act of 1935.
4
<PAGE>
Ratio of Earnings to Fixed Charges
The following table sets forth our ratios of earnings from continuing
operations to fixed charges for each of the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1999 1998 1997 1996 1995
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings from continuing operations to
fixed charges.................................. 3.77x 3.80x 3.74x 3.70x 3.49x
</TABLE>
Use of Proceeds
Unless we inform you otherwise in the prospectus supplement, we anticipate
using net proceeds from the sale of the debt securities offered by this
prospectus for general corporate purposes. These purposes may include, but are
not limited to:
. working capital,
. capital expenditures,
. equity investments in existing and future projects,
. acquisitions, and
. the repayment or refinancing of our indebtedness, including inter-company
indebtedness.
Description of Our Debt Securities
The debt securities offered by this prospectus will be either senior debt
securities or subordinated debt securities. We will issue senior debt
securities under an indenture we will enter into with Bank One, N.A., as
trustee. We will issue subordinated debt securities under an indenture we will
enter into with Bank One, N.A., as trustee. We refer to the senior indenture
and the subordinated indenture in this prospectus collectively as the
"indentures." We have filed the forms of the indentures with the SEC as
exhibits to the registration statement covering the debt securities offered by
this prospectus. We have summarized selected provisions of the indentures and
the debt securities below. This summary is not complete and is qualified in its
entirety by reference to the indentures.
We may issue debt securities from time to time in one or more series under
the indentures. We will describe the particular terms of each series of debt
securities we offer in a supplement to this prospectus. You should carefully
read the summary below, the applicable prospectus supplement and the provisions
of the relevant indenture that may be important to you before investing in our
debt securities.
The provisions of each of the indentures are substantially identical in
substance, except that the subordinated indenture provides for the
subordination of the subordinated debt securities. We describe the
subordination provisions of the subordinated indenture in the "Subordination
Under the Subordinated Indenture" section of this prospectus. We have included
cross-references in the summary below to refer you to the section numbers of
the indentures we are describing. The section numbers are the same for both of
the indentures, unless we state otherwise.
5
<PAGE>
The Terms of the Debt Securities
We may issue debt securities in separate series from time to time under each
of the indentures. The total principal amount of debt securities that may be
issued under the indentures is unlimited. We may limit the maximum total
principal amount for the debt securities of any series. However, any limit may
be increased by resolution of our board of directors. (Section 301) We will
establish the terms of each series of debt securities, which may not be
inconsistent with the related indenture, in a supplemental indenture. The
senior debt securities will rank equally with all of our other unsecured and
unsubordinated indebtedness. The subordinated debt securities will rank junior
and be subordinate to all of our senior indebtedness as we describe in the
"Subordination Under the Subordinated Indenture" section of this prospectus.
Both the senior debt securities and the subordinated debt securities will be
effectively subordinated to creditors of our subsidiaries.
We will describe the specific terms of the series of debt securities being
offered in a supplement to this prospectus. These terms will include some or
all of the following:
. the title of the debt securities;
. whether the debt securities are senior debt securities or subordinated
debt securities;
. the specific indenture under which the debt securities will be issued;
. any limit on the total principal amount of the debt securities;
. the date or dates on which the principal of the debt securities will be
payable or the method used to determine or extend those dates;
. the interest rate or rates of the debt securities, if any, or the method
used to determine the rate or rates;
. the date or dates from which interest will accrue on the debt securities,
or the method used for determining those dates;
. the interest payment dates and the regular record dates for interest
payments, if any, or the method used to determine those dates;
. the basis for calculating interest if other than a 360-day year of twelve
30-day months;
. the place or places where:
. payments of principal, premium, if any, and interest on the debt
securities will be payable;
. the debt securities may be presented for registration of transfer or
exchange; and
. notices and demands to or upon us relating to the debt securities may
be made;
. any provisions for redemption of the debt securities;
. any provisions that would allow or obligate us to redeem or purchase the
debt securities prior to their maturity;
. the denominations in which we will issue the debt securities, if other
than denominations of an integral multiple of $1,000;
. any provisions that would determine the amount of principal, premium, if
any, or interest on the debt securities by reference to an index or
pursuant to a formula;
. the currency, currencies or currency units in which the principal,
premium, if any, and interest on the debt securities will be payable, if
other than $US, and the manner for determining the equivalent principal
amount in $US;
6
<PAGE>
. any provisions for the payment of principal, premium, if any, and
interest on the debt securities in one or more currencies or currency
units other than those in which the debt securities are stated to be
payable;
. the percentage of the principal amount at which the debt securities will
be issued and, if other than 100%, the portion of the principal amount of
the debt securities which will be payable if the maturity of the debt
securities is accelerated, or the method for determining such portion;
. if the principal amount to be paid at the stated maturity of the debt
