File No. 70-9107
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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CENTRAL AND SOUTH WEST CORPORATION CENTRAL POWER AND LIGHT COMPANY 1616 Woodall
Rodgers Freeway 539 North Carancahua Street Dallas, Texas 75202 Corpus Christi,
Texas 78401-2802
(Names of companies filing this post-effective amendment and address of
principal executive offices)
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CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
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Wendy G. Hargus, Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Kevin F. Blatchford, Esq.
Sidley & Austin
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
(Names and addresses of agents for service)
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Item 1. Description of Proposed Transaction.
Central and South West Corporation and Central Power and Light
Company hereby amend Item 1 of this Application-Declaration by adding the
following thereto:
Summary
By order dated December 30, 1997 (Release No. 35-26811) (the
"Order"), the Securities and Exchange Commission (the "Commission") granted and
permitted to become effective the Form U-1 Application-Declaration, as amended
(File No. 70-9107), of 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"), its subsidiaries, Central Power and
Light Company ("CPL"), Southwestern Electric Power Company ("SWEPCO"), West
Texas Utilities Company ("WTU"), and certain other subsidiaries of CSW (CPL,
SWEPCO, WTU and such other subsidiaries of CSW are sometimes collectively
referred to herein as the "Subsidiaries"). The Order authorized through December
31, 2002 (the "Authorization Period"), subject to certain limitations set forth
therein, among other things: (i) certain external financings by CSW and the
Subsidiaries; (ii) the acquisition by CSW of common stock of the Subsidiaries;
(iii) the Subsidiaries to repurchase their common stock from CSW; (iv) CSW and
the Subsidiaries to obtain certain credit enhancements (e.g., letters of credit,
liquidity facilities and insurance) for the external financings authorized by
the Order; (v) the creation and capitalization by the Subsidiaries of new
corporations, trusts, partnerships or other entities for the purpose of
facilitating certain types of financing authorized by the Order; (vi) certain
guarantees by the Subsidiaries of the obligations of their subsidiary financing
entities; and (vii) certain refinancing, tender offers and retirements of debt
and equity securities of the Subsidiaries. In the Order,
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the Commission reserved jurisdiction "over Applicants' proposals to . . .
issue additional types of securities . . . " as well as certain other matters.
Pursuant to the Order and such reservation of jurisdiction,
CSW and CPL hereby file this Post-Effective Amendment No. 1 to the
Application-Declaration. This Post-Effective Amendment seeks authorization for
CPL, or any affiliated successor in interest to its electric distribution
businesses and assets, to engage (in addition to the other transactions
authorized by the Order) in the transactions described herein from time to time
during the period beginning with the effective date of a supplemental order
issued in this proceeding pursuant to this Post-Effective Amendment through the
Authorization Period. To the extent not already authorized in the Order, CSW and
CPL seek authority to:
(a) form one or more new wholly-owned entities to carry out the
transactions contemplated by this Post-Effective Amendment
(each a "Special Purpose Issuer") which are expected to be any
one of the following: a trust, corporation, limited liability
company or partnership;
(b) acquire all the equity securities issued by each Special
Purpose Issuer to establish its ownership of that Special
Purpose Issuer;
(c) transfer to a Special Purpose Issuer from time to time
transition property and associated transition charges (to be
created by the Public Utility Commission of Texas ("PUCT")
pursuant to the Texas Public Utility Regulatory Act, Section
39 (the "Statute")) in exchange for the net proceeds from the
sale of transition bonds by such Special Purpose Issuer;
(d) cause any Special Purpose Issuer to issue and sell transition
bonds ("Transition Bonds") from time to time in such amounts
and as otherwise authorized and approved by the PUCT pursuant
to the terms and conditions of a PUCT financing order (a
"Financing Order") and in accordance with the Statute (the
principal amount of Transition Bonds so issued shall not
reduce the amount of external financings previously authorized
by the Order);
(e) enter into or cause any Special Purpose Issuer to enter into
interest rate swaps, interest rate hedging programs and credit
enhancement arrangements to reduce interest rate risks with
respect to, and to facilitate the offering of, Transition
Bonds;
(f) enter into a Servicing Agreement, an Administration Agreement
and any other agreement required for the purposes of the
transactions described herein;
(g) apply the proceeds received from the sale of the Transition
Bonds as authorized by the Statute and the Financing Order,
including the acquisition, redemption, retirement and
defeasance of certain of their outstanding debt and equity
securities; and
(h) engage in certain related transactions described herein.
