<PAGE> 1
File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
___________________________________
CENTRAL AND SOUTH WEST CORPORATION SOUTHWESTERN ELECTRIC POWER COMPANY
1616 Woodall Rodgers Freeway 428 Travis Street
Dallas, Texas 75202 Shreveport, Louisiana 71156-0001
CENTRAL POWER AND LIGHT COMPANY WEST TEXAS UTILITIES COMPANY
539 North Carancahua Street 301 Cypress Street
Corpus Christi, Texas 78401-2802 Abilene, Texas 79601-5820
PUBLIC SERVICE COMPANY OF OKLAHOMA TRANSOK, INC.
212 East Sixth Street 2 West Sixth Street
Tulsa, Oklahoma 74119-1212 Tulsa, Oklahoma 74119
CENTRAL AND SOUTH WEST SERVICES, INC.
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
(Names of companies filing this statement and addresses
of principal executive offices)
__________________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
_________________________________
Stephen J. McDonnell, Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Joris M. Hogan, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
<PAGE> 2
Item 1. Description of Proposed Transaction.
Central and South West Corporation ("CSW"), a Delaware
Corporation and a registered holding company under the Public Utility
Holding Company Act of 1935, as amended (the "Act"), and its subsidiary
companies Central Power and Light Company ("CPL"), Public Service Company
of Oklahoma ("PSO"), Southwestern Electric Power Company ("SWEPCO"), West
Texas Utilities Company ("WTU"), Transok, Inc. ("TOK") and Central and
South West Services, Inc. ("CSWS"), each referred to as a "Subsidiary" and
collectively referred to as the "Subsidiaries", are seeking authorization
through March 31, 1997, to continue the short-term borrowing program and
the CSW System money pool as authorized in File No. 70-8157 and preceding
files. The Subsidiaries together with CSW are referred to herein
collectively as the "Applicants".
Borrowing Limits
Proposed Borrowing Limits. The Applicants request authorization
to incur short-term borrowings in an aggregate principal amount
outstanding at any one time not to exceed the following amounts, with the
aggregate amount for all of the Applicants together not to exceed the
limitation for CSW:
CSW $1,200,000,000
CPL $ 300,000,000
PSO $ 125,000,000
SWEPCO $ 150,000,000
WTU $ 65,000,000
CSWS $ 110,000,000
TOK $ 200,000,000
Applicants undertake not to borrow pursuant to the authority
requested hereby in excess of those levels permitted from time to time by
the borrowing company's Articles or Certificate of Incorporation. The
<PAGE> 3
proposed maximum borrowing level for each Applicant is the same as is
currently authorized by the Securities and Exchange Commission (the
"Commission"), except for CSW, PSO and WTU. See the orders under file
no. 70-8157 dated June 15, 1994 (HCAR No. 26066), authorizing CSWS to
borrow up to $110 million and retaining jurisdiction over the release of
$40 million of additional borrowing authority; the order dated March 18,
1994 (HCAR No. 26007), authorizing CSW to borrow up to $950 million, CPL
to borrow up to $300 million and CSWS to borrow up to $150 million, with
jurisdiction reserved over all of CSWS' proposed increase and $20 million
of CSW's proposed increase; the order dated September 28, 1993 (HCAR No.
25897), authorizing TOK to borrow up to $200 million; and the order dated
March 31, 1993 (HCAR No. 25777), reauthorizing the CSW System's money pool
authority through March 31, 1995.
Requested Increase in CSW Borrowing Level. CSW proposes to
increase its authorization from $930 million to $1.2 billion for the
following purposes: (1) to fund increased investment in CSW Energy, Inc.
("CSWE") as authorized by the Commission by orders dated September 28,
1990, November 22, 1991 and December 31, 1992 (HCAR Nos. 25162, 25414 and
25728, respectively; 70-7758) and orders relating to specific projects
authorized thereunder; (2) to fund investments in CSW Communications, Inc.
as authorized by the Commission by order dated June 3, 1994 (HCAR No.
26061; 70- 8199) which authorizes CSW to provide up to $25 million in
loans and capital contributions; (3) to fund investments in CSW
International, Inc. ("CSWI") as authorized by the Commission by order
dated November 3, 1994 (HCAR No. 26156; 70-8423) which authorizes CSW to
finance activities of CSWI and its subsidiaries in the form of capital
contributions, loans or open account advances and/or issue guarantees in
<PAGE> 4
the form of letters of credit, bid bonds or other credit support up to an
aggregate principal amount of $400 million to secure certain obligations
in connection with permitted activities incurred by CSWI and its
subsidiaries; (4) to ensure that CSW has sufficient borrowing capacity to
obtain external borrowings in order to loan funds through the CSW System
money pool (the "Money Pool") (as described hereafter) to the Subsidiaries
when required; and (5) to fund short-term borrowing requirements of CSW
that arise out of working capital needs, including timing differences on
the payment of dividends to shareholders and receipt of dividends from the
operating companies in the CSW system. CSW does not currently anticipate
providing $400 million to CSWI through short-term borrowings; however,
certain levels of short-term borrowings will be incurred by CSW on behalf
of CSWI until external financing can be obtained. To date, proceeds of
CSW's outstanding short-term borrowings have also been utilized to fund
equity investments in TOK and CSWE of $150 million and $46 million,
respectively, and loans to various CSWE projects totaling $214 million.
Requested Increase in PSO Borrowing Level. PSO proposes to
increase its authorization from $100 million to $125 million to provide
interim financing for additional capital expenditures and other temporary
working capital needs.
Requested Increase in WTU Borrowing Level. WTU proposes to
increase its authorization from $50 million to $65 million to provide
interim financing for additional capital expenditures and other temporary
working capital needs.
CSWS Borrowing Level. By order dated November 30, 1994 (HCAR No.
26178; 70-8459), CSWS was authorized to borrow up to $60 million from one
or more commercial banks for the purpose of permanently refinancing
<PAGE> 5
certain assets (the "Assets"), including the CSW headquarters building in
Dallas, Texas. On December 22, 1994, CSWS borrowed $60 million pursuant
to a credit agreement with First Interstate Bank of Texas, N.A., as agent,
to refinance the Assets by paying down Money Pool borrowings which
previously financed the Assets. In File No. 70-8459, CSWS undertook to
"address the appropriate level for its Money Pool borrowing authority to
the extent that proceeds received from the bank financing... have been
applied to reduce CSWS's outstanding Money Pool borrowings." At December
31, 1994, after the application of the proceeds from the aforementioned
credit agreement to pay down Money Pool borrowings, CSWS' Money Pool
borrowings were approximately $63,103,000. CSWS has considered its
current level of Money Pool borrowings and reviewed its future short-term
borrowing needs and hereby requests that its authorized borrowing limit
remain at $110 million and withdraws its previous request for $40 million
of additional borrowing authority. CSWS had previously requested that its
authorized borrowing level hereunder be established at $150 million in
File No. 70-8157. The Commission had reserved jurisdiction over $40
million of the proposed increase. See the order dated June 15, 1994
(HCAR No. 26066; 70-8157).
