<PAGE>
Pursuant to Rule 424(b)(5)
to Registration No. 333-18473
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 18, 1997)
$125,000,000
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS, MEDIUM-TERM NOTE SERIES
DUE FROM ONE YEAR TO 40 YEARS FROM DATE OF ISSUE
-----------
Central Illinois Public Service Company (the "Company") may from time to
time offer one or more series of First Mortgage Bonds, Medium-Term Note Series
(the "Notes") in an aggregate principal amount of up to $125,000,000. The
Notes will be offered at varying maturities from one year to 40 years from
their dates of issuance. The issue price, fixed interest rate to maturity,
maturity date, and redemption or purchase provisions, if any, for each Note
will be established at the time of issuance of such Note and will be set forth
in a pricing supplement (the "Pricing Supplement") to this Prospectus
Supplement applicable to such Note. Other terms and provisions are set forth
under "Description of Debt Securities" in the Prospectus and "Description of
First Mortgage Bonds, Medium-Term Note Series" herein.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will be represented by a global security registered in the name of a nominee
of The Depository Trust Company or another depository (a "Book-Entry Note").
Interests in Book-Entry Notes will be shown on, and transfers thereof will be
effected only through, records maintained by such depository and its
participants. See "Book-Entry System" in the Prospectus.
The Notes will be issued in denominations of $100,000 or any larger amount
that is an integral multiple of $1,000.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS, THIS
PROSPECTUS SUPPLEMENT OR ANY PRICING SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO THE
PUBLIC(1) COMMISSION(2) COMPANY(2)(3)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 100.00% .150%-.750% 99.85%-99.25%
- ---------------------------------------------------------------------------------------------------
$124,812,500-
Total $125,000,000 $187,500-$937,500 $124,062,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Notes will be sold at 100% of their principal amount except as may be
provided in a Pricing Supplement hereto.
(2) The Company will pay a commission to one or more of the Agents identified
below or an Agent identified in a Pricing Supplement, each as an Agent
(collectively, the "Agents"), in the form of a discount, ranging from
.150% to .750%, depending upon the maturity of the Note, of the principal
amount of any Note sold through such Agent. The Company may also sell the
Notes to any Agent for its own account or for resale to one or more
investors or other purchasers at varying prices relating to prevailing
market prices at the time of resale, as determined by such Agent. Unless
otherwise specified in the applicable Pricing Supplement, any Note sold to
an Agent as principal will be purchased by such Agent at a price equal to
100% of the principal amount thereof, less a discount equal to the
commission applicable to an agency sale of a Note of identical maturity
(which will be the commission set forth above in circumstances in which no
other discount is agreed to), and may be resold by such Agent. In
connection with the purchase of Notes by any Agent as underwriter, such
Agent may use a selling group and may reallow a portion of the discount or
commission payable to such Agent to other dealers or purchasers. See "Plan
of Distribution of Notes" herein.
(3) Before deducting other expenses payable by the Company estimated to be
$480,000, including reimbursement of certain of the Agents' expenses. The
Company has agreed to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Agents may be required to make
in respect thereof.
-----------
The Notes are being offered on a continual basis by the Company through the
Agents, each of which has agreed to use its reasonable best efforts to solicit
purchases of the Notes. In addition, the Notes may be sold to any Agent, as
principal, for resale to investors or dealers. The Notes will not be listed on
any securities exchange, and there can be no assurance that the Notes will be
sold or that there will be a secondary market for any of the Notes. The
Company reserves the right to withdraw, cancel or modify the offer made hereby
without notice. The Company or the Agent who solicits any offer may reject
such offer in whole or in part. See "Plan of Distribution of Notes" herein.
-----------
SMITH BARNEY INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus Supplement is March 18, 1997.
<PAGE>
DESCRIPTION OF FIRST MORTGAGE BONDS, MEDIUM-TERM NOTE SERIES
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Debt Securities" in the accompanying
Prospectus. The Notes will be one or more series of first mortgage bonds as
described in the Prospectus. Capitalized words not defined herein are used or
defined in the Prospectus. The following description will apply to the Notes
unless otherwise specified in the applicable Pricing Supplement.
GENERAL
The Notes are to be issued as one or more series of first mortgage bonds
under the Company's Indenture of Mortgage or Deed of Trust, dated October 1,
1941, as amended and supplemented and as to be further amended by one or more
supplemental indentures providing the terms and provisions of the series of
Notes ("Indenture"), from the Company to First Trust National Association and
an individual successor co-trustee, as Trustees. The Notes are limited to an
aggregate principal amount of $125,000,000.
The Notes will be offered on a continual basis and will mature from one year
to 40 years from the date of issue, as selected by the purchaser and agreed to
by the Company. Each Note will bear interest at a fixed rate specified in the
applicable Pricing Supplement.
The Notes will be issued in denominations of $100,000 or any larger amount
that is an integral multiple of $1,000. See "Book-Entry Notes" herein.
The Pricing Supplement relating to each Note will describe the following
terms: (1) the designation and principal amount; (2) the price (expressed as a
percentage of the aggregate principal amount thereof) at which such Note will
be issued (the "Issue Price"); (3) the date on which such Note will be issued
(the "Original Issue Date"); (4) the date on which such Note will mature (the
"Maturity Date"); (5) the rate per annum at which such Note will bear
interest; (6) provisions, if any, relating to the optional redemption of such
Note or purchase of such Note by the Company at the option of the holder prior
to the Maturity Date; and (7) any other terms of such Note not inconsistent
with the provisions of the Indenture.
Each Note will bear interest from its Original Issue Date at the rate per
annum stated on the face thereof until the principal amount thereof is paid or
made available for payment. Interest on each Note will be payable semiannually
on the interest payment dates specified in the Pricing Supplement and at
maturity or, to the extent of the principal amount redeemed or purchased, upon
earlier redemption or purchase. Each payment of interest in respect of an
Interest Payment Date will include interest accrued to but excluding such
Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
BOOK-ENTRY NOTES
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be issued in whole or in part in the form of one or more global
securities (each a "Global Security") that will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York or such other
depository as is specified in the Pricing Supplement (the "Depository"), and
registered in the name of a nominee of the Depository ("Book-Entry Notes").
