<PAGE> 1
Filed Pursuant to Rule 424(b)2
Registration Number 333-02895
PROSPECTUS DATED DECEMBER 12, 1996
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<S> <C>
PROSPECTUS [CLECO LOGO]
$200,000,000
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
MEDIUM-TERM NOTES
DUE MORE THAN ONE YEAR FROM DATE OF ISSUE
Central Louisiana Electric Company, Inc. (the "Company") may offer from time to
time a maximum of $200,000,000 aggregate principal amount of medium-term notes
on terms to be determined at the time or times of sale. For each offering of
medium-term notes for which this Prospectus is being delivered (the "Medium-Term
Notes") there will be a pricing supplement (each a "Pricing Supplement") that
will set forth the specific designation, aggregate principal amount, maturity or
maturities, rate or rates and times of payment of interest, if any, any
redemption terms or repayment provisions and any other special terms of the
Medium-Term Notes. Each Medium-Term Note will bear interest at a fixed or
variable rate or will be in zero-coupon form, in each case as specified in a
Pricing Supplement to be delivered with this Prospectus to the purchaser of any
such Medium-Term Note. The interest payment dates for each interest-bearing
Medium-Term Note will be March 15 and September 15 of each year. Each
Medium-Term Note will mature more than one year from its date of issue (the
"Stated Maturity"), as set forth in the applicable Pricing Supplement. Each
issuance of the Medium-Term Notes may be subject to redemption prior to maturity
at the option of the Company or any holder thereof, in each case, in whole or in
part, prior to the Stated Maturity, as set forth and specified in the applicable
Pricing Supplement. See "Description of the Medium-Term Notes" for a more
complete description of the terms and provisions of the Medium-Term Notes.
Each Medium-Term Note will be issued in fully registered form and will be
represented by a global certificate (a "Book-Entry Note") registered in the name
of a nominee of The Depository Trust Company or other depositary (the
"Depositary"). Beneficial interests in Medium-Term Notes represented by a global
security will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary (with respect to participants' interests)
and its participants. See "Description of the Medium-Term Notes -- Book-Entry
Notes."
The Medium-Term Notes will be issued in minimum denominations of $1,000 or in
any amount in excess thereof that is an integral multiple of $1,000.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE MEDIUM-TERM NOTES
UNLESS ACCOMPANIED BY A PRICING SUPPLEMENT.
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 THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC (1) COMMISSION(2)(3) COMPANY(2)(3)(4)
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Per Medium-Term Note......................... 100.000% .125%-.750% 99.875%-99.250%
Total........................................ $200,000,000 $250,000-$1,500,000 $199,750,000-$198,500,000
</TABLE>
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(1) Unless otherwise specified in a Pricing Supplement, Medium-Term Notes will
be issued at 100% of their principal amount.
(2) The Company has agreed to indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933.
(3) In the case of Medium-Term Notes sold directly by the Company to investors
or other purchasers (other than agents), no discount will be allowed or
commission paid. In the case of any Medium-Term Notes with a maturity in
excess of 30 years, the commission will be agreed upon between the Company
and the Agents at the time of sale and may exceed .750% per Medium-Term
Note.
(4) Before deducting expenses payable by the Company estimated at $315,966.
The Medium-Term Notes are being offered on a continuous basis by the Company
through Salomon Brothers Inc, First Chicago Capital Markets, Inc., Merrill Lynch
& Co. and Smith Barney Inc. (collectively, the "Agents"), each of whom has
agreed to use its reasonable efforts to solicit offers to purchase the
Medium-Term Notes. The Medium-Term Notes may be sold to any Agent, as principal,
at a discount for resale to investors or other purchasers at varying prices
related to prevailing market prices at the time of resale, to be determined by
such Agent or, if agreed, at a fixed public offering price. The Company also may
sell the Medium-Term Notes directly to investors or other purchasers on its own
behalf. The Notes will not be listed on any securities exchange, and there can
be no assurance that the Medium-Term Notes offered by this Prospectus will be
sold or that there will be a secondary market for any of the Medium-Term Notes.
The Company reserves the right to withdraw, cancel or modify the offer or
solicitation of offers made hereby without notice. An offer may be rejected in
whole or in part by the Company or by the Agent, if any, that solicited such
offer. See "Plan of Distribution."
SALOMON BROTHERS INC
FIRST CHICAGO CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
The date of this Prospectus is December 12, 1996.
