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Filed Pursuant to Rule 424(b)(2)
Registration No. 33-77812
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 21, 1994)
$50,000,000
Northern Illinois Gas Company
FIRST MORTGAGE BONDS, 6 3/4% SERIES DUE JUNE 1, 2002
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Interest Payable June 1 and December 1
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THE NEW BONDS MAY NOT BE REDEEMED BY THE COMPANY PRIOR TO JUNE 1, 2001. ON
AND AFTER JUNE 1, 2001, THE NEW BONDS WILL BE REDEEMABLE, AT THE
COMPANY'S OPTION, ON NOT LESS THAN 30 NOR MORE THAN 45 DAYS NOTICE, AS
A WHOLE AT ANY TIME, OR IN PART FROM TIME TO TIME, AT 100% OF THE
PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST TO
THE REDEMPTION DATE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE.
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PRICE 99.79% AND ACCRUED INTEREST
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<TABLE>
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
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<S> <C> <C> <C>
Per Bond............................... 99.790% .123% 99.667%
Total.................................. $49,895,000 $61,500 $49,833,500
</TABLE>
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(1)Plus accrued interest from June 1, 1997.
(2)The Company has agreed to indemnify the several Underwriters against
certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
(3)Before deducting expenses payable by the Company estimated at $200,000.
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The New Bonds are offered, subject to prior sale, when, as and if issued by
the Company and accepted by the Underwriters and subject to approval of
certain legal matters by Wildman, Harrold, Allen & Dixon, counsel for the
Underwriters. It is expected that delivery of the New Bonds will be made on or
about June 10, 1997, at the offices of Morgan Stanley & Co. Incorporated, New
York, N.Y., against payment therefor in immediately available funds.
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MORGAN STANLEY DEAN WITTER
ABN AMRO CHICAGO CORPORATION
FIRST CHICAGO CAPITAL MARKETS, INC.
SMITH BARNEY INC.
June 3, 1997
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NEW BONDS.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE NEW BONDS IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds will be used for general
corporate purposes, including the replenishment of corporate funds used for
the February 1, 1997 maturity of $25,000,000 principal amount of 5 1/2% First
Mortgage Bonds.
DESCRIPTION OF NEW BONDS
GENERAL. Interest at the annual rate set forth on the cover page of this
Prospectus Supplement will accrue from June 1, 1997, and is to be payable
semiannually on June 1 and December 1, beginning December 1, 1997, to the
person in whose name the New Bond is registered on the May 15 or November 15
(whether or not a business day) next preceding such interest payment date. The
New Bonds will be limited to $50,000,000 aggregate principal amount, will be
issued in fully registered form only, in denominations of $1,000 and integral
multiples thereof, and will mature June 1, 2002.
New Bonds of any denomination will be exchangeable for a like aggregate
principal amount of New Bonds of different authorized denominations upon
surrender of such New Bonds, with the request for such exchange, at Harris
Trust and Savings Bank, Corporate Trust Department, 311 West Monroe Street,
Chicago, Illinois, or at Harris Trust Company of New York, 77 Water St., 4th
Floor, New York, New York. Principal and interest will be payable at the
offices identified in the preceding sentence, except that any installment of
interest on the New Bonds may, at the Company's option, be paid by mailing
checks for such interest payable to or upon the written order of the person
entitled thereto to the address of such person as it appears on the
registration books.
Reference is made to the Prospectus for a description of the general terms
of the New Bonds which the particular description herein supplements.
REDEMPTION. The New Bonds may not be called for redemption by the Company
prior to June 1, 2001. On June 1, 2001 and thereafter until maturity on June
1, 2002, the New Bonds may be redeemed at the Company's option, on not less
than 30 nor more than 45 days notice, as a whole at any time, or in part from
time to time, at 100% of the principal amount thereof, plus accrued and unpaid
interest to the date fixed for redemption.
SINKING FUND. No sinking fund is provided for the New Bonds.
TRUSTEE. On February 26, 1996, Harris Trust and Savings Bank succeeded Bank
of America Illinois as trustee under the Indenture.
S-2
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UNDERWRITING
The underwriters named below (the "Underwriters") have severally agreed to
purchase from the Company, and the Company has agreed to sell to them
severally, the respective principal amounts of New Bonds indicated below. The
Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the New Bonds if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
NAME AMOUNT
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<S> <C>
Morgan Stanley & Co. Incorporated............................ $12,500,000
ABN AMRO Chicago Corporation................................. 12,500,000
First Chicago Capital Markets, Inc........................... 12,500,000
Smith Barney Inc............................................. 12,500,000
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Total.................................................... $50,000,000
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</TABLE>
The Company has been advised by the several Underwriters as follows:
The several Underwriters propose to offer part of the New Bonds directly to
the public at the public offering price set forth on the cover page of this
Prospectus Supplement and part to dealers at a price which represents a
concession of .10% of the principal amount under the public offering price,
and any Underwriter may offer the New Bonds to certain brokers or dealers who
are either a parent or subsidiary of such Underwriter at not less than such
price to dealers. The Underwriters may allow and such dealers may reallow a
concession, not in excess of .05% of the principal amount, to certain other
dealers. After the initial public offering, the public offering price and
concessions may be changed.
In order to facilitate the offering of the New Bonds, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price
of the New Bonds. Specifically, the Underwriters may overallot in connection
with the offering, creating a short position in the New Bonds for their own
account. In addition, to cover overallotments or to stabilize the price of the
New Bonds, the Underwriters may bid for, and purchase, the New Bonds in the
open market. Any of these activities may stabilize or maintain the market
price of the New Bonds above independent market levels. The Underwriters are
not required to engage in these activities and may end any of these activities
at any time.
There is presently no trading market for the New Bonds and there is no
assurance that a market will develop. Although they are under no obligation to
do so, the Underwriters presently intend to act as market makers for the New
Bonds in the secondary trading market but may discontinue market making at any
time without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended.
S-3
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER IN-
FORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH THEY
RELATE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OF-
FER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUM-
STANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
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TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUPPLEMENT
<S> <C>
Use of Proceeds............................................................ S-2
Description of New Bonds................................................... S-2
Underwriting............................................................... S-3
PROSPECTUS
Available Information...................................................... 2
Incorporation by Reference................................................. 2
Experts.................................................................... 2
Summary Information........................................................ 3
The Company/Recent Developments............................................ 4
Use of Proceeds............................................................ 4
Plan of Distribution....................................................... 4
Description of Bonds....................................................... 5
Legal Opinions............................................................. 9
</TABLE>
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LOGO
$50,000,000
FIRST MORTGAGE BONDS
6 3/4% SERIES
DUE JUNE 1, 2002
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PROSPECTUS SUPPLEMENT
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June 3, 1997
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