Upon issuance, all Book-Entry Notes having the same Original Issue Date,
Maturity Date, redemption and purchase provisions and interest rate will be
represented by one or more Global Securities. Except in certain circumstances,
Book-Entry Notes will not be exchangeable for notes in certificated form and
will not otherwise be issuable in certificated form. See "Book-Entry System"
in the accompanying Prospectus.
REDEMPTION AT THE OPTION OF THE COMPANY
The Pricing Supplement relating to each Note will indicate whether and in
what circumstances such Note will be subject to optional redemption by the
Company prior to its Maturity Date and the redemption prices applicable
thereto.
S-2
<PAGE>
PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
The Notes will be subject to purchase by the Company at the option of the
holders thereof in accordance with the terms of the Notes on the optional
purchase date or dates, if any, as agreed upon by the Company and the
purchasers at the time of sale and specified in the applicable Pricing
Supplement (the "Optional Purchase Dates"). If no Optional Purchase Date is
specified with respect to a Note, the Company will not be obligated to purchase
such Note at the option of the holder thereof prior to its Maturity Date. On
any Optional Purchase Date with respect to a Note, such Note will be subject to
purchase by the Company in whole or in part in increments of $1,000 (or the
minimum denomination specified in the applicable Pricing Supplement) provided
that any remaining principal amount of such Note will be an authorized
denomination of such Note. Unless otherwise specified in the applicable Pricing
Supplement, the purchase price for any Note to be purchased means an amount
equal to the sum of (i) 100% of the unpaid principal amount or the portion
thereof to be repaid plus (ii) accrued but unpaid interest on the principal
amount purchased to the date of purchase. For any Note to be purchased by the
Company, such Note must be received, together with the form thereon entitled
"Option to Elect Purchase" duly completed, by the Trustee at its office (or
such other address of which the Company shall from time to time notify the
holders) not more than 45 or less than 30 days prior to the date of purchase.
Exercise of such purchase option by the holder will be irrevocable.
While Book-Entry Notes are represented by Global Securities held by or on
behalf of the Depository, and registered in the name of the Depository or the
Depository's nominee, the option for purchase by the Company may be exercised
by the applicable Participant that has an account with the Depository, on
behalf of the Beneficial Owners of the Global Security or Securities
representing such Book-Entry Notes, by delivering a written notice
substantially similar to the above mentioned form to the Trustee at its office
(or such other address of which the Company shall from time to time notify the
holders), not more than 45 or less than 30 days prior to the date of purchase.
Notices of elections from Participants on behalf of Beneficial Owners of the
Global Security or Securities representing such Book-Entry Notes to exercise
their option to have such Book-Entry Notes purchased by the Company must be
received by the Trustee, not later than 5:00 p.m., New York City time, on the
last day for giving such notice. In order to ensure that a notice is received
by the Trustee on a particular day, the Beneficial Owner of the Global Security
or Securities representing such Book-Entry Notes must so direct the applicable
Participant before such Participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, Beneficial Owners of the Global
Security or Securities representing Book-Entry Notes should consult the
Participants through which they own their interest therein for the respective
deadlines for such Participants. All notices shall be executed by a duly
authorized officer of such Participant (with signature guaranteed) and shall be
irrevocable. In addition, Beneficial Owners of the Global Security or
Securities representing Book-Entry Notes shall effect delivery at the time such
notices of election are given to the Depository by causing the applicable
Participant to transfer such Beneficial Owner's interest in the Global Security
or Securities representing such Book-Entry Notes, on the Depository's records,
to the Trustee. See "Book-Entry System" in the Prospectus.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulation in connection with any such purchase.
Any Notes purchased, redeemed or otherwise acquired by the Company will be
delivered to the Trustee for cancellation in accordance with the terms of the
Indenture.
OTHER PROVISIONS
Unless otherwise set forth in the Pricing Supplement for any Notes, the Notes
(i) will not be entitled to any sinking fund or debt retirement provision; (ii)
will be entitled to the covenant restricting the payment of dividends on the
Company's common stock described under the caption "Description of Debt
Securities--Limitation on Common Stock Dividends" in the Prospectus and (iii)
will be entitled to the covenant described under "Description of Debt
Securities--Acquisition of Property Subject to a Prior Lien" in the Prospectus,
as presently in effect and as that covenant has been amended as described in
the Prospectus.
S-3
<PAGE>
USE OF PROCEEDS
The use of proceeds of the sale of the Notes will be specified in the
Pricing Supplement.
PLAN OF DISTRIBUTION OF NOTES
The Notes are being offered on a continual basis by the Company through
Smith Barney Inc., First Chicago Capital Markets, Inc., Morgan Stanley & Co.
Incorporated and any other agent (each, an "Agent" and collectively, the
"Agents") that agrees to become a party to the Distribution Agreement dated
June 1, 1995, as amended, among the Company and the Agents, each of which has
agreed to use its reasonable best efforts to solicit purchases of the Notes.
The Notes will be issued at 100% of the principal amount thereof unless
otherwise specified in the applicable Pricing Supplement. The Company will pay
each Agent a commission, in the form of a discount, of .150% to .750% of the
principal amount of each Note, depending on its maturity, sold through such
Agent. The Company may also sell Notes to an Agent acting as principal or to a
group of underwriters named in the applicable Pricing Supplement for whom such
Agent will act as representative, unless otherwise specified in the applicable
Pricing Supplement, at a discount equal to the commission applicable to an
agency sale of a Note of identical maturity. Such Notes may be resold by each
Agent or such underwriters for resale to one or more investors or other
purchasers at varying prices related to prevailing market prices at the time
of such resale, as determined by such Agent. Such Notes may also be resold by
an Agent or such underwriters to certain securities dealers at the public
offering price set forth in the applicable Pricing Supplement less the
applicable concession, expressed as a percentage of the principal amount of
the Notes. Unless otherwise specified in the applicable Pricing Supplement,
such concession allowed to any dealer will not be in excess of 66 2/3% of the
discount to be received by the Agent from the Company. In connection with the
purchase of Notes by any Agent as underwriter, such Agent may use a selling
group and may reallow any portion of the discount or commission payable to
such Agent to other dealers or purchasers. The offering price and other
selling terms for such resales may from time to time be varied by such Agent.