securities is not determinable as of one or more dates prior to the
stated maturity, the amount which will be deemed to be the principal
amount as of any such date for any purpose, including the principal
amount which will be due and payable upon any maturity other than the
stated maturity or which will be deemed to be outstanding as of any such
date, or, in any such case, the manner in which the deemed principal
amount is to be determined;
. any variation of the defeasance and covenant defeasance sections of the
relevant indenture and the manner in which our election to defease the
debt securities will be evidenced, if other than by a board resolution;
. whether any of the debt securities will initially be issued in the form
of a temporary global security and the provisions for exchanging a
temporary global security for definitive debt securities;
. whether any of the debt securities will be issued in the form of one or
more global securities and, if so:
. the depositories for the global securities;
. the form of any additional legends to be borne by the global
securities;
. the circumstances under which the global securities may be exchanged,
in whole or in part, for debt securities registered in the name of
persons other than the depositary for the global securities or its
nominee; and
. whether and under what circumstances a transfer of the global
securities may be registered in the names of persons other than the
depositary for the global securities or its nominee;
. whether the interest rate of the debt securities may be reset;
. whether the stated maturity of the debt securities may be extended;
. any addition to or change in the events of default for the debt
securities and any change in the right of the trustee or the holders of
the debt securities to declare the principal amount of the debt
securities due and payable;
. any addition to or change in the covenants in the relevant indenture;
. any additions or changes to the relevant indenture necessary to issue the
debt securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons;
. the appointment of any paying agents for the debt securities, if other
than the trustee;
. the terms of any right to convert or exchange the debt securities into
any other securities or property;
. the terms and conditions, if any, securing the debt securities;
. any restriction or condition on the transferability of the debt
securities; and
. any other terms of the debt securities consistent with the relevant
indenture. (Section 301)
We may sell the debt securities, including original issue discount
securities, at a substantial discount below their stated principal amount. If
there are any special United States federal income tax considerations
applicable to debt securities we sell at an original discount, we will describe
them in the prospectus supplement. In addition, we will describe in the
prospectus supplement any special United States federal income tax
considerations and any other special considerations for any debt securities we
sell which are denominated in a currency or currency unit other than $US.
7
<PAGE>
Form, Exchange and Transfer of the Debt Securities
We will issue the debt securities in registered form, without coupons.
Unless we inform you otherwise in the prospectus supplement, we will only issue
debt securities in denominations of integral multiples of $1,000. (Section 302)
Holders will generally be able to exchange debt securities for other debt
securities of the same series with the same total principal amount and the same
terms but in different authorized denominations. (Section 305)
Holders may present debt securities for exchange or for registration of
transfer at the office of the security registrar or at the office of any
transfer agent we designate for that purpose. The security registrar or
designated transfer agent will exchange or transfer the debt securities if it
is satisfied with the documents of title and identity of the person making the
request. We will not charge a service charge for any exchange or registration
of transfer of debt securities. However, we may require payment of a sum
sufficient to cover any tax or other governmental charge payable for the
registration of transfer or exchange. Unless we inform you otherwise in the
prospectus supplement, we will appoint the trustee as security registrar. We
will identify any transfer agent in addition to the security registrar in the
prospectus supplement. (Section 305) At any time we may:
. designate additional transfer agents;
. rescind the designation of any transfer agent; or
. approve a change in the office of any transfer agent.
However, we are required to maintain a transfer agent in each place of payment
for the debt securities at all times. (Sections 305 and 1002)
In the event we elect to redeem a series of debt securities, neither we nor
the applicable trustee will be required to register the transfer or exchange of
any debt security of that series:
. during the period beginning at the opening of business 15 days before the
day we mail the notice of redemption for the series and ending at the
close of business on the day the notice is mailed, or
. if we have selected the series for redemption, in whole or in part,
except for the unredeemed portion of the series. (Section 305)
Global Securities
Unless we inform you otherwise in the prospectus supplement, some or all of
the debt securities of any series may be represented, in whole or in part, by
one or more global securities. The global securities will have a total
principal amount equal to the debt securities they represent. Unless we inform
you otherwise in the prospectus supplement, each global security representing
debt securities will be deposited with, or on behalf of, The Depository Trust
Company, referred to as "DTC," or any other successor depository we may
appoint. We refer to DTC or the other depository in this prospectus as the
"depositary." Each global security will be registered in the name of the
depositary or its nominee. Each global security will bear a legend referring to
the restrictions on exchange and registration of transfer of global securities
that we describe below and any other matters required by the relevant
indenture. Unless we inform you otherwise in the prospectus supplement, we will
not issue debt securities in definitive form.