CSWS requests that the limit be set at $110 million to permit
increased short-term borrowing resulting from the recent restructuring of
CSW's business and centralization of certain service and management
functions in CSWS (the "Restructuring"). For additional information
relating to the Restructuring, reference is made to the Form U-1
Declaration dated November 3, 1994, in File No. 70-8517. In general, the
Restructuring is designed to consolidate and centralize in CSWS certain
functions heretofore separately performed by CPL, PSO, SWEPCO and WTU (the
"Electric Operating Companies"). In part, the Restructuring shifts
<PAGE> 6
certain management functions relating to the operation of power plants,
certain engineering activities and certain administrative and support
functions from the Electric Operating Companies to CSWS, thereby reducing
costs and freeing the Electric Operating Companies to focus on customer
service, marketing and economic development. Because the Restructuring
consolidates and centralizes certain functions in CSWS, short-term
borrowing by CSWS is periodically increased until such time as CSWS'
billings to the Electric Operating Companies are paid.
Operating Company Charter Restrictions. The charters of each of
the Electric Operating Companies generally prohibit the issuance or
assumption, without the affirmative vote by the holders of a majority of
their preferred stock, of any unsecured debt obligations, if after such
issuance or assumption (i) the principal amount of unsecured debt would
exceed 20% of the aggregate of the principal amount of secured
indebtedness and total capital stock and surplus or (ii) the principal
amount of unsecured debt maturing in less than 10 years would exceed 10%
of such aggregate. Each charter further provides that an unsecured
borrowing which had a maturity of more than 10 years at the date of
issuance is not considered an unsecured obligation maturing in less than
10 years until the principal thereof is due within three years. There are
no comparable limits with respect to TOK, CSWS or CSW.
Use of Proceeds
Proceeds of any short-term borrowings will be used (i) for the
interim financing of the Subsidiaries' capital expenditure programs during
the period and/or to provide for other working capital needs; (ii) in the
case of borrowings by CSW, to loan or contribute as capital to the
Subsidiaries for such purposes (subject, in the case of any capital
<PAGE> 7
contribution, to separate authorization by the Commission), to contribute
as capital to other subsidiaries as authorized separately by the
Commission, or for the purposes discussed previously in the section
entitled "Borrowing Limits"; and (iii) to repay previous borrowings
incurred for such purposes.
The estimated capital expenditures for the years 1995-1996 are as
follows:
1995 1996 Total
---- ---- -----
(Millions)
CPL . . . . . . . . . . . . . . . . $108.4 131.0 239.4
PSO . . . . . . . . . . . . . . . . 96.0 96.0 192.0
SWEPCO. . . . . . . . . . . . . . . 90.5 90.0 180.5
WTU . . . . . . . . . . . . . . . . 36.0 48.4 84.4
CSWS. . . . . . . . . . . . . . . . 7.5 5.0 12.5
TOK . . . . . . . . . . . . . . . . 54.9 60.0 114.90
------ ------ ------
$393.3 $430.4 $823.7
====== ====== ======
Such estimates are subject to change due to numerous factors,
including the rate of load growth, escalation of construction costs,
changes in nuclear and environmental regulation, delays from regulatory
hearings, the adequacy of rate relief and the availability of necessary
external capital.
Neither CSW nor any of the Subsidiaries will use the requested
borrowings to finance the acquisition of an "exempt wholesale generator"
or "foreign utility company", as those terms are defined in Sections 32
and 33 of the Act, respectively, without filing a post-effective amendment
to their application-declaration requesting authority to use Money Pool
borrowings for such purposes.
<PAGE> 8
Money Pool
By Order dated December 30, 1976 (HCAR No. 19829; 70-5930) and in
subsequent orders, the Commission authorized CSW to establish and utilize
a system money pool (the "Money Pool") to coordinate and provide for the
short-term cash requirements of the Applicants. Short-term funds are
available through the Money Pool from the following sources for use by the
Applicants from time to time:
(1) Surplus funds in the treasuries of CPL, PSO, SWEPCO, WTU and
TOK (the "Operating Companies").
(2) Surplus funds in the treasury of CSW.
(3) External borrowings by CSW from the sale of commercial paper
and/or bank borrowings.
Funds to be loaned to the borrowing Subsidiaries are obtained
only from these fund sources in the order of priority stated above. In
other words, if any of the Operating Companies has surplus funds available
(subject to exceptions described below), these will be used to satisfy
borrowing needs of other Subsidiaries before funds of CSW are used, and
external borrowings by CSW would not be made unless there were not surplus
funds in the treasuries of the Subsidiaries or CSW sufficient to meet
borrowing needs. To be filed by amendment as Exhibit 9 are summary
projections of sources and applications of funds for each Applicant for
the period from January 1, 1995 through March 31, 1997. These projections
indicate the anticipated quarter-end borrowing levels and surplus funds
available to the Money Pool over the period. The differences between the
authorized borrowing levels requested and the projected quarter-end
borrowing levels are due to the inclusion of a safety margin required
because of the inherent nature of projections and such factors as possible
timing differences in the sale of long-term securities which will be used
<PAGE> 9
to refund short-term debt, fluctuations in fuel expenses, daily
fluctuations of short-term cash requirements and resulting borrowing
levels, changes in weather which affects income, escalation and timing of
construction expenditures and other similar unpredictable events.
When more than one Subsidiary is borrowing, each borrowing
Subsidiary will borrow pro rata from each fund source in the same
proportion that the amount of funds provided by that fund source bears to
the total amount of short-term funds available to the Money Pool. For
example, if 40% of the total amount of short-term funds available to the
Money Pool is provided from surplus funds in the treasuries of the
Operating Companies, 10% provided by surplus funds in the CSW treasury and
50% provided by external commercial paper borrowings, then each borrowing
Subsidiary would have received 40% of its required short-term funds from
surplus funds in the treasuries of the Operating Companies, 10% from
surplus funds in the CSW treasury and 50% from external commercial paper
borrowings. No loan will be made by CSW or a Subsidiary if the borrowing
Subsidiary could borrow more cheaply directly from banks or through the
sale of its own commercial paper (the latter subject to any necessary
authorization by the Commission). The determination of whether a
Subsidiary or CSW has at any time surplus funds to lend will be made by
its treasurer or by its designee on the basis of cash flow projections.
No Subsidiary may make a loan to CSW.