The Company also has agreed to reimburse the Agent for certain expenses.
The Company will have the sole right to accept offers to purchase Notes in
whole or in part. Each Agent will have the right, in its discretion reasonably
exercised, to reject any offer to purchase Notes received by it in whole or in
part. The Company reserves the right to withdraw, cancel or modify the offer
made hereby without notice.
The Notes will not have an established trading market when issued. The Notes
will not be listed on any securities exchange. Each Agent may make a market in
the Notes, but such Agent is not obligated to do so and may discontinue any
market-making at any time without notice. There can be no assurance as to the
existence or liquidity of any secondary market for any Notes, or that the
Notes will be sold.
The Agents and affiliates thereof engage in transactions with and perform
services for the Company and its affiliates in the ordinary course of
business.
The Company has agreed to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Act"), or to contribute to payments such Agent may be required
to make in respect thereof. Each Agent may be deemed to be an "underwriter"
within the meaning of the Act with respect to Notes sold through it.
S-4
<PAGE>
$200,000,000
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS
MEDIUM-TERM NOTES
(SERIES OF FIRST MORTGAGE BONDS)
Central Illinois Public Service Company (the "Company") may offer from time
to time, in one or more series, not more than $200,000,000 in aggregate
principal amount of the following securities, at prices and on terms to be
determined at or prior to the time or times of sale: (i) First Mortgage Bonds
(the "Bonds"), and (ii) Medium-Term Notes, as series of First Mortgage Bonds
(the "Notes") (the Bonds and the Notes are herein collectively called the
"Debt Securities").
The specific terms of each series of the Debt Securities, together with the
terms of the offering of such series, will be set forth in an accompanying
prospectus supplement and, in the case of the Notes, a pricing supplement
(collectively, a "Prospectus Supplement"). The applicable Prospectus
Supplement will set forth with regard to the particular Debt Securities being
offered (the "Offered Securities"), without limitation, the designation or
designations, aggregate principal amount, maturity or maturities, rate or
rates of interest, times of payment of interest, any sinking fund or other
redemption terms and any other special terms of such Offered Securities.
The Debt Securities will be represented either by global securities
registered in the name of a nominee of The Depository Trust Company ("DTC"),
as depository (the "Depository"), or by securities in certificated form issued
to the registered owners thereof, as set forth in the applicable Prospectus
Supplement. Interests in any global securities will be shown on, and transfers
thereof will be effected only through, records maintained by the Depository
(with respect to its participants' interests) and by its participants or
persons that hold through such participants (with respect to the interest of
persons other than such participants). Except in the circumstances described
herein, certificated securities will not be issued in exchange for global
securities.
For further information relating to the Debt Securities, see "Description of
Debt Securities" and "Book-Entry System" herein and the applicable Prospectus
Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The Company may sell the Debt Securities to or through underwriters, dealers
or agents or directly to one or more purchasers. The applicable Prospectus
Supplement will set forth the names of any underwriters, dealers or agents
involved in the distribution of the Offered Securities, any applicable
commissions, discounts or allowances, the net proceeds to the Company, or the
means of determining the same, from any such sale and any initial public
offering price. See "Plan of Distribution" for possible indemnification
arrangements for underwriters, dealers, agents and purchasers.
----------------
THE DATE OF THIS PROSPECTUS IS MARCH 18, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company may be inspected and copied, at prescribed rates, at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at its regional offices located at 500 West
Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants, like the Company, who file electronically with the Commission.
The address of the Commission's web site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Debt Securities. This Prospectus does not contain all of the
information set forth in such Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
Reference is made to such Registration Statement and the exhibits thereto for
further information with respect to the Company and the Debt Securities. The
Company is not required to, and does not, provide annual reports to holders of
its debt securities unless specifically requested by a holder.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1996 (the "1996 Form 10-K") and its Current Report on Form 8-K dated January
31, 1997, heretofore filed by the Company with the Commission pursuant to the
Exchange Act, are incorporated herein by reference.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering or offerings made by this Prospectus
shall be deemed to be incorporated in this Prospectus by reference and to be a
part hereof from the respective dates of filing of such documents. Any
statement contained in a document incorporated by reference in this Prospectus
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement in this Prospectus or in any other subsequently
filed document which also is or is deemed to be incorporated by reference in
this Prospectus modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents that have been
or may be incorporated in this Prospectus by reference, other than certain
exhibits to such documents that have not been specifically incorporated by
reference herein. Requests should be directed to R.C. Porter, Treasurer,
Central Illinois Public Service Company, 607 East Adams Street, Springfield,
Illinois 62739,217/523-3600.
----------------
2
<PAGE>
SELECTED INFORMATION
The following information is qualified in its entirety by the detailed
information and the financial statements and notes appearing elsewhere in this
Prospectus or in the documents incorporated in this Prospectus by reference.
THE OFFERING
Securities Offered.......... $200,000,000 aggregate amount of First Mortgage
Bonds and Medium-Term Notes (series of First
Mortgage Bonds)
Use of Proceeds............. To redeem, refund, refinance, purchase or pay at
maturity certain indebtedness of the Company and
for general corporate purposes as described under
"Use of Proceeds" herein.