Global securities may not be exchanged, in whole or in part, for debt
securities registered, and no transfer of a global security, in whole or in
part, may be registered in the name of any person other than the depositary for
the global security or any nominee of the depositary unless:
. the depositary has notified us that it is unwilling or unable to continue
as depositary for the global security or has ceased to be qualified to
act as depositary as required by the indentures;
. an event of default with respect to the global security has occurred and
is continuing;
8
<PAGE>
. we determine in our sole discretion that the global security will be so
exchangeable or transferable; or
. any other circumstances in addition to or in lieu of those described
above that we may describe in the prospectus supplement.
All debt securities issued in exchange for a global security or any portion
of a global security will be registered in the names directed by the
depositary. (Sections 204 and 305)
Regarding DTC
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 under 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, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include:
. securities brokers and dealers;
. banks;
. trust companies;
. clearing corporations and some other organizations.
DTC is owned by a number of direct participants and by The New York Stock
Exchange, Inc., the American Stock Exchange LLC, and the National Association
of Securities Dealers, Inc. Access to DTC's book-entry 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 direct
participant, either directly or indirectly, referred to as indirect
participants. The rules applicable to DTC and its participants are on file with
the SEC.
Upon our issuance of debt securities represented by a global security,
purchases of debt securities under 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, referred to as a beneficial owner, is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from DTC of their purchase. However, beneficial owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct or indirect
participant through which the beneficial owner entered into the transaction.
Transfers of ownership interests in the debt securities are to be 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 debt securities, except in the event that use of the
book-entry system for the debt securities is discontinued. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary for the global security, or its nominee, is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the
9
<PAGE>
debt securities represented by the global security for all purposes under the
indentures. Except as described above, beneficial owners will not:
. be entitled to have debt securities represented by the global security
registered in their names;
. receive or be entitled to receive physical delivery of debt securities in
definitive form; and
. be considered the owners or holders thereof under the indentures.
To facilitate subsequent transfers, all debt securities deposited by
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of debt securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. 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 the debt
securities are credited, which may or may not be the beneficial owners. The
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 will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to debt
securities. Under its usual procedures, DTC mails an omnibus proxy to us as
soon as possible after the record date. The 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, identified in a listing
attached to the omnibus proxy.
We will make payments of principal, premium, if any, and interest on the
debt securities represented by the global security registered in the name of
the depositary or its nominee through the trustee under the relevant indenture
or a paying agent, which may also be the trustee under the relevant indenture,
to the depositary or its nominee, as the case may be, as the registered owner
of the global security. Neither we, the trustees, nor the paying agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the global
security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
We have been advised that DTC will credit direct participants' accounts on
the payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
the payable date. Payments by participants to beneficial owners will be
governed by standing instructions and customary practices, as in 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 participant and not of
DTC, the paying agent, or us, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
premium, if any, and interest to DTC is either our responsibility or the
responsibility of the paying agent. Disbursement of these payments to direct
participants is the responsibility of DTC. Disbursement of these payments to
the beneficial owners is the responsibility of direct and indirect
participants.
We cannot assure you that DTC will distribute payments on the debt
securities made to DTC or its nominee as the registered owner or any redemption
or other notices to the participants, or that the participants or others will
distribute the payments or notices to the beneficial 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. Beneficial owners should make appropriate arrangements with
their broker or dealer regarding distribution of information regarding the debt
securities that may be transmitted by or through DTC.
According to DTC, the foregoing information with respect to DTC has been
provided to the industry for informational purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
10
<PAGE>
We have obtained the information in this section concerning DTC and the
DTC's book-entry system from sources that we believe are reliable. However, we
take no responsibility for the accuracy of this information.
Payment and Paying Agents
Unless we inform you otherwise in the prospectus supplement, we will pay
interest on the debt securities to the persons in whose names the debt
securities are registered at the close of business on the regular record date
for each interest payment. However, unless we inform you otherwise in the
prospectus supplement, we will pay the interest payable on the debt securities
at their stated maturity to the persons we pay the principal amount of the
debt securities. The initial payment of interest on any series of debt
securities issued between a regular record date and the related interest
payment date will be payable in the manner provided by the terms of the
series, which we will describe in the prospectus supplement. (Section 307)
Unless we inform you otherwise in the prospectus supplement, we will pay
principal, premium, if any, and interest on the debt securities at the offices
of the paying agents we designate. However, except in the case of a global
security, we may pay interest by:
. check mailed to the address of the person entitled to the payment as it
appears in the security register, or
. by wire transfer in immediately available funds to the place and account
designated in writing by the person entitled to the payment as specified
in the security register.