Any loan to one of the Subsidiaries shall be authorized by its
treasurer or by its designee. Operation of the Money Pool, including
record keeping and coordination of loans, is handled by CSWS under the
authority of the treasurer of CSW and/or CSWS.
<PAGE> 10
The interest rate applicable on any day to the then outstanding
loans through the money pool will be the composite weighted average daily
effective cost incurred by CSW for short-term borrowings from external
sources. If there are no borrowings outstanding then the rate would be
the CD yield equivalent of the 30-day Federal Reserve "AA" Industrial
Commercial Paper Composite Rate (the "Composite"), or if no Composite is
established for that day, then the applicable rate will be the Composite
for the next preceding day for which the Composite is established.
Commercial Paper Borrowings
CSW in recent years has met its short-term borrowing needs and
those of the Subsidiaries through the sale of commercial paper through
commercial paper dealers (the "Dealers"). CSW requests authority to issue
and sell commercial paper during the period to one or more Dealers subject
to the limitations on aggregate outstanding principal amount stated above.
There is no affiliation between CSW or any of its subsidiaries and any
Dealer or any of its affiliates. The proceeds from the sale of commercial
paper will be added to CSW's treasury funds and loaned by CSW through the
Money Pool from time to time to, or invested in, the Subsidiaries in the
manner herein described.
The commercial paper which CSW proposes to issue to Dealers will
be in the form of either physical or book-entry unsecured promissory notes
(in the forms or substantially in the forms filed herewith as Exhibit 1),
in varying denominations of not less than $25,000 each, varying maturities
of not more than 270 days from date of issue and will be issued and sold
by CSW from time to time through March 31, 1997. Such notes will be
issued and sold by CSW directly to Dealers at a rate not to exceed the
rate per annum prevailing at the time of issuance for commercial paper of
<PAGE> 11
comparable quality and maturity sold by issuers thereof to commercial
paper dealers. No commission or fee will be payable in connection with
the issuance and sale of the commercial paper. The purchasing Dealer,
however, will reoffer such notes at a rate less than the rate to the
issuer and, as principal, will reoffer such notes in such a manner as not
to constitute a public offering under the Securities Act of 1933.
CSW's commercial paper notes sold to Dealers are expected to be
held by customers to maturity, except that if customers wish to sell such
notes prior thereto, the Dealers generally will repurchase such notes and
reoffer them to other customers.
CSW also requests authorization to sell commercial paper directly
to certain financial institutions. Sales of commercial paper directly to
such institutions will be undertaken only if the resulting cost of money
is equal to or less than that available from dealer-placed commercial
paper or bank borrowings. Terms for directly-placed notes would be
similar to those of dealer-placed notes.
Bank Borrowings
CSW believes that the issuance of commercial paper would in most
periods result in effective interest costs lower than the interest costs
of borrowing from commercial banks. In the event, however, that
borrowings from banks would produce a lower cost of money than the
issuance of CSW's commercial paper, and to the extent that CSW's corporate
funds and Operating Company loans of excess funds through the Money Pool
were inadequate to fulfill the Subsidiaries' requests for short-term
loans, CSW or the Subsidiaries would propose and hereby request authority
to borrow from banks, from time to time prior to March 31, 1997, subject
to the limitations on aggregate principal amount stated above. CSW and
<PAGE> 12
the Operating Companies currently have lines of credit aggregating
$930,000,000 with a group of banks. Such banks and the current maximum
principal amounts of their respective lines of credit are filed herewith
as Exhibit 2. CSW may, from time to time, negotiate increases or
decreases to existing lines of credit or arrange new lines of credit in
order to minimize the cost of maintaining these lines by matching the
aggregate amount of credit lines available to the Applicants' anticipated
short-term borrowing needs. In no event will the aggregate amount of
credit lines maintained exceed the Applicants' total borrowing authority.
Borrowings from banks would be evidenced by promissory notes
(substantially in the form filed herewith as Exhibit 3). Each of such
notes would be for the principal amount to be borrowed at the time from
the lending bank and be payable to the order of such bank, would be
borrowed on a date no later than March 31, 1997, and would bear interest
at a rate no higher than the effective cost of money for unsecured prime
commercial bank loans prevailing on the date of such borrowing. The notes
would be subject to prepayment at the option of borrower, or under certain
circumstances with the consent of the lending bank, in whole at any time
or in part from time to time, without premium or penalty.
Compensation arrangements under the lines of credit maintained by
CSW and the Operating Companies are on a balance or fee basis. In
general, fees range from 1/10 to 1/5 of 1% per annum on the average unused
portion of the commitment and balance arrangements require average
balances of 3% of the amount of the commitment.
The cost of compensating balances and fees paid to banks to
maintain credit lines will be initially allocated to the Operating
Companies (including CSW when it borrows for its own corporate needs) on
<PAGE> 13
the basis of relative maximum non-coincidental outstanding short-term
borrowings for the prior calendar year, and such costs will be
retroactively reallocated at the end of each calendar year on the basis of
that year's actual relative maximum non-coincidental outstanding short-
term borrowings of each Operating Company (including CSW when it borrows
for its own corporate needs). Thus, each company will be reallocated that
proportion of the total cost of maintaining lines of credit which is equal
to the percentage which its maximum short-term borrowings during the year
represents of the aggregate of the maximum short-term borrowings, on a
non-coincidental basis, of all the Operating Companies and CSW.
Additionally, the Applicants request authorization to borrow
funds managed by the trust departments of banks if such borrowings result
in a cost of money equal to or less than that available from the sale of
commercial paper or other bank borrowings. Each such borrowing would be
evidenced by notes payable on demand.
Maturities
Subject to the limitations set forth above, commercial paper and
bank borrowings will be tailored to mature at such time as excess funds
from CSW or any Operating Company were expected to become available for
loans through the Money Pool. Upon the availability of any such funds,
external borrowings would be retired and loans refinanced to the extent
such funds became available.
Form of Loans to Subsidiaries
Loans to the Subsidiaries through the Money Pool will be made
pursuant to open account advances, although any lender would at all times
be entitled to receive upon demand a promissory note evidencing the
transaction. Any such note would, in the case of loans from CSW, be
<PAGE> 14
substantially in the form filed herewith as Exhibit 4, dated as of the
date of the initial borrowing, maturing on a date agreed to by the parties
to the transaction, but in no event later than March 31, 1997, and
prepayable in whole at any time or in part from time to time, without
premium or penalty. In the case of loans by an Operating Company, the
promissory note, if any, would be substantially in the form of the note
described above, except that its maturity date would in no event be later
than the earlier of (i) the date the borrower could be expected to obtain
funds with which to pay the note or (ii) the date the lender would require
the excess funds for its own use. At maturity of a note, either the same
or another Operating Company with excess funds would make the loan through
the Money Pool or CSW would make the loan itself from available corporate
funds or proceeds of its borrowings as contemplated in this Application-
Declaration.