THE COMPANY
<TABLE>
<C> <S>
Business......................... Electric and gas utility
Service area..................... Portions of central and southern Illinois
Estimated Population of Service
Area............................ 820,000
Revenue Sources for 1996......... 82% Electric and 18% Gas
Sources of KWH Generation for
1996............................ More than 99% coal and less than 1% oil
Estimated 1997-2001 Construction
Expenditures.................... $482 million
Estimated 1997-2001 Environmental
Expenditures (including Clean
Air Act Amendments)............. $28 million
</TABLE>
CERTAIN FINANCIAL INFORMATION OF THE COMPANY
(DOLLARS IN THOUSANDS)
SELECTED INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Operating Revenues.................................. $835,882 $833,119 $886,186
Income Before Interest Charges...................... 114,824 104,282 114,664
Net Income.......................................... 81,913 70,631 77,393
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing earnings by
fixed charges before income taxes. For the purposes of such computations (i)
earnings consist of net income plus fixed charges and income taxes and (ii)
fixed charges consist of interest on long-term debt, net of amortization of
debt discount, premium and expense, interest on provision for revenue refunds
and other interest charges.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..................... 4.12 4.82 4.93 4.41 4.30
</TABLE>
3
<PAGE>
THE COMPANY
The Company was organized in 1902 under the laws of the State of Illinois.
The Company is a public utility operating company engaged in the sale of
electricity and natural gas in portions of central and southern Illinois. The
Company generates, transmits and distributes electricity and, through
interchange agreements with other utility systems, purchases and sells power
on a firm basis, in emergency situations or when economical to do so. The
Company sells natural gas, which it purchases from suppliers and distributes
in various parts of the territory served, and transports natural gas purchased
by end-users directly from suppliers. CIPSCO Incorporated ("CIPSCO") is
currently the owner of all of the outstanding Common Stock of the Company.
CIPSCO and Union Electric Company ("Union Electric") entered into a Merger
Agreement dated August 11, 1995 (the "Merger Agreement"). As a result of a
series of mergers provided for in the Merger Agreement, the Company and Union
Electric will each become a subsidiary of a new registered holding company
under the Public Utility Holding Company Act of 1935 (the "Holding Company
Act"). The Merger Agreement was approved by shareholders of both parties in
December 1995. Consummation of the mergers and related transactions
contemplated by the Merger Agreement (the "Mergers") is conditioned on, among
other things, receipt of regulatory and governmental approvals, including
approval of the Illinois Commerce Commission, the Missouri Public Service
Commission, the Federal Energy Regulatory Commission, the Nuclear Regulatory
Commission and the Commission under the Holding Company Act. The Company
cannot predict when all necessary approvals will be obtained, but it is
expected that the Mergers will be consummated by the end of 1997. As a
subsidiary of a registered holding company, the approval of the Commission
under the Holding Company Act will be required, subject to limited exceptions,
for the Company to (i) issue securities, (ii) acquire utility assets from a
third person, (iii) acquire the stock of another public utility, (iv) amend
its articles of incorporation, or (v) acquire stock, extend credit, pay
dividends, lend money or invest in any manner in any other businesses. In
addition, certain transactions between the Company and its affiliates would be
required to comply with applicable rules under the Holding Company Act.
Notwithstanding the Mergers, indebtedness of the Company outstanding at the
effectiveness of the Mergers (including any Offered Securities) would remain
outstanding as indebtedness of the Company. Additional information concerning
the Mergers, is included in the periodic and current reports filed by the
Company with the Commission and that are incorporated by reference herein.
The principal executive offices of the Company are located at 607 East Adams
Street, Springfield, Illinois 62739, and its telephone number is 217/523-3600.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Debt
Securities will be used (i) in connection with the payment at maturity or the
redemption, refunding, refinancing or purchase of certain outstanding long-
term debt, including without limitation, bank borrowings and first mortgage
bonds of the Company (the "Prior Debt") and (ii) for general corporate
purposes (including payment of short-term debt incurred to finance
construction expenditures, for payments associated with coal supply contract
modifications and for issuance costs). The specific allocation of the net
proceeds of a particular series of Offered Securities and information relating
to the particular Prior Debt, if any, to be paid at maturity, redeemed,
refunded, refinanced or purchased will be described in the Prospectus
Supplement related thereto. Any Prior Debt consisting of first mortgage bonds
that is purchased will be purchased at a price not in excess of the then-
current redemption price applicable to such first mortgage bonds. In case of
the redemption, refunding or purchase of Prior Debt consisting of first
mortgage bonds, proceeds of the Offered Securities may be applied to pay any
redemption premium or purchase price in excess of the principal amount.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued as one or more additional series under,
and secured by, the Indenture of Mortgage or Deed of Trust dated October 1,
1941, as amended and supplemented, and as to be further amended
4
<PAGE>
by one or more supplemental indentures (each a "Supplemental Indenture") to be
entered into in connection with each series of Debt Securities, between the
Company and First Trust National Association, Chicago, Illinois, as successor
trustee (the "Trustee") and an individual successor Co-Trustee (collectively,
the "Trustees"). Said Indenture of Mortgage or Deed of Trust, as amended and
supplemented, and each Supplemental Indenture, copies of which are filed as
exhibits to the Registration Statement (and are incorporated herein by
reference), are herein called the "Indenture."
The following statements, unless the context otherwise indicates, are brief
summaries of the substance or general effect of certain provisions of the
Indenture. The statements make use of defined terms and are not complete; they
are subject to all the provisions of the Indenture and are qualified in their
entirety by reference to the Indenture.
GENERAL
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the Offered Securities: (1) the
designation or designations and the principal amount or amounts; (2) the date
or dates on which the principal shall be payable; (3) the rate or rates (or
method of calculation) at which the Offered Securities shall bear interest,
the date or dates from which such interest shall accrue and the dates on which
such interest shall be payable; (4) the price or prices at which, the period
or periods within which and the terms and conditions upon which the Offered
Securities may be redeemed at the option of the Company; and (5) the price or
prices at which, the period or periods within which and the terms and
conditions upon which the Offered Securities shall be redeemed pursuant to any
mandatory or optional sinking or debt retirement fund. The holders of the
outstanding first mortgage bonds do not have the right to tender such first
mortgage bonds to the Company for repurchase upon the Company becoming
involved in a highly leveraged or change in control transaction, and the
Company does not currently intend to afford the holders of the Debt Securities
such a right.