We will designate the applicable trustee as the sole paying agent for the debt
securities issued under the relevant indenture unless we inform you otherwise
in the prospectus supplement. If we initially designate any other paying
agents for a series of debt securities, we will identify them in the
prospectus supplement. At any time, we may designate additional paying agents
or rescind the designation of any paying agents. However, we are required to
maintain a paying agent in each place of payment for the debt securities at
all times. (Sections 307 and 1002)
Any money deposited with the applicable trustee or any paying agent for the
payment of principal, premium, if any, and interest on the debt securities
that remains unclaimed for two years after the date the payments became due,
may be repaid to us upon our request. After we have been repaid, holders
entitled to those payments may only look to us for payment as our unsecured
general creditors. The trustees and any paying agents will not be liable for
those payments after we have been repaid. (Section 1003)
Covenants
We will describe any restrictive covenants for any series of debt
securities in the prospectus supplement.
Consolidation, Merger and Sale of Assets
Unless we inform you otherwise in the prospectus supplement, we may not
consolidate with or merge into, or convey, transfer or lease our properties
and assets substantially as an entirety, to any person, referred to as a
"successor person," unless:
. the successor person, if any, is a corporation, partnership, trust or
other entity organized and validly existing under the laws of the United
States or a State in the United States;
. the successor person assumes our obligations with respect to the debt
securities and the relevant indenture;
. immediately after giving effect to the transaction, no event of default,
and no event which, after notice or lapse of time or both, would become
an event of default, would occur and be continuing; and
. we have delivered to the trustee the certificates and opinions required
under the relevant indenture. (Section 801)
11
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Absence of Event Risk Protections
Unless we inform you otherwise in the prospectus supplement, the indenture
for a series of debt securities will not contain provisions permitting the
holders of our debt securities to require prepayment in the event of a change
in control of us, or in the event we enter into one or more highly leveraged
transactions, regardless of whether a rating decline results therefrom, or in
the event we dispose of one or more of our business units, nor are any such
events deemed to be Events of Default under the terms of the indentures.
Events of Default
Unless the context clearly indicates otherwise, we use the terms "indenture"
and "trustee" in this subsection to mean the relevant indenture and the
applicable trustee with respect to any series of debt securities we may offer.
Unless we inform you otherwise in the prospectus supplement, each of the
following will be an event of default under the indenture for a series of debt
securities:
. our failure to pay principal or premium, if any, on that series when due;
. our failure to pay any interest on that series for 30 days;
. our failure to deposit any sinking fund payment, when due, relating to
that series;
. our failure to perform, or our breach in any material respect of, any
other covenant or warranty in the indenture, other than a covenant or
warranty included in the indenture solely for the benefit of another
series of debt securities, for 90 days after either the trustee or
holders of at least 33% in principal amount of the outstanding debt
securities of that series have given us written notice of the breach in
the manner required by the indenture;
. specified events involving bankruptcy, insolvency or reorganization; and
. any other event of default we may provide for that series;
provided, however, that no event described in the fourth and sixth bullet
points above will be an event of default until an officer of the trustee,
assigned to and working in the trustee's corporate trust department, has actual
knowledge of the event or until the trustee receives written notice of the
event at its corporate trust office, and the notice refers to the debt
securities generally, us or the indenture. (Section 501)
If the principal, premium, if any, or interest on any series of debt
securities is payable in a currency other than the $US and the currency is not
available to us for making payments due to the imposition of exchange controls
or other circumstances beyond our control, we may satisfy our obligations to
holders of the debt securities by making payment in $US in an amount equal to
the $US equivalent of the amount payable in the other currency. This amount
will be determined by the trustee by reference to the noon buying rate in The
City of New York for cable transfers for the other currency, referred to as the
"exchange rate," as reported or otherwise made available by the Federal Reserve
Bank of New York on the date of the payment, or, if the exchange rate is not
then available, on the basis of the most recently available exchange rate. Any
payment made in $US under these circumstances will not be an event of default
under the indenture. (Section 501)
If an event of default for a series of debt securities occurs and is
continuing, either the trustee or the holders of at least 33% in principal
amount of the outstanding debt securities of that series may declare the
principal amount of the debt securities of that series due and immediately
payable. In order to declare the principal amount of the series of debt
securities due and immediately payable, the trustee or the holders must deliver
a notice that satisfies the requirements of the indenture. Upon a declaration
by the trustee or the holders, we will be obligated to pay the principal amount
of the series of debt securities.
This right does not apply if:
. an event of default described in the fifth bullet point above occurs, or
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. an event of default described in the fourth and sixth bullet points above
that applies to all outstanding debt securities occurs.