The note to be used for both loans from CSW and loans by an
operating company is a promissory demand note which will bear interest as
follows. The outstanding principal amount of the note shall bear
interest, calculated daily, at a rate equal to CSW's weighted daily
average effective cost for all short-term borrowings from external sources
outstanding on that date or if there are no borrowings from external
sources outstanding on that date, then at the rate equal to the CD yield
equivalent of the 30-day Federal Reserve "AA" Industrial Commercial Paper
Composite (or if no composite rate is established by the Federal Reserve
for that day, then the CD yield equivalent of the composite provided for
the next preceding day for which a composite is established). Interest
will be calculated on the daily outstanding principal amount as indicated
<PAGE> 15
on a grid on the reverse side of the note. Open account advances that are
not evidenced by a note will be made on the same terms as the notes
specified above.
Reporting
CSW, on behalf of the Applicants, will report quarterly to the
Commission pursuant to Rule 24 under the Act within 30 days after the end
of each calendar quarter (i) each Applicant's maximum principal amount of
short-term borrowings outstanding and the Commission's limit on such
borrowings, (ii) the weighted average interest rate for borrowings through
the Money Pool over the period and (iii) the maximum amount of CSW's
short-term borrowings on behalf of itself and the Subsidiaries during the
period and the Commission limit on such borrowings.
Item 2. Fees, Commissions and Expenses.
An estimate of the fees and expenses to be paid or incurred by
the Applicants in connection with the proposed transactions is set forth
below:
Amount
-------
Holding Company Act filing fee .................. $ 2,000*
Rating agency fees for commercial
paper (annual):
Moody's Investors Service, Inc. ................. 32,000
Duff & Phelps, Inc. ............................. 10,000
Counsel fees:
Milbank, Tweed, Hadley & McCloy
New York, New York .............................. 7,000
Miscellaneous and incidental expenses
including travel, telephone and
postage ......................................... 2,000
-------
Total $53,000
=======
_______________
* Actual amount.
Fees with respect to bank borrowings are set forth in Item 1.
<PAGE> 16
Item 3. Applicable Statutory Provisions.
Sections 6, 7, 9(a), 10, 12(b) and 12(f) of the Act and Rules 43
and 45 thereunder are or may be applicable to the proposed transactions.
To the extent any other sections of the Act may be applicable to the
proposed transactions, the Applicants hereby request appropriate orders
thereunder.
Item 4. Regulatory Approval.
No state regulatory authority and no federal regulatory authority,
other than the Commission under the Act, have jurisdiction over the
proposed transactions.
Item 5. Procedure.
It is requested that the Commission issue and publish no later than
January 27, 1995, the requisite notice under Rule 23 with respect to the
filing of this Application-Declaration, such notice to specify a date not
later than February 20, 1995, as the date after which an order granting
and permitting this Application-Declaration to become effective may be
entered by the Commission and that the Commission enter not later than
February 21, 1995, an appropriate order granting and permitting this
Application-Declaration to become effective.
The Applicants respectfully request that appropriate and timely
action be taken by the Commission in this matter.
No recommended decision by a hearing officer or other responsible
officer of the Commission is necessary or required in this matter. The
Division of Investment Management of the Commission may assist in the
preparation of the Commission's decision in this matter. There should be
no thirty-day waiting period between the issuance and the effective date
<PAGE> 17
of any order issued by the Commission in this matter, and it is
respectfully requested that any such order be made effective immediately
upon the entry thereof.
Item 6. Exhibits and Financial Statements.
Exhibit 1 - Form of commercial paper note.
Exhibit 2 - CSW System bank lines of credit at December 31,
1994.
Exhibit 3 - Form of note to evidence borrowings from banks.
Exhibit 4 - Form of note to be executed by borrowing
Subsidiaries to CSW or other Subsidiaries.
Exhibit 5 - Preliminary opinion of Milbank, Tweed, Hadley &
McCloy, counsel to the Applicants (to be filed by
amendment).
Exhibit 6 - Financial statements per books and pro forma as of
December 31, 1994 of CSW and Subsidiaries (to be
filed by amendment).
Exhibit 7 - Final or "Past Tense" opinion of Milbank, Tweed,
Hadley & McCloy, counsel to the Applicants (to be
filed with Certificate of Notification).
Exhibit 8 - Proposed Notice of Proceeding.
Exhibit 9 - Projections of Cash Flow for each Applicant for the
period January 1, 1995 through March 31, 1997 (to
be filed by amendment).
Exhibit 10 - Operation of Central and South West System Money
Pool.
Item 7. Information as to Environmental Effects.
The proposed transactions do not involve major federal action
having a significant effect on the human environment. To the best of the
Applicants' knowledge no federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed transactions.
<PAGE> 18
S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned companies have duly
caused this document to be signed on their behalf by the undersigned
thereunto duly authorized.
Dated: January 20, 1995
CENTRAL AND SOUTH WEST CORPORATION CENTRAL POWER AND LIGHT COMPANY
By /s/ STEPHEN J. MCDONNELL By /s/ SHIRLEY S. BRIONES
Stephen J. McDonnell Shirley S. Briones
Treasurer Treasurer
PUBLIC SERVICE COMPANY OF OKLAHOMA SOUTHWESTERN ELECTRIC POWER COMPANY
By /s/ SHIRLEY S. BRIONES By /s/ SHIRLEY S. BRIONES
Shirley S. Briones Shirley S. Briones
Treasurer Treasurer
WEST TEXAS UTILITIES COMPANY TRANSOK, INC.
By /s/ SHIRLEY S. BRIONES By /s/ O. T. Stewart
Shirley S. Briones O. T. Stewart
Treasurer Treasurer and Controller
CENTRAL AND SOUTH WEST SERVICES, INC.
By /s/ SHIRLEY S. BRIONES
Shirley S. Briones
Treasurer
<PAGE> 1
INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBIT METHOD
- ------- ------- ------------
1 Form of commercial paper note. Electronic
2 CSW System bank lines of credit at Electronic
December 31, 1994.
3 Form of note to evidence borrowings Electronic
from banks.
4 Form of note to be executed by Electronic
borrowing Subsidiaries to CSW or other
Subsidiaries.
5 Preliminary opinion of Milbank, Tweed, ---
Hadley & McCloy, counsel to the
Applicants (to be filed by amendment).
6 Financial statements per books and pro ---
forma as of December 31, 1994 of CSW
and Subsidiaries (to be filed by
amendment).
7 Final or "Past Tense" opinion of Milbank, ---
Tweed, Hadley & McCloy, counsel to the
Applicants (to be filed with Certificate
of Notification).