Except to the extent modified by a supplemental order issued
by the Commission pursuant to this Post-Effective Amendment, CSW and CPL request
that the Order remain in full force and effect and that the provisions of the
Order shall apply to the transactions and securities described herein. CSW and
CPL further request that the Commission grant such further authorizations as may
be necessary in connection with the transactions described herein to enable CPL
to comply with the terms of each Financing Order issued by the PUCT in
accordance with the Statute, provided that such compliance is not inconsistent
with the order or orders of the Commission issued hereunder.
Background
In 1999, Texas enacted the Statute, governing the
restructuring of the electric industry in Texas and providing for retail
competition for electric generation beginning January 1, 2002. The Statute
permits electric utilities with assets located in Texas to recover stranded
costs caused by the transition to a competitive market for electric generation
services, as authorized by the PUCT. Investments in generation related assets
were historically recoverable in rates established by the PUCT but may not be
recoverable in full in rates established by market forces in a competitive
electric generation supply market.
Under the Statute, the PUCT may authorize an electric utility
with assets located in Texas or its designee to issue Transition Bonds that have
a term of not more than 15 years to securitize regulatory assets and other
stranded costs. The proceeds of Transition Bonds may be used solely for purposes
of reducing the amount of recoverable regulatory assets and stranded costs, as
determined by the PUCT in accordance with the Statute, through the refinancing
or retirement of utility debt or equity.
Under the Statute, to the extent authorized from time to time
by the PUCT pursuant to a Financing Order, Transition Bonds may be issued and
sold in an aggregate principal amount up to the sum of the following costs
("Qualified Costs")1:100% of a utility's regulatory assets as of December 31,
1998; 75% of a utility's estimated stranded costs as determined by the PUCT;
100% of the costs of issuing, supporting and servicing the Transition Bonds; and
100% of the costs of retiring and refunding the utility's debt and equity
securities with the proceeds of the Transition Bonds. The Statute authorizes the
PUCT to adopt a Financing Order to approve the issuance of Transition Bonds by
CPL or a third-party assignee of CPL, such as a Special Purpose Issuer. The
rights of CPL under an issued Financing Order, when assigned to a Special
Purpose Issuer, will also create "Transition Property" ("Transition Property")
which will be the primary source of the payment of amounts due under the
Transition Bonds. Transition Property represents the rights and interests under
the Financing Order, including the right to impose, collect and receive
irrevocable "Transition Charges" ("TCs") authorized in the Financing Order. TCs
are generally defined in the Statute as nonbypassable amounts authorized to be
charged for the use or availability of electric service under a Financing Order
to recover a utility's Qualified Costs. The amount of TCs to be imposed will be
calculated at an amount sufficient to pay the principal and interest on the
Transition Bonds when due, premiums, if any, on the Transition Bonds, the costs
of any credit enhancements for the Transition Bonds and the costs of retiring or
repurchasing a portion of existing debt and equity and the fees, costs and
expenses of the issuance of the Transition Bonds and related transactions.
TC's are recoverable from each retail customer located in a
utility's certificated service territory as it existed on May 1, 1999,
regardless of whether that customer continues to purchase electricity from that
electric utility, subject to certain limited exceptions. The TCs will be as
determined and established by the PUCT. In the Financing Order, the PUCT will
provide for periodic adjustments to the TCs ("true-ups") in accordance with the
Statute and the Financing Order. Once a Financing Order becomes effective, the
Financing Order, together with the TC's authorized in that order, are
irrevocable (subject to true-ups). In the Statute, the State of Texas pledges
(the "State Pledge"), for the benefit of the holders of the Transition Bonds,
that it will not take or permit any action that would impair the value of the
Transition Property or reduce, alter or impair the TCs to be imposed, collected
and remitted (except for the true-ups described above) until the Transition
Bonds are paid in full.
The Proposed Transaction
In accordance with the procedures set forth in the Statute,
CPL filed on October 18, 1999 its first application with the PUCT for a
Financing Order authorizing the issuance of Transition Bonds as described in
this Post-Effective Amendment. Such application sought authorization of
Qualified Costs in an aggregate amount of $1,270,247,000 of CPL's Texas retail
generation-related regulatory assets as of December 31, 1998, plus $46,763,000
for the costs of issuing the Transition Bonds and the costs of retiring and
refunding certain of CPL's debt and equity securities with the proceeds
therefrom. Thus, the first application seeks authority for the issuance of
$1,317,010,000 aggregate principal amount of Transition Bonds. Under the
Statute, the PUCT must issue a Financing Order not later than January 18, 2000.