Principal of and interest on the Debt Securities will be payable in Chicago,
Illinois, or New York, New York and interest is payable, at the option of the
Company, by check mailed to the registered owners of the Debt Securities. The
Debt Securities of each series may be issued in fully registered form without
coupons in denominations of $1,000 each or any integral multiple thereof or by
a global security registered in the name of the Depository. Transfers and
exchanges of Debt Securities for other registered Debt Securities will be made
without charge other than for any taxes or other government charges. The
Company will not be required (a) to issue, register, transfer or exchange Debt
Securities of a particular series and maturity during a period beginning at
the opening of business on the tenth business day next preceding any selection
of Debt Securities of such series and maturity to be redeemed and ending at
the close of business on the day on which the applicable notice of redemption
is given, (b) to register, transfer or exchange any Debt Securities selected,
called or being called for redemption in whole or in part or (c) to transfer,
exchange or register Debt Securities of a particular series and maturity
during the 10 days next preceding an interest payment date applicable to such
Debt Securities.
At December 31, 1996, the Company had outstanding $299,000,000 in principal
amount of first mortgage bonds issued under the Indenture. Debt Securities may
be authenticated against an equivalent principal amount of first mortgage
bonds previously issued under the Indenture and/or against net expenditures
for bondable property, which aggregated not less than $1,205,000,000 on
December 31, 1996. See "Issuance of Additional Debt Securities" below. For the
five years ended December 31, 1996, gross additions to the utility properties
of the Company aggregated approximately $520,905,000. Gross retirements for
such period were approximately $221,624,000.
DEBT RETIREMENT
Except as expressly set forth in any Prospectus Supplement relating to the
Offered Securities, the Debt Securities will not be entitled to any covenant
providing for the retirement or amortization of Debt Securities outstanding or
for the certification of expenditures for bondable property in lieu of such
retirement. However, with respect to the Company's first mortgage bonds,
Series L, due May 1, 1997 (the "Series L Bonds"), the
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Indenture provides that during each calendar year the Company will retire, or
pay the Trustee cash sufficient to redeem, 1% of the amount of the Series L
Bonds then outstanding; or, in lieu thereof, certify to the Trustee $1,666.67
of net expenditures for bondable property on which the Indenture is a first
mortgage lien, for each $1,000 of Series L Bonds otherwise required to be
retired. Unapplied net expenditures for bondable property and unapplied excess
retirements of Series L Bonds made in prior years may be used to satisfy the
foregoing provisions for the Series L Bonds.
MAINTENANCE AND RENEWAL
The Indenture provides that so long as any first mortgage bonds, including
the Debt Securities, are outstanding, the Company will expend during each
calendar year, and certify to the Trustees, an amount equal to 15% of its
utility operating revenues for such year (after deducting from such revenues
the cost of electricity and gas purchased for resale) for (1) the maintenance
and repair of its mortgaged utility properties, (2) bondable property on which
the Indenture is a first mortgage lien and/or (3) the retirement of the
Company's first mortgage bonds (including any Debt Securities) of any series
heretofore or hereafter issued under the Indenture. In lieu of such
requirement, the Company may pay to the Trustees, in cash, any deficiency in
the amount required to be so expended, after deducting any unapplied excess
expenditures previously made for any of such purposes. Any such cash may be
applied to the retirement, through purchase, payment or redemption, of the
Company's first mortgage bonds (including any Debt Securities) (such
retirement by redemption to be only if the Debt Securities or such first
mortgage bonds are otherwise redeemable) or be withdrawn by the Company to the
extent of 100% of either gross or net expenditures for bondable property on
which the Indenture is a first mortgage lien.
The Indenture also provides that (i) the Company shall maintain the
mortgaged properties in good repair and working order, (ii) the Trustee may,
and if requested by holders of a majority in principal amount of all
outstanding first mortgage bonds and furnished with the necessary funds
therefor shall, cause such properties to be inspected by an independent
engineer (not more often than at five-year intervals) to determine whether
they have been so maintained and whether any property, not retired on the
Company's books, should be so classified for the purpose of computing net
expenditures for bondable property or otherwise and (iii) the Company shall
make good any deficiency in maintenance disclosed by such engineer's report as
rendered or as modified by arbitration.
SECURITY
The Debt Securities will be secured by the lien of the Indenture and will
rank equally with all the Company's first mortgage bonds at any time
outstanding under and secured by the Indenture, except as to differences
between series permitted by the Indenture and not affecting the rank of the
lien thereof. In the opinion of Sorling, Northrup, Hanna, Cullen & Cochran,
Ltd., Springfield, Illinois, counsel for the Company, the Indenture
constitutes a first mortgage lien, subject only to permitted encumbrances and
liens, on all or substantially all the permanent fixed properties (other than
excepted property) now owned by the Company. The Indenture contains provisions
subjecting after-acquired property, other than excepted property, to the lien
thereof. Such provisions might not be effective as to proceeds, products,
rents, issues or profits of property subject to the lien of the Indenture
realized, and additional property acquired, within 90 days prior and
subsequent to the filing of a case with respect to the Company under the
United States Bankruptcy Code, state insolvency laws or other similar laws
affecting the enforcement of creditor's rights. The Indenture excepts or
excludes from the lien thereof all cash, securities, accounts and bills
receivable, choses in action and certain judgments not deposited or pledged
with the Trustees, all personal property held for sale, lease, rental or
consumption in the ordinary course of business, the last day of each term
under any lease of property, all gas, oil and other minerals under any
property subject thereto, and certain real estate described therein.