8 Proposed Notice of Proceeding. Electronic
9 Projections of Cash Flow for each Applicant ---
for the period January 1, 1995 through
March 31, 1997 (to be filed by amendment).
10 Operation of Central and South West System Electronic
Money Pool.
<PAGE> 1
EXHIBIT 1
---------
FORM OF COMMERCIAL PAPER NOTE
(PHYSICAL)
CENTRAL AND SOUTH WEST CORPORATION CONTROL NO. ________
NOTE NUMBER ___________________
ISSUE DATE ____________________
$ _____________________________
ON ________________________ FOR VALUE RECEIVED WE PROMISE TO PAY TO
THE ORDER OF ___________________________________________ THE SUM
OF____________ DOLLARS PAYABLE AT ______________________.
THIS NOTE IS NOT VALID UNLESS COUNTERSIGNED BY CHEMICAL BANK.
ISSUING AGENT
CENTRAL AND SOUTH WEST CORPORATION CHEMICAL BANK
COUNTERSIGNED BY
By:___________________________ By:_____________________
Authorized Signature Authorized Signature
<PAGE> 2
FORM OF COMMERCIAL PAPER NOTE
(BOOK-ENTRY)
CENTRAL AND SOUTH WEST CORPORATION
COMMERCIAL PAPER MASTER NOTE
_________________________________
(Date of Issuance)
CENTRAL AND SOUTH WEST CORPORATION, a corporation organized and existing under
the laws of the State of DELAWARE (the "Issuer"), for value received, hereby
promises to pay to Cede & Co. or registered assigns on the maturity date of
each commercial paper note identified on the records of the Issuer (which
records are maintained by CHEMICAL BANK (the "Paying Agent")) the principal
amount for each such commercial paper note. Payment shall be made by wire
transfer to the registered owner from the Paying Agent without the necessity
of presentation and surrender of this Master Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF.
This Master Note is a valid and binding obligation of the Issuer.
CENTRAL AND SOUTH WEST CORPORATION
(Issuer)
By:_______________________________
<PAGE> 3
(Reverse Side of Note)
At the request of the registered owner CENTRAL AND SOUTH WEST CORPORATION shall
promptly issue and deliver one or more separate note certificates evidencing
each commercial paper note evidenced by this Master Note. As of the date any
such note certificate or certificates are issued, the commercial paper notes
which are evidenced thereby shall no longer be evidenced by this Master Note.
___________________________________________________________________FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
_________________________________ the Master Note and all rights thereunder,
hereby irrevocably constituting and appointing ______________________________
Attorney to transfer said Master Note on the books of the Issuer with full
power of substitution in the premises.
Dated: __________________________________
(Signature)
Signature(s) Guaranteed:
NOTICE: The signature on this assignment must
correspond with the name as written upon the face
of this Master Note, in every particular, without
alteration or enlargement or any change
whatsoever.
(The following shall appear as a legend)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 1
EXHIBIT 2
---------
CSW SYSTEM BANK LINES
DECEMBER 31, 1994
AMOUNT
OF LINE
-------
LINES AVAILABLE TO CSW AND/OR
SUBSIDIARIES:
Maintained by CSW
Bank of New York $130,000,000
Mellon Bank 200,000,000
Morgan Guaranty Trust Company
of New York 65,000,000
Texas Commerce Bank, Dallas 65,000,000
Canadian Imperial Bank of
Commerce 50,000,000
Citibank, N.A. 50,000,000
Credit Suisse 50,000,000
Swiss Bank Corporation 50,000,000
Union Bank of Switzerland 50,000,000
NationsBank 40,000,000
First Interstate Bank of
Texas 35,000,000
Sanwa Bank 35,000,000
Sumitomo Bank 35,000,000
Barclays Bank 30,000,000
Bank of Tokyo 25,000,000
Chemical Bank 20,000,000
------------
Total Maintained by CSW $930,000,000
============
TOTAL LINES AVAILABLE TO CSW
AND/OR SUBSIDIARIES $930,000,000
============
<PAGE> 1
EXHIBIT 3
---------
FORM OF NOTE TO EVIDENCE
BORROWINGS FROM THE BANK
US $ [Amount] [Date]
FOR VALUE RECEIVED, the undersigned, Central and South West
Corporation ("Borrower"), hereby promises to pay to the [Bank Name]
("Bank"), at the lending office of the Bank or at such other place as the
holder herefor shall designate, the unpaid principal amount of each loan
made to the Borrower by the Bank under the Letter Agreement referred to
below in U.S. Dollars and in immediately available funds on the respective
maturity date for such loan with interest on the unpaid principal amount of
each such loan (as well as any overdue payments and overdue interest) as
specified in the Letter Agreement.
The Note is expressly subject the terms of that certain Letter
Agreement ("Letter Agreement") dated [Date] between the Borrower and the
Bank, which provides, among other things, for the acceleration of the
maturity hereof upon the occurrence of certain events specified therein.
The Borrower hereby waives demand, presentment for payment, notice of
dishonor or default, notice of intent to accelerate, notice of acceleration,
protest and diligence in collection.
This Note may be prepaid in whole or in parts as set forth in the
Letter Agreement.
The Bank shall record on the schedule attached hereto (including
additional pages, if any) an appropriate notation evidencing the date,
amount, rate of interest and due date of each loan as well as the date and
amount of each payment by the undersigned in respect thereto. The
obligation of the Borrower to repay each loan made hereunder shall be
absolute and unconditional notwithstanding any failure of the Bank to enter
<PAGE> 2
such amounts on the schedule attached hereto. In the event of a
disagreement as to the terms of a transaction, the Bank's records shall
govern, absent manifest error.
This Note shall be governed by and construed in accordance with the
laws of the State of [State Name].
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE AND THE LETTER
AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
Central and South West Corporation
By:___________________________
Title:
Executed by Bank for the purpose of the Notice of Final Agreement set forth
above.
[Bank Name]
By:_____________________________
Title:
<PAGE> 1
EXHIBIT 4
---------
FORM OF NOTE TO BE EXECUTED BY
BORROWING SUBSIDIARIES TO CSW
OR OTHER SUBSIDIARIES
_________________, 19____
FOR VALUE RECEIVED, the undersigned, ____________________________
(the "borrower"), hereby promises to pay the order of __________ (the
"lender") at its principal office in __________________, on demand or on
________________, 19___, or at the option of the borrower, whichever first
occurs, the principal sum set forth below as "Principal Amount Outstanding".