In accordance with the Statute, CPL may from time to time file
one or more additional applications with the PUCT for additional Financing
Orders authorizing the issuance of additional Transition Bonds to recover
Qualified Costs not previously authorized by the PUCT. CPL may also, under
certain circumstances, seek a Financing Order to permit the refunding of
outstanding Transition Bonds.
After the issuance by the PUCT of a requested Financing Order,
CPL will sell and transfer the Transition Property and the associated TC revenue
stream created by that Financing Order to a Special Purpose Issuer.2 The Special
Purpose Issuer will issue Transition Bonds to finance its purchase of the
Transition Property and the associated TC revenue stream from CPL in accordance
with the related Financing Order.
The Special Purpose Issuer may issue Transition Bonds in one
or more series, and each such series may be issued in one or more classes.
Different series may have different maturities and coupon rates and each series
may have classes with different maturities and coupon rates. There will be a
date on which each class of Transition Bonds is expected to be repaid and a
legal final maturity date by which such class of Transition Bonds must be
repaid. Neither the expected final maturity nor the legal final maturity will be
later than 15 years after the date of issuance.
Pursuant to a "Transition Property Servicing Agreement"
between CPL and the Special Purpose Issuer, CPL will act as the "Servicer" of
the TC revenue stream and, in this capacity, such Servicer will, among other
things, (a) bill customers and retail electric providers and make collections on
behalf of the Special Purpose Issuer and (b) file with the PUCT for adjustment
to the TC to achieve a level which allows for payment of all debt service and
full recovery of Qualified Costs to be collected through TCs in accordance with
the amortization schedule for each series and class of Transition Bonds. It
should be noted that CPL may subcontract with its affiliates to carry out some
of its servicing responsibilities, so long as the ratings of the Transition
Bonds are neither reduced nor withdrawn as a result.
CPL will be entitled to compensation, in the form of a
"servicing fee", for its servicing activities and reimbursement for certain of
its expenses in the manner set forth in the Servicing Agreement and other
documentation applicable to each series. In order to satisfy the rating agency
requirements for a "bankruptcy remote" entity, the servicing fee must be an
"arms-length" fee, which would be reasonable and sufficient for a third party
performing similar services. As a result, the servicing fees will be set at an
annual level of not more than 1% of the initial principal amount of the
Transition Bonds while CPL is acting as Servicer and not more than 2% if a third
party is acting as Servicer. CPL will retain any investment earnings on TC
collections from the time of collection until the time of remittance to the
Special Purpose Issuer.
Under certain circumstances specified in a Servicing
Agreement, any entity (including an affiliate of CPL) which becomes the
successor or operator of the major part of CPL's electric transmission and
distribution business may, or may be required to, assume the obligations of CPL
under the Sale Agreement and the Servicing Agreement. If transmission and
distribution are not provided by a single entity successor or operator, the
entity which provides wire service directly to customers may, or may be required
to, assume such obligations.
The Special Purpose Issuer may also enter into an
"Administration Agreement" with CPL or another affiliate of CSW (the
"administrator"). Personnel employed by the administrator would provide
ministerial services on an as-needed basis to the Special Purpose Issuer under
the Administration Agreement. These services will consist primarily of
administrative or housekeeping matters relating to the Special Purpose Issuer
such as providing notices required under its Transition Bond documentation,
maintaining its books and records and maintaining authority to do business in
appropriate jurisdictions. Under the Administration Agreement, the Special
Purpose Issuer will reimburse the administrator for the cost of services
provided.
Use of Proceeds
CPL will use the gross proceeds from the sale of Transition
Bonds as authorized by the Financing Order issued by the PUCT and in accordance
with the Statute. Such use of proceeds may include the following: (i) to pay
costs incurred in the issuance and sale of the Transition Bonds; (ii) to refund
or retire utility debt or equity; and (iii) to pay the costs of such refinancing
and retirement.
The specific steps taken to refinance or retire utility debt
or equity will depend, in large part, on the date on which the proceeds from the
sale of Transition Bonds become available, the then prevailing market conditions
and circumstances of CPL at that time, including but not limited to its overall
financial circumstances and other financial activities that may be in progress
or planned, as well as the advice of its financial advisors.