If any of these events of default occur and is continuing, either the
trustee or holders of at least 33% in principal amount of all of the debt
securities then outstanding, treated as one class, may declare the principal
amount of all of the debt securities then outstanding to be due and payable
immediately. In order to declare the principal amount of the debt securities
due and immediately payable, the trustee or the holders must deliver a notice
that satisfies the requirements of the indenture. Upon a declaration by the
trustee or the holders, we will be obligated to pay the principal amount of the
debt securities.
After any declaration of acceleration of a series of debt securities, but
before a judgment or decree for payment, the holders of a majority in principal
amount of the outstanding debt securities of that series may, under certain
circumstances, rescind and annul the declaration of acceleration if all events
of default, other than the non-payment of principal have been cured or waived
as provided in the indenture. (Section 502) For information as to waiver of
defaults, please refer to the "Modification and Waiver" section below.
If an event of default occurs and is continuing, the trustee will generally
have no obligation to exercise any of its rights or powers under the indenture
at the request or direction of any of the holders, unless the holders offer
reasonable indemnity to the trustee. (Section 603) The holders of a majority in
principal amount of the outstanding debt securities of any series will
generally have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee for the debt securities of that series, provided
that:
. the direction is not in conflict with any law or the indenture;
. the trustee may take any other action it deems proper which is not
inconsistent with the direction; and
. the trustee will generally have the right to decline to follow the
direction if an officer of the trustee determines, in good faith, that
the proceeding would involve the trustee in personal liability or would
otherwise be contrary to applicable law. (Section 512)
A holder of a debt security of any series may only pursue a remedy under the
indenture if:
. the holder gives the trustee written notice of a continuing event of
default for that series;
. holders of at least 33% in principal amount of the outstanding debt
securities of that series make a written request to the trustee to pursue
that remedy;
. the holder offers reasonable indemnity to the trustee;
. the trustee fails to pursue that remedy within 60 days after receipt of
the request; and
. during that 60-day period, the holders of a majority in principal amount
of the debt securities of that series do not give the trustee a direction
inconsistent with the request. (Section 507)
However, these limitations do not apply to a suit by a holder of a debt
security demanding payment of the principal, premium, if any, or interest on a
debt security on or after the date the payment is due. (Section 508)
We will be required to furnish to the trustee annually a statement by some
of our officers regarding our performance or observance of any of the terms of
the indenture and, specifying all of our known defaults, if any. (Section 1004)
Modification and Waiver
Unless the context clearly indicates otherwise, we use the terms "indenture"
and "trustee" in this subsection to mean the relevant indenture and the
applicable trustee with respect to any series of debt securities we may offer.
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We may enter into one or more supplemental indentures with the trustee
without the consent of the holders of the debt securities of a particular
series in order to:
. evidence the succession of a successor person to us, or successive
successions and the assumption of our covenants, agreements and
obligations by a successor person;
. add to our covenants for the benefit of the holders or to surrender any
of our rights or powers;
. add events of default for any series of debt securities;
. add or change any provisions of the indenture to the extent necessary to
issue debt securities in bearer form;
. add to, change or eliminate any provision of the indenture applying to
one or more series of debt securities, provided that if such action
adversely affects the interests of any holders of debt securities of any
series, the addition, change or elimination will become effective with
respect to that series only when no security of that series remains
outstanding;
. convey, transfer, assign, mortgage or pledge any property to or with the
trustee or to surrender any right or power conferred upon us by the
indenture;
. establish the form or terms of any series of debt securities;
. provide for uncertificated securities in addition to certificated
securities;
. evidence and provide for successor trustees or to add or change any
provisions to the extent necessary to appoint a separate trustee or
trustees for a specific series of debt securities;
. correct any ambiguity, defect or inconsistency under the indenture,
provided that such action does not adversely affect the interests of the
holders of debt securities of any series;
. supplement any provisions of the indenture necessary to defease and
discharge any series of debt securities, provided that such action does
not adversely affect the interests of the holders of any series of debt
securities;
. comply with the rules or regulations of any securities exchange or
automated quotation system on which any debt securities are listed or
traded; or
. add, change or eliminate any provisions of the indenture in accordance
with any amendments to the Trust Indenture Act, provided that the action
does not adversely affect the rights or interests of any holder of debt
securities. (Section 901)
We may enter into one or more supplemental indentures with the trustee in
order to add to, change or eliminate provisions of the indenture or to modify
the rights of the holders of one or more series of debt securities if we obtain
the consent of the holders of a majority in principal amount of the outstanding
debt securities of each series affected by the supplemental indenture, treated
as one class. However, without the consent of the holders of each outstanding
debt security affected by the supplemental indenture, we may not enter into a
supplemental indenture that:
. changes the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security, except to the extent
permitted by the indenture;
. reduces the principal amount of, or any premium or interest on, any debt
security;
. reduces the amount of principal of an original issue discount security or
any other debt security payable upon acceleration of the maturity
thereof;