This note may be paid in full at any time or in part from time to time
without premium or penalty. The Principal Amount Outstanding shall bear
interest, calculated daily, at a rate equal to Central and South West
Corporation's weighted daily average effective cost for all short-term
borrowings from external sources outstanding on that date of if there are no
borrowings from external sources outstanding on that date, then the rate
equal to the CD yield equivalent of the 30-day Federal Reserve "AA"
Industrial Commercial Paper Composite (or if no composite rate is
established by the Federal Reserve for that day, then the CD yield
equivalent of the composite provided for the next preceding day for which a
composite is established). Interest will be calculated on the daily
Principal Amount Outstanding as indicated on the grid on the reverse side
hereof or attached hereto.
_______________________________
(Name of Borrower)
By:____________________________
By:_____________________________
<PAGE> 2
<TABLE>
<CAPTION>
Principal
Loan Amount
Date (Repayment) Outstanding Rate Interest
- -------- ------------------- ---------------- ------ --------
<S> <C> <C> <C> <C>
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
________ ___________________ ________________ ______ ________
</TABLE>
<PAGE> 1
EXHIBIT 8
---------
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935 ("Act")
_____________ ___, 1995
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the proposed
transaction(s) summarized below. The application(s) and/or declaration(s)
and any amendment(s) thereto is/are available for public inspection through
the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
______________, 1995, to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) specified below. Proof of service (by
affidavit, or, in case of an attorney at law, by certificate) should be
filed with the request. Any request for hearing shall identify specifically
the issues of fact or law that are disputed. A person who so requests will
be notified of any hearing, if ordered, and will receive a copy of any
notice or order issued in the matter. After said date, the application(s)
and/or declaration(s), as filed or as amended, may be granted and/or
permitted to become effective.
<PAGE> 2
Central and South West Corporation, et al. (70- )
Central and South West Corporation ("CSW"), a registered holding
company, its service company subsidiary, Central and South West Services,
Inc. ("Services"), both located at 1616 Woodall Rodgers Freeway, Dallas,
Texas 75202, and five of its operating subsidiaries, Central Power and Light
Company ("CPL"), 539 North Carancahua Street, Corpus Christi, Texas 78401-
2802, Public Service Company of Oklahoma ("PSO"), 212 East Sixth Street,
Tulsa, Oklahoma 74119-1212, Southwestern Electric Power Company ("SWEPCO"),
428 Travis Street, Shreveport, Louisiana 71156-0001, West Texas Utilities
Company ("WTU"), 301 Cypress Street, Abilene, Texas 79601-5820, Transok,
Inc. ("Transok"), 2 West Sixth Street, Tulsa, Oklahoma 74119 (collectively,
"Subsidiaries") have filed an application-declaration under Sections 6(a),
7, 9(a), 10, 12(b) and 12(f) of the Act and Rules 43 and 45 thereunder.
CSW and its Subsidiaries propose to continue, through March 31,
1997, their short-term borrowing program, which includes the sale of
commercial paper by CSW to commercial paper dealers and financial
institutions and the sale of short-term notes to banks and their trust
departments by CSW and the Subsidiaries ("External Program") and the CSW
System money pool ("Money Pool"), as previously authorized by orders dated
June 15, 1994, March 18, 1994, September 28, 1993 and March 31, 1993 (HCAR
Nos. 26066, 26007, 25897 and 25777) ("Prior Orders"). The External Program
would be coordinated through the use of the Money Pool, whereby CSW and its
Subsidiaries would make loans to, and the Subsidiaries would borrow from,
the Money Pool. Loans to the Subsidiaries through the Money Pool will be
made pursuant to open-account advances, although any lender would at all
times be entitled to receive upon demand a promissory note evidencing the
transaction.
<PAGE> 3
The External Program and the Money Pool would make funds available
to the Subsidiaries for the interim financing of their capital expenditure
programs and their other working capital needs, and to CSW to loan and, when
approved by the Commission, to make capital contributions to any of its
subsidiaries and in both instances to repay previous borrowings incurred for
such purposes. Funds for the Money Pool would be available from surplus
funds from the treasuries of CSW and its operating subsidiaries CP&L, PSO,
SWEPCO, WTU and Transok ("Operating Subsidiaries"), from proceeds from the
sale of commercial paper by CSW and bank borrowings by CSW and its
Subsidiaries. Funds to be loaned to the Subsidiaries are obtained in the
following order of priority: (1) available surplus funds of the Operating
Subsidiaries will be used to satisfy the borrowing needs of other
Subsidiaries before any funds of CSW are used; (2) available surplus funds
in CSW's treasury; and (3) external borrowings by CSW from the sale of
commercial paper and/or bank borrowings. External borrowings by CSW would
not be made unless there were no surplus funds in the treasuries of the
Operating Subsidiaries or CSW sufficient to meet borrowing needs. However,
no loan will be made by CSW or an Operating Subsidiary if the borrowing
company could borrow more cheaply directly from banks or through the sale of
its own commercial paper. When more than one Subsidiary is borrowing, each
borrowing Subsidiary will borrow pro rata from each fund source in the same
proportion that the amount of funds provided by that fund source bears to
the total amount of short-term funds available to the Money Pool.
The interest rate applicable on any day to the then outstanding
loans through the Money Pool will be the composite weighted average daily
effective cost incurred by CSW for short-term borrowings from external
sources. If there are no borrowings outstanding then the rate would be the
certificate of deposit yield equivalent of the 30-day Federal Reserve "AA"
<PAGE> 4
Industrial Commercial Paper Composite Rate ("Composite"), or if no Composite
is established for that day, then the applicable rate will be the Composite
for the next preceding day for which the Composite is established.
The aggregate principal amounts of short-term borrowing outstanding
at any one time requested by CSW and its Subsidiaries are as follows: CSW -
$1.2 billion; CP&L - $300 million; PSO - $125 million; SWEPCO - $150
million; WTU - $65 million; Services - $110 million; and Transok - $200
million. These amounts reflect an increase in borrowing levels from those
authorized in the Prior Orders for (i) CSW of $270 million to accommodate
additional investments in CSW International, Inc., CSW Energy, Inc., CSW
Communications and new Money Pool and short-term borrowing requirements,
(ii) PSO of $25 million to provide interim financing for additional capital
expenditures and other temporary working capital needs and (iii) WTU of $15
million to provide interim financing for additional capital expenditures and
other temporary working capital needs. The aggregate principal amount of
outstanding borrowings for CSW and its Subsidiaries together will not exceed
$1.2 billion.
To provide funds for the Money Pool, CSW requests authorization to
issue and sell commercial paper ("Commercial Paper"). The Commercial Paper
will mature in 270 days or less and will be issued from time to time through
March 31, 1997 to commercial paper dealers ("Dealers") and certain financial
institutions.