The Order provides that "... external financings by the
Subsidiaries [approved by the Commission in the Order], other than the refunding
of outstanding securities which will not be limited ..." (emphasis added) will
be subject to certain limitations. CSW and CPL request that the Commission find
that the use of the proceeds of the Transition Bonds constitute "refunding of
outstanding securities" within the meaning of the Order and that the principal
amount of Transition Bonds issued from time to time shall not reduce the amount
of financings previously approved by the Order.3 Such finding is consistent with
the requirement under the Statute that "the proceeds of the transition bonds
shall be used solely for the purposes of reducing the amount of recoverable
regulatory assets and stranded costs, as determined by the commission in
accordance with this chapter, through the refinancing or retirement of utility
debt or equity." (emphasis added)
Interest Rate Swaps
CSW and CPL also seek authority for the Special Purpose Issuer
(and/or CPL, acting on behalf of the Special Purpose Issuer, to be so authorized
to the extent that it is legally required or more cost-effective for CPL to do
so) to enter into transactions to be initiated during the Authorization Period
to convert all or a portion of any Transition Bonds bearing interest at a
floating rate ("Floating Rate Transition Bonds") to fixed rate obligations using
interest rate swaps or other derivative products designed for such purposes.
If authorized hereunder, the Special Purpose Issuer may enter
into one or more interest rate swaps ("Swaps"), or one or more derivative
instruments, such as interest rate caps, interest rate floors and interest rate
collars (collectively, "Derivative Transactions"), with one or more
counterparties from time-to-time through the Authorization Period. The notional
amounts of the swaps and the expected average life of the swaps will not exceed
that of the underlying Transition Bonds.4
Under one swap strategy if interest on the Transition Bonds is
payable at a floating rate, the Special Purpose Issuer would enter into an
interest rate swap with a counterparty whereby it would receive the same
floating rate interest payment from the counterparty as it pays to the
Transition Bondholders. In return, the Special Purpose Issuer would agree to
make payments to the counterparty based upon the principal amount of such
Transition Bonds and at an agreed upon fixed interest rate. The net effect of
such a transaction would be to convert the Floating Rate Transition Bonds to
fixed rate obligations. The term of the interest rate swap would match the
maturity of the Floating Rate Transition Bonds and the swap notional amount
would at all times equal the outstanding principal amount of such bonds. Swaps
or other derivative transactions would be entered into only with highly rated
counterparties. Any swap agreement will also include customary provisions
related to indemnification by CPL or the Special Purpose Issuer for breakage
costs and other losses under certain circumstances related to the termination of
the swap.
Hedging Interest Rate Risk for Anticipated Debt
CSW and CPL also seek authorization for the Special Purpose
Issuer (or CPL, acting on behalf of the Special Purpose Issuer, to be so
authorized to the extent that it is legally required or more cost-effective for
CPL to do so) to enter into an interest rate hedging program ("Hedge Program")
utilizing Derivative Transactions. CPL will determine the optimal structure of
the Hedge Program at the time of execution. CPL may decide to lock-in interest
rates and/or limit exposure to, interest rate increases. CPL will not, at any
time, take possession of any U.S. Treasury securities underlying a hedging
transaction.
These Hedge Programs provide benefits by minimizing the
potential volatility in financing costs. The Hedge Program would be utilized to
fix and/or limit the interest rate risk exposure of any new issuance of
Transition Bonds through: (1) establishing a short position in an
exchange-traded U.S. Treasury futures contract, or one or more designated U.S.
Treasury security(ies) or by paying a fixed rate in a forward starting interest
rate swap (each a "Forward Sale"); (2) the purchase of put options on one or
more designated U.S. Treasury security(ies) or an option to pay a fixed rate in
a forward starting interest rate swap ("Put Options Purchase"); (3) a Put
Options Purchase in combination with the sale of call options ("Call Options
Sale") on one or more designated U.S. Treasury security(ies) or the option to
pay a fixed rate in a forward starting interest rate swap ("Zero Cost Collar");
or (4) some combination of a Forward Sale, Put Options Purchase and/or Zero Cost
Collar.
A Put Options Purchase requires the Special Purpose Issuer to
make an upfront payment to the counterparty in exchange for protection against
rising interest rates. This strategy does not expose the Special Purpose Issuer
to making a payment to unwind the hedge in the event interest rates fall. The
asymmetric payout profile makes this strategy analogous to purchasing insurance
where the risk to the Special Purpose Issuer is known and is limited to the
upfront premium amount paid by the Special Purpose Issuer.