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IN CONNECTION WITH ANY OFFERING OF MEDIUM-TERM NOTES, ANY UNDERWRITER MAY, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, OVER-ALLOT OR EFFECT TRANSACTIONS THAT
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the Commission's regional offices
located at Seven World Trade Center, New York, New York 10048, and at the
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The
Company's common stock, par value $2.00 per share (the "Common Stock"), is
listed for trading on the New York Stock Exchange (the "NYSE") and the Pacific
Stock Exchange (the "PSE"), and such reports, proxy statements and other
information should be available for inspection at the offices of the NYSE, 20
Broad Street, New York, New York 10005 and the offices of the PSE, 301 Pine
Street, San Francisco, California 94104.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement"), filed by the Company with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Medium-Term
Notes offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information contained in the
Registration Statement, and reference is made to the Registration Statement for
further information with respect to the Company and the Medium-Term Notes
offered hereby. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission are not necessarily complete, and in each instance reference
is made to the copy of such document so filed. Each such statement is qualified
in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Annual Report of the Company on Form 10-K for the year ended December
31, 1995 and the Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1996, June 30, 1996 and September 30, 1996 have been filed with the
Commission by the Company pursuant to the Exchange Act (File No. 1-5663) and are
incorporated herein by reference. All documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering made by this Prospectus shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
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<PAGE> 3
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or oral request of
any such person, a copy of any and all of the documents (without exhibits other
than exhibits specifically incorporated by reference into such documents)
referred to above that have been incorporated by reference in this Prospectus.
Written or oral requests for such copies should be directed to Central Louisiana
Electric Company, Inc., 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
(P.O. Box 5000, Pineville, Louisiana 71361-5000), Attention: Treasurer
(telephone: (318) 484-7400).
THE COMPANY
The Company is engaged in the business of generating, transmitting,
distributing and selling electric energy to approximately 221,000 customers in
63 communities and contiguous rural areas in the State of Louisiana. The Company
was incorporated under the laws of the State of Louisiana in 1934. The address
of the principal executive offices of the Company is 2030 Donahue Ferry Road,
Pineville, Louisiana 71360-5226 (P.O. Box 5000, Pineville, Louisiana
71361-5000), and its telephone number at such address is (318) 484-7400.
It is expected that the Company's external cash requirements for the
five-year period 1996 through 2000 will be met through the sale of debt
securities. See "Use of Proceeds" below. Short-term requirements pending
permanent financing will be met through the sale of commercial paper and
borrowings under short-term debt arrangements.
The amount of internally generated funds and the Company's ability to
finance future construction and other capital requirements externally through
the sale of securities will be largely dependent on the level of the Company's
sales of electricity, and its electric rates and on the availability and cost of
external financing.
3
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SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT RATIOS, PERCENTAGES AND PER SHARE DATA)
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YEAR ENDED DECEMBER 31,
1993 1994 1995
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Statement of Income Data:
Operating revenues.................................... $382,433 $379,603 $394,426
Operating income...................................... $ 64,745 $ 70,430 $ 74,702
Income before interest charges........................ $ 67,571 $ 71,417 $ 76,907
Net income............................................ $ 41,812 $ 45,043 $ 48,703
Primary earnings per share............................ $ 1.78 $ 1.92 $ 2.08
Fully diluted earnings per share...................... $ 1.73 $ 1.86 $ 2.01
</TABLE>
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<CAPTION>
TWELVE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
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Ratio of Earnings to Fixed
Charges:.......................... 2.99x 3.16x 3.30x 3.35x 3.49x 3.61x
</TABLE>
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<CAPTION>
SEPTEMBER 30, 1996
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Capital Structure:
First mortgage bonds(1)............................................... $ 85,000 11.0%
Medium-term notes..................................................... 215,000 27.8%
Other long-term debt(2)............................................... 60,850 7.9%
Cumulative preferred stock(3)......................................... 15,817 2.1%
Common shareholders' equity........................................... 395,687 51.2%
-------- ----
Total capitalization.......................................... $772,354 100.0%
======== =====
Short-term debt....................................................... $ 31,497
</TABLE>
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(1) Includes $25 million in first mortgage bonds which have been called for
redemption on December 27, 1996.
(2) Includes approximately $61.3 million aggregate principal amount of
continuously remarketed variable rate pollution control revenue bonds due
2018, net of unamortized premium and discount on long-term debt of
approximately $410,000.
(3) Includes $29.5 million of convertible preferred stock issued in April 1991
in connection with the establishment of an employee stock ownership plan,
reduced by approximately $21.0 million of unearned compensation related to
such employee stock ownership plan.