The Commercial Paper issued to Dealers will be in the form of either
physical or book-entry unsecured promissory notes. Such notes will be
issued and sold by CSW directly to Dealers at a rate not to exceed the rate
<PAGE> 5
per annum prevailing at the time of issuance for commercial paper of
comparable quality and maturity sold by issuers thereof to Dealers. No
commission or fee will be payable in connection with the issuance and sale
of the Commercial Paper. The purchasing dealer, however, will reoffer such
notes at a rate less than the rate to the issuer and, as principal, will
reoffer such notes in such a manner as not to constitute a public offering
under the Securities Act of 1933.
Sales of Commercial Paper directly to financial institutions will
be undertaken only if the resulting cost of money is equal to or less than
that available from Dealer-placed commercial paper or bank-borrowings.
Terms for directly placed notes would be similar to those of dealer placed
notes.
CSW and its Subsidiaries also request authorization to borrow money
from banks, from time to time through March 31, 1997, to the extent that the
surplus funds of CSW and the Operating Subsidiaries are insufficient to meet
the Subsidiaries' requests for short-term loans and subject to the
limitations on aggregate principal amounts, above. Such borrowing will not
be made unless it would produce a lower cost of money than the issue of
CSW's Commercial Paper and, in any event, they will not bear a rate of
interest higher than the effective cost of money for unsecured prime
commercial bank loans prevailing on the date of such borrowing. The
borrowings will be evidenced by promissory notes maturing no later than
March 31, 1997 and will be subject to prepayment by the borrower, or under
certain circumstances with consent of the lending bank, in whole at any time
or in part from time to time, without penalty.
<PAGE> 6
Compensation arrangements under lines of credit with banks
maintained by CSW and its Subsidiaries are on a balance or fee basis. In
general, fees range from 1/10 to 1/5 of 1% per annum on the average unused
portion of the commitment and balance arrangements require average balances
of 3% of the amount of the commitment.
Additionally, CSW requests authorization, from time to time through
March 31, 1997, to borrow funds managed by the trust departments of banks if
such borrowings result in a cost of money equal to or less than that
available from the sale of commercial paper or other bank borrowings.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
<PAGE> 1
EXHIBIT 10
----------
OPERATION OF
CENTRAL AND SOUTH WEST SYSTEM MONEY POOL
The Central and South West System Money Pool (the "Money Pool")
is a mechanism to coordinate and provide for the short-term cash
requirements of the participants in the Money Pool.
The participants in the Money Pool are Central Power and Light
Company ("CPL"), Public Service Company of Oklahoma ("PSO"), Southwestern
Electric Power Company ("SWEPCO"), West Texas Utilities Company ("WTU"),
Transok, Inc. ("Transok"), Central and South West Services, Inc. ("CSWS")
(collectively, the "Subsidiaries", and, individually, a "Subsidiary") and
Central and South West Corporation ("CSW"). The Subsidiaries together
with CSW are referred to collectively herein as the "Applicants".
The operation of the Money Pool is designed to match, on a daily
basis, the available cash and borrowing requirements of the Subsidiaries,
thereby minimizing the need for borrowings from external sources. In
general, short-term funds are available through the Money Pool from the
following sources for use by the Applicants from time to time:
(1) Surplus funds in the treasuries of CPL, PSO, SWEPCO, WTU
and TRANSOK (the "Operating Companies").
(2) Surplus funds in the treasury of CSW.
(3) External borrowings by CSW from the sale of commercial
paper and/or bank borrowings.
Funds to be loaned to the borrowing Subsidiaries are obtained
only from these fund sources in the order of priority stated above. In
other words, if any of the Operating Companies has surplus funds
available, these will be used to satisfy borrowing needs of other
Subsidiaries before funds of CSW are used, and external borrowings by CSW
would not be made unless there were not surplus funds in the treasuries of
the Subsidiaries or CSW sufficient to meet borrowing needs. Each
borrowing Subsidiary will borrow pro rata from each fund source in the
same proportion that the amount of funds provided by that fund source
bears to the total amount of short-term funds available to the Money Pool.
CSW may lend to the Money Pool but may not borrow therefrom.
The determination of whether a Subsidiary or CSW has at any time
surplus funds to lend will be made by its treasurer or by its designee on
the basis of cash flow projections. No Subsidiary may make a loan to CSW.
<PAGE> 2
On a daily basis the appropriate designee at CSWS contacts the
appropriate designee at each Operating Company to determine their
respective cash positions, in other words, whether they have excess cash
or a deficiency in cash that day. The cash positions are netted and if
there is a net deficiency in cash, CSW issues commercial paper or borrows
from banks. If there is a net excess in cash, commercial paper or bank
borrowings are paid down, or, if there is no commercial paper maturing,
the excess is invested according to the Investment Policy (discussed
below). A statement detailing each Subsidiary's Money Pool activity for
that day is then generated, approved by the Cash Manager and sent to that
Subsidiary. Attached as Attachment A is a sample Money Pool statement.
Any excess funds remaining after satisfying the borrowing needs
of the Applicants and paying down maturing commercial paper and/or bank
borrowings are invested by CSWS as administrator of the Money Pool. The
current policy governing the investment of such funds is attached as
Attachment B. The Investment Policy may be revised from time to time, but
will only allow the acquisition of those securities permitted under
Section 9(c) and Rule 40 of the Public Utility Holding Company Act of
1935.
The Participants have requested authorization to incur short-
term borrowings in an aggregate principal amount outstanding at any one
time not to exceed the following amounts, with the aggregate amount for
all of the Applicants together not to exceed the limitation for CSW:
CSW $1,200,000,000 WTU $ 65,000,000
CPL $ 300,000,000 CSWS $110,000,000
PSO $ 125,000,000 Transok $200,000,000
SWEPCO $ 150,000,000
All borrowings from, and investments through, the Money Pool are
evidenced on the books of each Applicant who is borrowing or investing
available funds through the Money Pool. All loans are unsecured and will
be made pursuant to open account advances, although any lender would at
all times be entitled to receive upon demand a promissory note evidencing
the transaction, and may be prepaid by any borrowing Subsidiary at any
time without premium or penalty. The interest rate applicable on any day
to the then outstanding loans through the Money Pool and funds advanced to
the Money Pool will be the composite weighted average daily effective cost
incurred by CSW for short-term borrowings from external sources. If there
are no borrowings outstanding then the rate would be the CD yield
equivalent of the 30-day Federal Reserve "AA" Industrial Commercial Paper
Composite Rate (the "Composite"), or if no Composite is established for
that day, then the applicable rate will be the Composite for the next
preceding day for which the Composite is established. Interest will be
paid monthly on all borrowings from, and investments through, the Money
Pool.