The Zero Cost Collar strategy does not lock in today's
interest rate environment. Under this strategy the Special Purpose Issuer is
left somewhat exposed to rising rates (up to the put strike level) but able to
benefit to some degree from falling rates (down to the call strike level). This
strategy is used frequently when an issuer: (1) wants to limit or cap its
exposure to rising rates; (2) wants to avoid making an upfront option premium
payment; and (3) does not want to just lock in today's interest rate environment
through a Forward Sale.
All Derivative Transactions and transactions entered into
under the Hedge Program will be in compliance with CSW's Risk Management Policy
and Guidelines and will also meet the Financial Accounting Standards Board
requirements for hedge accounting.
Common Equity Ratios
CSW and CPL believe that the issuance of Transition Bonds
should not be viewed as having any adverse impact on the consolidated common
equity ratios of CSW or CPL. As TCs are imposed and collected, such amounts will
be used to pay principal and interest on the Transition Bonds, as well as fees
and expenses related to the transaction. The Transition Bonds are payable solely
from the cash flows provided by the TCs and are, as a result, nonrecourse with
respect to CSW and CPL. Consequently, the Transition Bonds are not true
indebtedness of CSW or CPL for this purpose. In addition, because the sole
source of payment for the Transition Bonds is the related TC cash flow, the
payment of amounts due on Transition Bonds will have no adverse impact on the
regular cash flows of CSW or CPL.
The Statute provides that a transfer of Transition Property by
an electric utility to its assignee (such as CPL's Special Purpose Issuer) that
expressly states that the transfer is a sale or other absolute transfer shall be
a true sale and is not a secured transaction and that title, legal and
equitable, has passed to the transferee. Because the underlying securitized
assets (the Transition Property and its associated TC revenue stream) owned by
the Special Purpose Issuer are isolated from the risks associated with the
business and other assets of CPL, the Transition Bonds are expected to have a
credit rating higher than the credit rating of debt instruments issued by CPL.
The creditworthiness of the Transition Bonds is further increased by the State
Pledge and by the PUCT's issuance of an irrevocable Financing Order which
provides for the true-up procedure previously described.
As mentioned above, it is expected that the rating agencies
will recognize that the Transition Bonds are independent of the credit of CPL by
assigning ratings to the Transition Bonds which are higher than the ratings
assigned to the actual long-term indebtedness of CPL. Bonds similar to the
Transition Bonds which have been issued by other utility companies have been
rated AAA. It is expected that a AAA rating will be achieved by the Transition
Bonds. CPL's current credit ratings from Standard & Poor's Ratings Services,
Moody's Investors Service and Duff & Phelps Credit Rating Co., respectively, for
its senior secured long-term debt are A/A3/A.
For all of these reasons, CSW and CPL believe that the
Commission's traditional concern with the effect of issuances of indebtedness by
a holding company or a subsidiary thereof on its common equity ratio should not
be a factor in this case. Since the Transition Bonds are payable solely from the
cash flows provided by the TCs and are nonrecourse to CSW and CPL, the
Transition Bonds should not be included as long-term debt when considering CSW's
and CPL's common equity ratios and creditworthiness. As previously discussed,
this viewpoint is consistent with the rating agencies' treatment of bonds
similar to the Transition Bonds which have been issued by other utilities.
In its first application with the PUCT for a Financing Order,
CPL is requesting authority to redeem or retire CPL equity in an amount not to
exceed $740,000,000. At this time CSW and CPL are unable to predict exactly how
the proceeds of the Transition Bonds will actually be allocated between debt and
equity. See " Use of Proceeds." However, assuming that $740,000,000 of the
proceeds of the Transition Bonds are used to redeem or retire CPL equity and
$530,247,000 of such proceeds are used to retire other CPL indebtedness, then
the issuance of $1,317,010,000 aggregate principal amount of Transition Bonds by
CPL would reduce its common equity to total capitalization ratio from 51% at
September 30, 1999 to approximately 47%. Under the same assumptions the pro
forma effect on CSW's consolidated common equity to total capitalization ratio
at September 30, 1999 would be a reduction from 46% to 44%.