4
<PAGE> 5
USE OF PROCEEDS
Unless otherwise indicated in the applicable Pricing Supplement, the net
proceeds to be received by the Company from the sale of the Medium-Term Notes
may be used to repurchase or redeem equity and higher cost debt securities, to
reduce short-term debt, to finance the construction or acquisition of plant and
related facilities necessary for the Company to meet the requirements of its
customers, and for the Company's other general corporate purposes. Pending
application to one or more of the foregoing uses, the net proceeds will be
invested in short-term financial instruments.
DESCRIPTION OF THE MEDIUM-TERM NOTES
The Medium-Term Notes will be issued under an Indenture (the "Note
Indenture") dated as of October 1, 1988 between the Company and Bankers Trust
Company under which The Bank of New York is the current trustee (the "Note
Trustee"). A copy of the Note Indenture and the Agreement of Resignation,
Appointment and Acceptance whereby The Bank of New York succeeded Bankers Trust
Company as trustee are included among the exhibits to the Registration Statement
of which this Prospectus is a part. The Note Indenture provides that unsecured
debentures, notes or other evidences of indebtedness ("Securities") may be
issued thereunder, without limitation as to aggregate principal amount, by the
Company in one or more series and with such terms as established by the Company
pursuant to the terms of the Note Indenture. All medium-term notes issued or to
be issued by the Company under the Note Indenture are referred to herein as
"Notes." The Medium-Term Notes are a series of Securities under the Note
Indenture and may be issued in one or more offerings. As of the date of this
Prospectus, the Company had issued and outstanding Notes in an aggregate
principal amount of $215 million. The following summaries of certain provisions
of the Note Indenture do not purport to be complete and are subject to, and
qualified in their entirety by, all of the provisions of the Note Indenture,
including the definitions therein of certain terms.
Except as may otherwise be provided in any applicable Pricing Supplement,
each Medium-Term Note will have the following terms and provisions.
General. The Note Indenture provides that the Notes may be issued at
various times, may have differing maturity dates and may bear interest at
differing rates or be issued in zero-coupon form. Except as may otherwise be
provided in any applicable Prospectus Supplement, the Medium-Term Notes will be
issued at a purchase price equal to 100% of the principal amount thereof. Unless
otherwise specified in the applicable Pricing Supplement and except as otherwise
specified in "Book-Entry Notes" below, the Medium-Term Notes will be denominated
in U.S. dollars in minimum denominations of $1,000 or in any amount in excess
thereof that is an integral multiple of $1,000. The interest payment dates for
each interest-bearing Medium-Term Note will be March 15 and September 15 of each
year (each an "Interest Payment Date"). See "Interest Rates and Payments" below.
Each Medium-Term Note will mature more than one year from its date of issue (the
"Stated Maturity"), as set forth in the applicable Pricing Supplement. As
discussed below in "Redemption at the Option of the Company" and "Repayment at
the Option of the Holder," the Medium-Term Notes may be subject to redemption
prior to the Stated Maturity at the option of the Company or any Holder (as
defined in the Note Indenture) thereof, as provided in the applicable Pricing
Supplement. If the applicable Pricing Supplement so provides, the terms of a
Medium-Term Note subject to redemption at the option of the Company may specify
that the Company may not redeem the Medium-Term Note prior to a specified date
as a part of, or in anticipation of, a refunding operation by the application of
monies borrowed having an interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than a specified rate. The
Medium-Term Notes will not be subject to amortization or a sinking fund.
Reference is made to the applicable Pricing Supplement with respect to each
Medium-Term Note for the interest rate (if any) thereon, the Stated Maturity
date thereof and for other important information set forth therein with respect
to such Medium-Term Note.
5
<PAGE> 6
The Company has the sole right to accept any offers to purchase Medium-Term
Notes and may reject any proposed purchase of Medium-Term Notes in whole or in
part.
The Company has designated The Bank of New York ("BONY") as paying agent
and registrar of the Medium-Term Notes. The Company has also designated BONY as
its agent in the Borough of Manhattan, The City of New York, where Medium-Term
Notes may be presented for payment and may be transferred or exchanged. BONY
maintains in the Borough of Manhattan, The City of New York, an office where
such transactions may occur.
No service charge will be made to register any transfer or exchange of the
Medium-Term Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Note Indenture does not contain any covenants or other provisions that
are specifically intended to afford Holders of the Medium-Term Notes special
protection in the event of a highly leveraged transaction by the Company.