. changes the place or currency of payment of principal, premium, if any,
or interest;
. impairs the right to institute suit for the enforcement of any payment on
any debt security;
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. reduces the percentage in principal amount of outstanding debt securities
of any series, the consent of whose holders is required for modification
or amendment of the indenture;
. reduces the percentage in principal amount of outstanding debt securities
of any series necessary for waiver of compliance with certain provisions
of the indenture or for waiver of certain defaults;
. makes certain modifications to such provisions with respect to
modification and waiver;
. makes any change that adversely affects the right to convert or exchange
any debt security or decrease the conversion or exchange rate or
increases the conversion price of any convertible or exchangeable debt
security; or
. changes the terms and conditions pursuant to which any series of debt
securities that are secured in a manner adverse to the holders of the
debt securities. (Section 902)
Holders of a majority in principal amount of the outstanding debt securities
of any series may waive past defaults or compliance with restrictive provisions
of the indenture. However, the consent of holders of each outstanding debt
security of a series is required to:
. waive any default in the payment of principal, premium, if any, or
interest, or
. waive any covenants and provisions of the indenture that may not be
amended without the consent of the holder of each outstanding security of
the series affected. (Sections 513 and 1006)
In order to determine whether the holders of the requisite principal amount
of the outstanding debt securities have taken an action under the indenture as
of a specified date:
. the principal amount of an original issue discount security that will be
deemed to be outstanding will be the amount of the principal that would
be due and payable as of such date upon acceleration of the maturity to
such date;
. if, as of such date, the principal amount payable at the stated maturity
of a debt security is not determinable, for example, because it is based
on an index, the principal amount of such debt security deemed to be
outstanding as of such date will be an amount determined in the manner
prescribed for such debt security;
. the principal amount of a debt security denominated in one or more
foreign currencies or currency units that will be deemed to be
outstanding will be the $US equivalent, determined as of such date in the
manner prescribed for such debt security, of the principal amount of such
debt security or, in the case of a debt security described in the two
preceding bullet points, of the amount described above; and
. debt securities owned by us or any other obligor upon the debt securities
or any of their affiliates will be disregarded and deemed not to be
outstanding.
Some debt securities, including those for whose payment or redemption money has
been deposited or set aside in trust for the holders and those that have been
fully defeased pursuant to Section 1402, will not be deemed to be outstanding.
(Section 101)
We will generally be entitled to set any day as a record date for
determining the holders of outstanding debt securities of any series entitled
to give or take any direction, notice, consent, waiver or other action under
the indenture. In limited circumstances, the trustee will be entitled to set a
record date for action by holders of outstanding debt securities. If a record
date is set for any action to be taken by holders of a particular series, the
action may be taken only by persons who are holders of outstanding debt
securities of that series on the record date. To be effective, the action must
be taken by holders of the requisite principal amount of the debt securities
within a specified period following the record date. For any particular record
date, this period will be 180 days or such shorter period as we may specify, or
the trustee may specify, if it set the record date. This period may be
shortened or lengthened by not more than 180 days. (Section 104)
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Subordination Under the Subordinated Indenture
We have defined some of the terms we use in this subsection at the end of
this subsection.
The subordinated debt securities issued under the subordinated indenture
will be unsecured and junior in right of payment to all of our senior
indebtedness. This means we will not be permitted to make a payment on the
subordinated debt securities if:
. any of our senior indebtedness is not paid when due, any applicable grace
period with respect to any payment default has ended and the payment
default has not been cured or waived or ceased to exist; or
. the maturity of any of our senior indebtedness has been accelerated
because of a default and that acceleration has not been rescinded.
If our assets are distributed to our creditors upon our dissolution,
winding-up or liquidation, whether voluntarily or involuntarily or in
bankruptcy, insolvency, receivership, reorganization or other similar
proceedings, all principal, premium, if any, interest and any other amounts due
or to become due on all of our senior indebtedness must be paid in full before
the holders of the subordinated debt securities are entitled to receive or
retain any payment.
"Debt" in the subordinated indenture means, with respect to any person at
any date of determination, without duplication:
. all indebtedness for borrowed money;
. all obligations evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses;
. all obligations under letters of credit or bankers' acceptances or other
similar instruments, or related reimbursement obligations, issued on the
account of such person;
. all obligations to pay the deferred purchase price of property or
services, except trade payables;
. all obligations as lessee under capitalized leases;
. all debt of others secured by a lien on any asset of such person, whether
or not the debt is assumed by the person, provided that, for purposes of
determining the amount of any debt of the type described in this clause,
if recourse with respect to the debt is limited to the asset, the amount
of the debt is limited to the lesser of the fair market value of the
asset or the amount of the debt;
. all debt of others guaranteed by such person to the extent such debt is
guaranteed by such person; and
. to the extent not otherwise included in this definition, all obligations
for claims in respect of derivative products, including interest rate,
foreign exchange rate and commodity prices, forward contracts, options,
swaps, collars and similar arrangements.