<PAGE> 3
ATTACHMENT A
Central and South West Services, Inc. Central Power and Light Company
P.O. Box 21928 P.O. Box 2721
Tulsa, Oklahoma 74121-1928 Corpus Christi, Texas 78403
(918) 594-2000 Attn:
STATEMENT OF ACCOUNT
Date:
==============================================================================
Description Amount
==============================================================================
Accounts receivable balance at 12/31/93 $ XXX,XXX.XX
DEBITS TO YOUR ACCOUNT DURING
Charges per automated invoice: XXX,XXX.XX
Arthur Andersen XXX,XXX.XX
Airline tickets XXX,XXX.XX
Systems & programs XXX,XXX.XX
CREDITS TO YOUR ACCOUNT DURING JANUARY
Money pool transaction (XXX,XXX.XX)
-------------
Accounts receivable balance at 1/31/94 $ XXX,XXX.XX
=============
Your money pool account will be charged with the above amount.
cc: Kimberly Poe
==============================================================================
Prepared by________________________ Approved by________________________
<PAGE> 4
ATTACHMENT B
2.2 Short-Term Investment Policy
_________________________________________________________
Overview The short-term investment policy applies to the CSW
System.
_________________________________________________________
Investment The short-term investment goals include:
Goals
* Assure safety of principal
* Retain adequate liquidity to meet projected and
unexpected cash needs.
* Obtain the best available yield within an acceptable
level of risk
_________________________________________________________
Authorization The CSW Treasurer is responsible for the investment
and policy of CSW and its Dallas subsidiaries and the CSW
Responsibilities Investment Pool. Any deviations from the investment
policy must be approved by the Treasurer or Assistant
Treasurer.
The Assistant Treasurer and Cash Manager are responsible
for the implementation, administration and adherence to
the established investment policy.
The day-to-day investment activities are delegated to the
Assistant Treasurer, Cash Manager and Financial Analyst.
_________________________________________________________
Approved Securities dealers must meet the following criteria:
Securities
Dealers * On the list of the primary government securities
dealers reporting to the Federal Reserve Bank of New
York
NOTE: Reporting Dealers are those securities dealers
that are approved by the Federal Reserve Bank of New
York (the Bank) to execute government securities
transactions directly with the Bank and who report
daily trade activity to the Market Reports Division of
the Bank. Qualifications are based on the achievement
and maintenance of reasonable standards of activity and
minimum standards of capital adequacy.
* PSA Repurchase Agreement executed
_________________________________________________________
continued on next page
<PAGE> 5
_________________________________________________________
Approved Domestic banks will meet the following criteria:
Domestic Banks
* One of the 50 largest banks in the U.S. ranked by total
assets
* Total assets of at least $10 billion and net worth of
at least $500 million
* Commercial paper rated at least A1 or P1 and cannot be
split rated (may be rated by only one rating agency)
* Debt rated single A or better
* Certificates of deposit rated A/A-1 or better by S&P
_________________________________________________________
Approved Foreign banks will meet the following criteria:
Foreign Banks
* One of the 50 largest banks in the world, ranked by
total assets
* Total assets of at least $30 billion and net worth of
at least $750 million
* Commercial paper rated at least A1 or P1 and cannot be
split rated (may be rated by only one agency)
* If rated, debt single A or better
_________________________________________________________
Approved The following instruments are approved for investment:
Instruments
* U.S. Treasury Securities
* Obligations of U.S. Government agencies and
instrumentalities
* Certificate of Deposit:
Issued by approved domestic and/or foreign banks
(Yankee CDs issued by U.S. branches of foreign banks)
* Eurodollar Certificates of Deposit:
Issued by overseas branches of approved U.S. banks
and/or foreign banks
* Eurodollar Time Deposits:
Issued by approved domestic and/or foreign banks
_________________________________________________________
continued on next page
<PAGE> 6
_________________________________________________________
Approved * Bankers Acceptances:
Instruments
(continued) Issued by approved domestic and/or foreign banks
* Commercial Paper:
Rated at least A1 or P1 and cannot be split rated (may
be rated by only one agency)
Debt rated single A or better
Commercial paper may be backed by an irrevocable letter
of credit of an approved bank or other type of
guarantee, provided that the supporting entity meets
the investment criterion under the policy
Additional approved instruments are listed below:
* Money Market Funds:
Total assets of at least $500 million
No daily fluctuation in Net Asset Value
At least 90% of the securities purchased are authorized
for direct investment under the policy
Approved by the Treasurer or Assistant Treasurer prior
to investing
* Repurchase Agreements:
Collateral must be securities that are authorized for
direct investment under the policy
* Market value of the collateral must be equal to, or
greater than, the amount of the investment.
_________________________________________________________
Maximum The maximum total principal investment in any one issuer
Investment is $30 million. The maximum repurchase agreement per
approved dealer will not exceed $30 million.
The maximum principal may be one security (e.g., a $30
million commercial paper note) or it may be several
securities (e.g., banker's acceptances, certificates of
deposit, and LOC commercial paper with one bank for which
the sum of the principal amounts invested does not exceed
$30 million).
_________________________________________________________
continued on next page
<PAGE> 7
_________________________________________________________
Maximum From time to time, principal plus interest may exceed $30
Investment million, as in the case of repurchase agreements.
(continued) Reinvested principal plus interest (see Maturity) may not
exceed $31,100,000.
_________________________________________________________
Maturity The length of time to maturity is determined by the yield
curve, subject to the three stated goals of safety of
principal, liquidity and yield.
The maximum maturity allowed for any investment is 270
days. Repurchase agreements must have a fixed maturity
date. Any repurchase agreement not maturing the next
business day will be marked to market on a daily basis to
ensure the repo is 100% collateralized.
Repurchase agreements may be secured by:
* U.S. Treasury securities or its agencies or
instrumentalities, valued at market
* Corporate securities with maturities less than 270 days
with ratings as defined above, valued at market
Money market funds will be limited to those funds which
are restricted to the above maturity guidelines.
_________________________________________________________
Safekeeping All securities purchased must be delivered to a custody
account.
NOTE: This requirement is not applicable for investment
in Eurodollar time deposits (for which there is no
security to deliver), money market funds, repurchase
agreements that have a term of five or fewer business
days, and U.S. Government securities.
The acceptance of due bills in lieu of securities is not
permitted.
U.S. Treasury securities and obligations of U.S.
Government agencies and instrumentalities may be
purchased through the Federal Book Entry System in which
a Federal Reserve receipt is accepted by a safekeeping
agent.
_________________________________________________________
continued on next page
<PAGE> 8
_________________________________________________________
Reporting The following information, as applicable must be reported
for each investment:
* Type of investment
* Issuer
* Dealer
* Rate
* Term
* Amount invested
* Maturity date
* Effective rate on the investment portfolio
_________________________________________________________
Policy Changes Any changes to the investment policy must be approved by
the Treasurer or Assistant Treasurer. There are no
exceptions to the policy unless the transaction is
specifically authorized by the Treasurer or the Assistant
Treasurer.
_________________________________________________________
end of section