Redemption at the Option of the Company. The Medium-Term Notes will not be
subject to amortization or any sinking fund. An issuance of Medium-Term Notes
will be redeemable at the option of the Company prior to their Stated Maturity
only if an initial redemption date is specified therein (the "Initial Redemption
Date") and in the applicable Pricing Supplement. If so indicated in the
applicable Pricing Supplement, the Notes will be subject to redemption at the
option of the Company on any date on and after the applicable Initial Redemption
Date specified in such Pricing Supplement. On and after the Initial Redemption
Date, if any, the related Medium-Term Note may be redeemed at any time in whole
or from time to time in part in increments of $1,000 (or such other amount as
may be specified in the applicable Pricing Supplement) at the option of the
Company at the applicable Redemption Price, together with interest thereon
payable to the date of redemption, on notice given to the Holder (which, in the
case of Book-Entry Notes, will be the Depositary or its nominee) not more than
60 nor less than 30 days prior to the date of redemption and in accordance with
the provisions of the Indenture. "Redemption Price," with respect to a
Medium-Term Note, will initially mean a percentage (the "Initial Redemption
Percentage") of the principal amount of such Note to be redeemed specified in
the applicable Pricing Supplement and shall decline at each anniversary of the
Initial Redemption Date by a percentage (the "Annual Redemption Percentage
Reduction"), if any, specified in the applicable Pricing Supplement, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount. If an Initial Redemption Percentage is specified in the
applicable Pricing Supplement but no Annual Redemption Percentage Reduction is
set forth therein, the "Redemption Price" shall be the Initial Redemption
Percentage of the principal amount of such Medium-Term Note to be redeemed. In
the event of redemption of a Medium-Term Note in part, a new Medium-Term Note or
Notes will be issued to the Holder in the exchange for the unredeemed portion.
Repayment at the Option of the Holder. If so indicated in an applicable
Pricing Supplement, an issuance of Medium-Term Notes will be repayable by the
Company in whole or in part at the option of a Holder thereof on their
respective optional repayment dates specified in such Pricing Supplement (the
"Optional Repayment Dates"). If no Optional Repayment Date is indicated in a
Pricing Supplement with respect to a Medium-Term Note, such Medium-Term Note
will not be repayable at the option of the Holder prior to its Stated Maturity.
Unless otherwise specified in the applicable Pricing Supplement, the repayment
option may be exercised by the Holder for less than the entire principal amount
of the Medium-Term Note. Any repayment in part will be in increments of $1,000
(or such other amount as may be specified in the applicable Pricing Supplement)
provided that any remaining principal amount of such Medium-Term Note will be an
authorized denomination of such Medium-Term Note. Unless otherwise provided in
an applicable Pricing Supplement, the repayment price payable to the Holder will
be 100% of the principal amount to be repaid, together with accrued interest
thereon payable to the date of repayment. In the event of a repayment in part, a
new
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<PAGE> 7
Medium-Term Note or Notes will be issued to the Holder in exchange for the
unrepaid portion. Exercise of such repayment option by the Holder will be
irrevocable.
While Book-Entry Notes are represented by global securities held by or on
behalf of the Depositary, and registered in the name of the Depositary or the
Depositary's nominee, the option for repayment may be exercised by the
Depositary, the Depositary's nominee or the applicable participant (as defined
below in "Book-Entry Notes") on behalf of the beneficial owner of such
Book-Entry Notes by delivering a written notice, in a form acceptable to the
Trustee, to the Trustee at the Corporate Trust Office (or such other address of
which the Company shall from time to time notify the Holders), not more than 60
nor less than 30 days prior to the Optional Repayment Date. Notices of elections
from participants on behalf of beneficial owners of the Book-Entry Notes to
exercise their option to have the Book-Entry Notes repaid must be received by
the Trustee by 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 Book-Entry Notes must so direct the
applicable participant through which it holds an interest in such Book-Entry
Note 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 Book-Entry Notes should
consult the participants through which they own their interest in the Book-Entry
Notes 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, such beneficial owners of
Book-Entry Notes shall effect delivery of such Book-Entry Notes at the time such
notices of election are given to the Trustee by causing the participant to
transfer such beneficial owner's interest in the Book-Entry Notes, on the
Depositary's records, to the Trustee. Conveyance of notices and other
communications by the Depositary to participants, by participants to indirect
participants and by participants and indirect participants to beneficial owners
of the Book-Entry Notes will be governed by agreements among them, subject to
any statutory or regulatory requirements as may be in effect from time to time.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
any other securities laws or regulations in connection with any such repayment.