"Senior indebtedness" in the subordinated indenture means the principal,
premium, if any, and interest on and all other amounts due in connection with
all of our debt, whether created, incurred or assumed before, on or after the
date of the subordinated indenture. However, senior indebtedness does not
include:
. debt to any of our subsidiaries;
. any series of subordinated debt securities under the subordinated
indenture;
. accounts payable or any other indebtedness or monetary obligation to
trade creditors arising in the ordinary course of business in connection
with the acquisition of goods or services;
. debt that, when incurred and without respect to any election under
Section 1111(b) of Title 11, U.S. Code, was without recourse; and
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. other debt which by the terms of the instrument creating or evidencing it
is specifically designated as being subordinated to or pari passu with
the subordinated debt securities.
The subordinated indenture does not limit our ability to incur additional
indebtedness, including indebtedness that ranks senior in priority of payment
to the subordinated debt securities.
Defeasance and Covenant Defeasance
Unless the context clearly indicates otherwise, we use the terms "indenture"
and "trustee" in this subsection to mean the relevant indenture and the
applicable trustee with respect to any series of debt securities we may offer.
Unless we inform you otherwise in the prospectus supplement, the provisions
of the indenture relating to defeasance and discharge of indebtedness, or
defeasance of restrictive covenants, will apply to the debt securities of any
series. (Section 1401)
Defeasance and Discharge. We will be discharged from all of our obligations
with respect to the debt securities, except for certain obligations to exchange
or register the transfer of debt securities, to replace stolen, lost or
mutilated debt securities, to maintain paying agencies and to hold moneys for
payment in trust, upon the deposit in trust for the benefit of the holders of
such debt securities of money or U.S. government obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal, premium, if any, and interest on the debt securities on the
respective stated maturities in accordance with the terms of the indenture and
the debt securities. Such defeasance or discharge may occur only if, among
other things, we have delivered to the trustee an opinion of counsel to the
effect that we have received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a change in tax
law, in either case to the effect that holders of the debt securities will not
recognize gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur. (Sections
1402 and 1404)
Defeasance of Certain Covenants. In certain circumstances, we may omit to
comply with specified restrictive covenants, including those described under
"Consolidation, Merger and Sale of Assets" and any that we may describe in the
prospectus supplement, and in those circumstances the occurrence of certain
events of default, which are described in the fourth bullet point above, with
respect to such restrictive covenants, under "Events of Default" and any that
may be described in the prospectus supplement, will be deemed not to be or
result in an event of default, in each case with respect to the debt
securities. We, in order to exercise such option, will be required to deposit,
in trust for the benefit of the holders of the debt securities, money or U.S.
government obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal, premium, if any, and interest on
the debt securities on the respective stated maturities in accordance with the
terms of the indenture and the debt securities. We will also be required, among
other things, to deliver to the trustee an opinion of counsel to the effect
that holders of the debt securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amount, in
the same manner and at the same times as would have been the case if such
deposit and defeasance were not to occur. In the event we exercise this option
with respect to any debt securities and the debt securities were declared due
and payable because of the occurrence of any event of default, the amount of
money and U.S. government obligations so deposited in trust would be sufficient
to pay amounts due on the debt securities at the time of their respective
stated maturities, but might not be sufficient to pay amounts due on such debt
securities upon any acceleration resulting from the event of default. In such
case, we would remain liable for those payments. (Sections 1403 and 1404)
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Notices
Holders will receive notices by mail at their addresses as they appear in
the security register. (Sections 101 and 106)
Title
We may treat the person in whose name a debt security is registered on the
applicable record date as the owner of the debt security for all purposes,
whether or not it is overdue. (Section 309)
Governing Law
New York law will govern the indentures and the debt securities. (Section
112)
Regarding the Trustee
Bank One, N.A. or an affiliate thereof acts as (a) trustee, collateral agent
and securities intermediary under certain senior secured bonds issued by Cleco
Evangeline and (b) trustee under certain first mortgage bonds issued by Cleco
Utility Group. Bank One or an affiliate thereof also is (a) a lender and
syndication agent under a 364-day credit agreement between Cleco Corporation
and Bank One (or an affiliate thereof) and (b) a lender to Cleco Corporation
and Cleco Utility Group under certain other credit facilities. In addition,
Bank One and its affiliates may from time to time act as a depositary for funds
of, make loans to, and perform other services for Cleco Corporation and its
affiliates in the ordinary course of business.