ISSUANCE OF ADDITIONAL DEBT SECURITIES
The Indenture does not fix an overall dollar limitation on the aggregate
principal amount of all first mortgage bonds that may be issued or outstanding
thereunder. First mortgage bonds may be issued from time to time under
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the Indenture in a principal amount equal to: (a) 60% of eligible net
expenditures made by the Company for bondable property constructed or acquired
by it and on which the Indenture is a first mortgage lien, subject only to
permitted encumbrances and liens and prepaid liens, (b) the principal amount
of previously authenticated first mortgage bonds which have been retired or
for the retirement of which the Trustee holds the necessary funds, other than
certain first mortgage bonds not usable for the purpose under the terms of the
Indenture, and (c) the amount of money deposited with the Trustee for the
purpose, which money may be applied to the retirement of bonds or may be
withdrawn in lieu of the authentication of an equivalent principal amount of
first mortgage bonds under the Indenture provisions referred to in clauses (a)
and (b). Upon the retirement of certain series of first mortgage bonds, any
bonds of such series and any net expenditures for bondable property used or
applied to satisfy the debt retirement provisions applicable to such series
may be used as the basis for the authentication of additional first mortgage
bonds under the Indenture. Net expenditures for bondable property are
determined as provided in the Indenture. In general, bondable property means
any utility plant, property or equipment owned by the Company on January 1,
1941 or constructed or otherwise acquired by it on or after that date and used
or useful in its utility business. The Company owns and operates only electric
and gas utility properties.
No additional first mortgage bonds may be authenticated under the Indenture
provisions referred to in clauses (a) and (c) above, or authenticated as
provided in clause (b) above if such additional first mortgage bonds are
issued more than five years prior to the maturity of such previously
authenticated bonds and bear interest at a higher rate than such previously
authenticated bonds, unless the Company's net earnings (as described below)
for a 12-month period ending within 90 days next preceding such authentication
were at least equal to twice the interest for one year on (1) all first
mortgage bonds to be outstanding under the Indenture immediately after such
authentication, other than first mortgage bonds for the retirement of which
the Trustees hold the necessary funds and (2) all other indebtedness then
secured by a lien equal or prior to the Indenture on property of the Company,
with certain exceptions.
"Net earnings" of the Company for any period means, presently, the earnings
of the Company, computed in accordance with accepted principles of accounting
and determined by deducting from the Company's total gross earnings and income
for the period, all its operating expenses for the period, including
maintenance, repairs, rentals, insurance, taxes on income and other taxes,
depreciation, retirements, renewals and replacements, but not amortization,
all as provided in the Indenture. The Supplemental Indenture dated December 1,
1973 amended the foregoing definition of "net earnings" to require the
deduction, in computing such net earnings, of all taxes other than income
taxes (instead of all taxes, including income taxes). The definition of "net
earnings" as it read immediately prior to the amendment thereof will remain in
effect, and said definition as amended will not become effective and
operative, until all the Series L Bonds outstanding under the Indenture shall
have been retired or all the holders thereof shall have consented to said
amendment. Holders of all first mortgage bonds issued or to be issued on or
subsequent to December 1, 1973 (including the Debt Securities) will be bound
by the amended definition of "net earnings" when it becomes effective and
operative.
ACQUISITION OF PROPERTY SUBJECT TO A PRIOR LIEN
The Indenture presently provides that, so long as the Series L Bonds are
outstanding, the Company will not acquire any property of a value in excess of
$1,000,000 which at the time of acquisition is subject to a lien equal or
prior to the Indenture (other than permitted encumbrances and liens and
prepaid liens) unless, at that time, (a) the principal amount of all
outstanding obligations secured by such equal or prior lien shall not exceed
60% of the fair value of any bondable property so acquired and (b) the net
earnings of such property during a 12-month period ending within 90 days next
preceding such acquisition were at least equal to twice the annual interest
charge on such obligations, except any of such obligations for the retirement
of which the necessary funds are deposited under such lien or with the
Trustee. The foregoing covenant will be extended to Offered Debt Securities
only to the extent specified in the accompanying Prospectus Supplement and
only as amended as described below. The Supplemental Indenture dated May 15,
1992 amended the Indenture to provide that upon the effectiveness of such
amendment as described below the dollar amount referred to above shall be the
lesser of (i) $25,000,000 or (ii) 10 percent of utility plant, less
accumulated depreciation, of the Company at the time of acquisition, but in no
event less than $1,000,000. Such amendment will be effective upon the
retirement or
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with the consent of the holders of all the Series L Bonds. Holders of all
first mortgage bonds issued or to be issued on or subsequent to May 15, 1992
(including the Debt Securities) will likewise be bound by the foregoing
amendment when it becomes effective as described.
LIMITATIONS ON COMMON STOCK DIVIDENDS
The Indenture provides in effect that, so long as any first mortgage bonds
of all prior series are outstanding, the Company will not declare or pay any
dividends on its Common Stock (other than in stock), or make any other
distribution on or purchase any of its Common Stock, unless, for the period
beginning January 1, 1941 to the date of such payment, distribution or
purchase, the total amount charged or provided by the Company for maintenance
and repairs and provided for depreciation of properties subject to the lien of
the Indenture, plus the earned surplus (retained earnings) of the Company
earned during such period and remaining after any such payment, distribution
or purchase, shall aggregate not less than 15% of the Company's total utility
operating revenues for the period, after deducting from such revenues the cost
of electricity and gas purchased for exchange or resale. For the period
January 1, 1941 to December 31, 1996, the total of the amounts so expended and
provided by the Company for such maintenance, repairs and depreciation, plus
the undistributed earned surplus accumulated during the period, aggregated
about 22.8% of such revenues and, exclusive of such earned surplus, aggregated
about 19.5% of such revenues. First mortgage bonds (including the Debt
Securities) may be issued in the future which are entitled to the benefits of
more stringent or less stringent covenants with respect to payments of
dividends by the Company, or may be entitled to no such covenants. The
foregoing covenant will be extended to Offered Securities only to the extent
specified in the accompanying Prospectus Supplement.