If, however, the Commission nevertheless determines to treat
the Transition Bonds as ordinary long-term debt for this purpose, then (a) under
the same assumptions listed above regarding the principal amount of Transition
Bonds to be issued and the maximum amount of proceeds which would be utilized to
redeem or retire CPL equity, the consolidated common equity to total
capitalization ratios for CSW and CPL, respectively, as of September 30, 1999
would be reduced to 37% and 24% and (b) based on current projections, CPL's
common equity ratio is projected to exceed 30% by December 31, 2006. To the
extent that CPL redeems or retires its equity in an amount less than
$740,000,000, then its common equity ratio would be higher than 24% and the
length of time projected by CPL for its common equity ratio to exceed 30% might
be shortened.
Under these circumstances, CSW and CPL request an exemption
from the generally required 30% common equity ratio in connection with issuances
of Transition Bonds. Such an exemption will facilitate the objectives of the
Statute, including lower electric rates for Texas consumers. In addition,
because of the nature of the Transition Bonds an exemption will not cause the
weakening of the capital structure of CSW and its subsidiaries.
During the period that CPL's common equity ratio is below 30%
based upon the Commission's determination to treat the Transition Bonds as
ordinary debt, CPL agrees to report to the Commission annually showing its
capital structure and capitalization ratios for the most recent year-end. Such
reports will be submitted within 30 days after CPL's Annual Report on Form 10-K
is filed with the Commission. Such reporting requirement will cease once CPL's
actual consolidated common equity ratio equals or exceeds the Commission's 30%
target.
Item 2. Fees and Expenses
An estimate of the fees and expenses to be paid or incurred by
CSW and CPL in connection with the transactions discussed in this Post-Effective
Amendment will be filed by Amendment.
Item 3. "Applicable Statutory Provisions," is amended to read in its entirety
as follows:
Sections 6(a), 7, 9, 10, 12(b), 12(e) and 12(f) of the Act and
Rules 42, 43, 45, 52, 62, 90 and 91 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, CSW and CPL hereby request appropriate
orders thereunder.
Item 4. Regulatory Approval
Item 4, "Regulatory Approval," is amended by adding the following:
With respect to the proposed issuance of the Transition Bonds
and related matters, the PUCT has jurisdiction pursuant to the Statute. The
transactions described in this Post-Effective Amendment are not subject to the
jurisdiction of any other state commission or of any federal commission other
than the Commission.
Item 5. Procedure
Item 5, "Procedure," is hereby amended by deleting the first two
paragraphs thereof and substituting the following:
Requisite notice under Rule 23 with respect to this
Application- Declaration has been published. No further publication is requested
or required pursuant to the Order. CSW and CPL respectfully request that the
Commission enter an appropriate supplemental order granting and permitting this
Application, as amended hereby, to become effective no later than December 22,
1999.
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 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
CSW and CPL hereby amend Item 6 of this Application-Declaration by
adding the following thereto:
(a) Exhibits
*A-1 Form of Indenture between the Special Purpose Issuer
and the Trustee thereunder, including the form of Transition
Bond
*B-1 Form of Transition Property Sale Agreement
*B-2 Form of Transition Property Service Agreement
*B-3 Form of Administration Agreement
*B-4 Form of Underwriting Agreement
*B-5 Organizational document for Special Purpose Issuer
*C-1 Registration Statement on Form S-3 for the Transition Bonds
*D Form of Application to the Public Utility Commission
of Texas ("PUCT"), including form of proposed Financing
Order.
E-1 Not applicable
*F-1 Opinion of Sidley & Austin
*F-2 "Past tense" Opinion of Sidley & Austin
(b) Financial Statements*
*To be filed by Amendment
Item 7. Information as to Environmental Effects
No amendment
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Signature
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: November 20, 1999
CENTRAL AND SOUTH WEST CENTRAL POWER AND LIGHT
CORPORATION COMPANY
By:/s/ WENDY G. HARGUS By: /s/ WENDY G. HARGUS
Wendy G. Hargus Wendy G. Hargus
Treasurer Treasurer
- --------
1 Under the Statute, Qualified Costs also include certain costs incurred by the
PUCT in a proceeding under the Statute.
2 CSW and CPL believe that the organization and utilization of a Special Purpose
Issuer will not unduly complicate the holding company structure of CSW. Special
Purpose Issuers are necessary components of the transactions described herein
with the resulting benefits provided in the Statute.
3 The Order also provides that "The proceeds from external financing
transactions ... will be ... used principally ... (ii) to acquire, retire, or
redeem securities of which CSW or the Subsidiaries are the issuer ... without
the need for prior Commission approval."
4 Swaps and Derivative Transactions entered into during the Authorization Period
may remain in effect until the maturity of the related Transition Bonds.