Plan of Distribution
We may sell debt securities:
. through an underwriter or underwriters,
. through dealers,
. through agents,
. directly to purchasers, including our affiliates, or
. through a combination of any of these methods.
We may authorize underwriters, dealers and agents to solicit offers by
institutions to purchase debt securities from us pursuant to delayed delivery
contracts providing for payment and delivery on a specified date. If we elect
to use delayed delivery contracts, we will describe the date of delivery, the
conditions of the sale and the commissions payable for solicitation of such
contracts in the prospectus supplement.
We will describe the terms of any offering of debt securities in the
prospectus supplement, including:
. the method of distribution,
. the name or names of any underwriters, dealers, purchasers or agents, and
any managing underwriter or underwriters,
. the purchase price of the debt securities and the proceeds we receive
from the sale,
. any underwriting discounts, agency fees or other form of underwriters'
compensation,
. any discounts and concessions allowed, reallowed or paid to dealers or
agents, and
. the expected time of delivery of the offered debt securities.
We may change the initial public offering price and any discount or
concessions allowed or reallowed to dealers from time to time.
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If we use underwriters to sell our debt securities, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters will be obligated to
purchase all of the offered debt securities if any are purchased. In connection
with the sale of debt securities, underwriters may receive compensation from us
or from purchasers of debt securities for whom they may act as agents in the
form of discounts, concessions or commissions. Underwriters may sell debt
securities to or through dealers, and dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
If we use a dealer to sell debt securities, we will sell the debt securities
to the dealer as principal. The dealer may then resell the debt securities to
the public at varying prices to be determined by the dealer at the time of
resale. These dealers may be deemed underwriters, as such term is defined in
the Securities Act of 1933, of the debt securities they offer and sell. If we
elect to use a dealer to sell debt securities, we will provide the name of the
dealer and the terms of the transaction in the prospectus supplement.
Debt securities may also be offered and sold in connection with a
remarketing upon their purchase, in accordance with a redemption or repayment
by their terms or otherwise by one or more remarketing firms acting as
principals for their own accounts or as our agents. We will identify any
remarketing firm, the terms of any remarketing agreement and the compensation
to be paid to a remarketing firm in the prospectus supplement. Remarketing
firms may be deemed underwriters under the Securities Act of 1933.
Underwriters, agents, dealers and some purchasers participating in the
distribution of debt securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of debt securities may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933.
Unless we inform you otherwise in the prospectus supplement, none of our
directors, officers or employees will solicit or receive a commission in
connection with direct sales of debt securities, although these persons may
respond to inquiries by potential purchasers and perform ministerial and
clerical work in connection with any such direct sales.
We may enter into agreements with the underwriters, agents, purchasers,
dealers or remarketing firms who participate in the distribution of our debt
securities that will require us to indemnify them against specified
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments that they or any person controlling them may be required
to make for those liabilities. Underwriters, agents or dealers may be our
customers. They may also engage in transactions with us or perform services for
us or for our affiliates in the ordinary course of business.
Each series of debt securities will be a new issue with no established
trading market. We may elect to list any series of debt securities on an
exchange. However, we are not obligated to do so. It is possible that one or
more underwriters may make a market in a series of debt securities. However,
they will not be obligated to do so and may discontinue market making at any
time without notice. We cannot assure you that a liquid trading market for the
debt securities will develop.
In connection with an offering, the underwriters or agents may purchase and
sell debt securities in the open market. These transactions may include over-
allotment and stabilizing transactions and purchases to cover syndicate short
positions created in connection with the offering. Stabilizing transactions
consist of bids or purchases for the purpose of preventing or retarding a
decline in the market price of the debt securities. Syndicate short positions
involve the sale by the underwriters or agents of a greater number of debt
securities than they are required to purchase from us in the offering. The
underwriters also may impose a penalty bid, in which selling concessions
allowed to syndicate members or other broker dealers in respect of the debt
securities sold in the offering for their account may be reclaimed by the
syndicate if the debt securities are repurchased by the syndicate in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the debt securities, which may be
higher than the price that might otherwise prevail
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in the open market, and these activities, if commenced, may be discontinued at
any time. These transactions may be effected on the NYSE, in the over-the-
counter market or otherwise.
Validity of Securities
The validity of the debt securities will be passed upon for us by Baker
Botts L.L.P., Houston, Texas. Phelps Dunbar, L.L.P., New Orleans, Louisiana,
will pass on all matters of Louisiana law in this connection. Any underwriters
will be advised about the validity of the debt securities and other legal
matters by their own counsel.
Experts
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1999 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said Firm as experts in auditing and accounting.
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