MODIFICATION OF INDENTURE
The terms and provisions of the Indenture may be modified or amended from
time to time by a supplemental indenture executed by the Company and the
Trustees and without the consent of bondholders, for any one or more of the
purposes provided in the Indenture. Such purposes include, among others, (1)
any change or modification of any of the terms or conditions of the Indenture,
provided that such change or modification would not adversely affect the first
mortgage bonds then outstanding and is made effective only with respect to
first mortgage bonds authenticated after the execution of such supplemental
indenture and (2) any other change or modification of such terms or conditions
which is not inconsistent with the terms, and which shall not impair the
security, of the Indenture.
By Supplemental Indenture dated May 15, 1992, the Indenture was amended,
effective upon the retirement or with the consent of the holders of all of the
Series L Bonds, to provide that the Indenture may be amended in any respect
with the consent of the holders of not less than 51%, in principal amount of
all first mortgage bonds of all series then outstanding that would be affected
thereby, except that, without the consent of the holder of each outstanding
first mortgage bond affected thereby, no such amendment shall, among other
things, (i) extend the time or times or otherwise affect the terms of payment
of the principal, interest or premium in respect of any first mortgage bond,
or reduce the principal amount of any first mortgage bond or any premium
thereon or the rate of interest thereon, (ii) impair the right of any
bondholder to institute suit for the enforcement of any such payment in
respect of its first mortgage bonds, (iii) permit the creation of any lien
ranking prior to, or on a parity with, the lien of the Indenture, other than
permitted encumbrances and liens or prepaid liens, (iv) deprive any
nonassenting bondholder of a lien on the mortgaged property for the security
of the bondholder's first mortgage bonds or (v) reduce the percentage in
principal amount of first mortgage bonds, the consent of the holders of which
is required for any such amendment. Holders of all first mortgage bonds issued
or to be issued on or subsequent to May 15, 1992 (including the Debt
Securities) will likewise be bound by the foregoing amendment when it becomes
effective as described.
OTHER INDENTURE PROVISIONS
Holders of a majority in principal amount of the first mortgage bonds
secured by the Indenture have the right to direct the time, method and place
of conducting proceedings for remedies available to, or exercising any
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trust or power of, the Trustees. However, the Trustees may decline to follow
such directions in certain circumstances specified in the Indenture; the
Trustees are not required to exercise powers of entry or sale under the
Indenture; and the Trustees are entitled to be indemnified against
expenditures incurred in connection with taking any directed action or
proceeding.
A "default" or an "event of default" under the Indenture means: (a) failure
to pay the principal of any first mortgage bond when due at maturity or
otherwise; (b) failure to pay first mortgage bond interest within 60 days
after its due date; (c) failure to pay the principal of, or interest on, any
prior lien bond, continued beyond the grace period (if any) specified in the
lien securing such bond; (d) failure of the Company for 90 days after written
demand to comply with any other covenant or condition in the Indenture or in
any first mortgage bond or any prior lien bond or lien; or (e) certain events
relating to bankruptcy, insolvency, assignment or receivership. The Trustees
are required to give notice to bondholders of defaults known to the Trustees,
within 90 days after the occurrence thereof; provided that the Trustees may
withhold giving notice to bondholders of defaults (other than any default in
payment of interest, principal or sinking or purchase fund installment in
respect of any first mortgage bond) if the Trustees determine in good faith
that such withholding is in the interest of the bondholders. Upon default, the
Trustees may, among other remedies, and upon written notice from the holders
of a majority in principal amount of first mortgage bonds then outstanding
under the Indenture shall, declare the principal of all first mortgage bonds
to be immediately due and payable. Upon certain terms and conditions, the
declaration of acceleration may be rescinded and waived.
The Company is required to furnish to the Trustee certificates of officers
and engineers and, in certain cases, of accountants in connection with the
authentication of first mortgage bonds, withdrawal of money, release of
property and other matters, and opinions of counsel as to the lien of the
Indenture and other matters. The Company also is required to furnish to the
Trustee, not less frequently than annually, a certificate as to the Company's
compliance with all the conditions and covenants under the Indenture,
including the satisfaction of the maintenance and renewal, and the debt
retirement, provisions of the Indenture and an opinion of counsel with respect
to the lien of the Indenture.
BOOK-ENTRY SYSTEM
The Debt Securities, at the option of the Company, may be issued as either
securities in certificated form or global securities. If, as described in the
applicable Prospectus Supplement, the Company elects to use a book-entry
system with respect to any Offered Securities, upon issuance, all Debt
Securities having the same issuance date, maturity date, redemption provisions
and interest rate or rates will be represented by one fully-registered global
security (the "Global Security"). The Global Security will be deposited with,
or on behalf of, the Depository, and registered in the name of the Depository
or a nominee of the Depository.
So long as the Depository, or its nominee, is the registered owner of a
Global Security, such Depository or such nominee, as the case may be, will be
considered the owner of such Global Security for all purposes, including any
notices and voting. Except in the circumstances described below, the owners of
beneficial interests in a Global Security will not be entitled to have any
individual Debt Securities registered in their names, will not receive or be
entitled to receive physical delivery of any such Debt Securities and will not
be considered the owners of Debt Securities under the Indenture. Accordingly,
each person holding a beneficial interest in a Global Security must rely on
the procedures of the Depository and, if such person is not a Direct
Participant (as herein defined), on procedures of the Direct Participant
through which such person holds its interest, to exercise any of the rights of
a registered owner of such Debt Security.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed, the Company will issue
individual securities in certificated form ("Certificated Securities") in
exchange for the Global Security or Global Securities representing the
corresponding book-entry Debt Securities represented by one or more Global
Securities and, in such event, will issue Certificated Securities in exchange
for the Global Securities representing the corresponding book-entry Debt
Securities. Further, in such event, an
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owner of a beneficial interest in a Global Security representing book-entry
Debt Securities may, on terms acceptable to the Company and the Depository for
such Global Security, receive such book-entry Debt Securities as Certificated
Securities. In any such instance, an owner of a beneficial interest in a
Global Security representing book-entry Debt Securities will be entitled to
physical delivery of individual Certificated Securities equal in principal
amount to such beneficial interest and to have such Certificated Securities
registered in the name of such owner. Certificated Debt Securities will be
issued as registered book-entry Debt Securities in denominations, of $1,000
unless otherwise specified in a Prospectus Supplement.
The following is based solely on information furnished by DTC:
DTC will act as securities depository for the Global Securities. The Global
Securities will be issued as fully-registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully-registered Global
Security certificate will be issued for each issue of the Global Securities,
each in the aggregate principal amount of such issue and will be deposited
with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing corporation"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks, and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable
to DTC and its Participants are on file with the Commission.
Purchases of Global Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for such purchases of
Global Securities on DTC's records. The ownership interest of each actual
purchaser of each Global Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Global
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Global Securities,
except in the event that use of the book-entry system for the Global
Securities is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Global Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Global Securities are credited which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
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If the Global Securities are redeemable, redemption notices shall be sent to
Cede & Co. If less than all of the Global Securities are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Global
Securities. Under its usual procedures, DTC mails an omnibus proxy to the
Company as soon as possible after the record date. The omnibus proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants whose
accounts the Global Securities are credited on the record date (identified in
a listing attached to the omnibus proxy).
Principal and interest payments or dividends on the Global Securities will
be made to DTC. DTC's practice is to credit Direct Participants' accounts on
the date on which interest or a dividend is payable in accordance with the
respective holdings shown on DTC's records, unless DTC has reason to believe
that it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name," and will be the responsibility
of such Participant and not of DTC, the Trustee, or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal and interest on Debt Securities represented by
Global Securities to DTC is the responsibility of the Company and the Trustee.
Disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Global Securities at any time by giving reasonable notice to
the Company and, if applicable, the Trustee. Under such circumstances, in the
event that a successor securities depository is not obtained, Debt Securities
in certificated form are required to be printed and delivered. The Company may
decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Debt Securities in
certificated form are required to be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
The underwriters, dealers or agents of any Offered Securities may be Direct
Participants of DTC.
NONE OF THE COMPANY, THE TRUSTEE, OR ANY AGENT FOR PAYMENT ON OR
REGISTRATION OF TRANSFER OR EXCHANGE OF ANY GLOBAL SECURITY WILL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS RELATING TO OR
PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN SUCH GLOBAL SECURITY OR
FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO SUCH
BENEFICIAL INTERESTS.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers; (ii) directly to one or more institutional purchasers; or (iii)
through agents. The Prospectus Supplement with respect to each series of
Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters, the purchase
price of such Offered Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial offering price and any discounts, commissions or
concessions allowed or reallowed or paid to dealers. Any initial offering
price and any discounts, concessions or commissions allowed or reallowed or
paid to dealers may be changed from time to time.
If underwriters are used in an offering, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions,
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at a fixed public offering price or at varying prices determined at the time
of sale. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. The specific managing underwriter or
underwriters, if any, will be named in the Prospectus Supplement relating to
the particular Offered Securities together with the members of the
underwriting syndicate, if any. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the particular
Offered Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all such Offered Securities if any
are purchased.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. The Prospectus Supplement will
set forth the name of any agent involved in the offer or sale of the Offered
Securities in respect of which the Prospectus Supplement is delivered and any
commissions payable by the Company to such agent. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Any underwriters, dealers or agents participating in the distribution of the
Offered Securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of the Offered Securities
may be deemed to be underwriting discounts and commissions under the
Securities Act. Agents, dealers and underwriters may be entitled, under
agreements entered into with the Company, to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act,
and to contribution with respect to payments which the agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may engage in transactions with or perform services for the
Company in the ordinary course of business.
Unless otherwise specified in a Prospectus Supplement, the Offered
Securities will not be listed on a national securities exchange. No assurance
can be given that any broker-dealer will make a market in any series of
Offered Securities, and, in any event, no assurance can be given as to the
liquidity of the trading market for any of the Offered Securities. The
Prospectus Supplement will state, if known, whether or not any broker-dealer
intends to make a market in the Offered Securities. If no such determination
has been made, the Prospectus Supplement will so state.
LEGAL OPINIONS
The validity of the Debt Securities will be passed upon for the Company by
Jones, Day, Reavis & Pogue, 77 West Wacker Drive, Chicago, Illinois 60601-
1692. Certain legal matters will be passed upon for any underwriters, dealers,
purchasers or agents by Gardner, Carton & Douglas, Quaker Tower, 321 North
Clark Street, Chicago, Illinois 60610-4795.
The statements as to matters of law or legal conclusions with respect to the
jurisdiction of certain regulatory commissions expressed under Item 1,
Business--Regulation in the 1996 Form 10-K have been prepared or reviewed by
Jones, Day, Reavis & Pogue. The statements as to matters of law or legal
conclusions expressed under the caption "Description of Debt Securities--
Security" in this Prospectus have been prepared or reviewed by Sorling,
Northrup, Hanna, Cullen & Cochran, Ltd. Such statements are made upon the
authority of such counsel, who have given their opinions that such statements
as to such matters are correct.
EXPERTS
The audited financial statements of the Company, as of December 31, 1996 and
1995 and for each of the three years in the period ended December 31, 1996
included in the 1996 Form 10-K and incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL CREATE, UNDER ANY CIRCUMSTANCES, ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of First Mortgage Bonds, Medium-Term Note Series............... S-2
Plan of Distribution of Notes.............................................. S-4
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
Selected Information....................................................... 3
The Company................................................................ 4
Use of Proceeds............................................................ 4
Description of Debt Securities............................................. 4
Book-Entry System.......................................................... 9
Plan of Distribution....................................................... 11
Legal Opinions............................................................. 12
Experts.................................................................... 12
</TABLE>
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$125,000,000
CENTRAL ILLINOIS
PUBLIC SERVICE
COMPANY
FIRST MORTGAGE BONDS,
MEDIUM-TERM NOTE SERIES
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PROSPECTUS SUPPLEMENT
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SMITH BARNEY INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
MORGAN STANLEY & CO.
INCORPORATED
Dated March 18, 1997
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