The Company may at any time purchase Medium-Term Notes at any price or
prices in the open market or otherwise. Medium-Term Notes so purchased by the
Company may be held or resold or, at the discretion of the Company, may be
surrendered to the Trustee for cancellation.
Interest Rates and Payments. Each interest-bearing Medium-Term Note will
bear interest from its original issue date at a fixed or variable rate as
indicated in the applicable Pricing Supplement. The interest rate on any Note
may not exceed nine (9%) percent per year, unless the Company applies for and
receives an order of the Louisiana Public Service Commission ("LPSC") allowing a
higher rate to be paid. Except as provided below with respect to certain first
interest payments, interest will be payable semiannually on each Interest
Payment Date and at maturity. Interest will be computed on the basis of a
360-day year of twelve 30-day months. Unless otherwise provided in the
applicable Pricing Supplement, interest will be payable generally to the person
in whose name such Medium-Term Note is registered at the close of business on
the regular record date (the March 1 or September 1 next preceding each Interest
Payment Date), but interest payable at maturity (whether at stated maturity or
earlier redemption) will be payable in immediately available funds to the person
to whom principal is payable. The first payment of interest on any Medium-Term
Note originally issued between a regular record date and an Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
regular record date to the registered owner on such next regular record date.
Principal and interest at maturity will be payable in immediately available
funds, and Medium-Term Notes will be transferable, at the office of BONY, 101
Barclay Street, New York, New York 10286.
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<PAGE> 8
If an Interest Payment Date or the maturity date falls on a day that is not
a Business Day, principal or interest payable with respect to such Interest
Payment Date or maturity date will be paid on the next succeeding Business Day,
and no interest will accrue with respect to such payment for the period after
such Interest Payment Date or maturity date.
Ranking; Limitation on Liens. The Medium-Term Notes will be unsecured and
will rank pari passu with all other unsecured and unsubordinated indebtedness of
the Company. As of the date hereof, the Company has issued and outstanding $85
million aggregate principal amount of its first mortgage bonds (the "Bonds")
issued under and secured by an Indenture of Mortgage, dated as of July 1, 1950
(the "Original Bond Indenture"), as previously supplemented and amended by
supplemental indentures (the Original Bond Indenture as so supplemented and
amended being herein called the "Bond Indenture"), between the Company and First
National Bank of Commerce (formerly The National Bank of Commerce in New
Orleans), as trustee (the "Bond Trustee"). Holders of the Bonds would have a
prior claim on certain material assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company.
The Company will not issue, assume or guarantee any debt for money borrowed
("Debt") if such Debt is secured by any mortgage, security interest, pledge,
lien or other encumbrance (a "mortgage") upon any property of the Company or any
subsidiary or indebtedness issued by any subsidiary and owned by the Company or
any other subsidiary, and the Company will not permit any subsidiary to issue,
assume or guarantee any Debt secured by any mortgage upon any property of the
Company or indebtedness issued by any subsidiary and owned by the Company,
whether any such property or indebtedness is owned at the date of the Note
Indenture or thereafter acquired, without effectively securing the Notes equally
and ratably with (or prior to) such Debt. The foregoing restriction will not
apply to mortgages on any property of any subsidiary except for property of such
subsidiary that is used to secure Debt of the Company. The foregoing restriction
also will not apply to (1) mortgages to secure Debt issued under the Company's
Bond Indenture; (2) "permitted liens" as defined in the most recent supplement
to the Bond Indenture; (3) mortgages on any property acquired, constructed or
improved after the date of the Note Indenture which are created or assumed
within 120 days after such acquisition or completion of such construction or
improvement (or within six months thereafter pursuant to a firm commitment for
financing arrangements entered into within such 120-day period) to secure or
provide for the payment of the purchase price or cost of such construction or
improvement incurred after the date of the Note Indenture, or existing mortgages
on property acquired, provided such mortgages will not apply to any property
theretofore owned by the Company or a subsidiary other than theretofore
unimproved real property; (4) existing mortgages of a corporation merged with or
into the Company or a subsidiary; (5) mortgages of any corporation existing at
the time it becomes a subsidiary; (6) mortgages securing Debt owed by a
subsidiary to the Company or to another subsidiary; (7) mortgages in favor of
governmental bodies to secure advances or other payments pursuant to any
contract or statute or to secure indebtedness incurred to finance the purchase
price or cost of constructing or improving the property subject to such
mortgages, including mortgages to secure Debt of the pollution control or
industrial revenue bond type; (8) mortgages to secure loans to the Company or
any subsidiary maturing within 12 months and made in the ordinary course of
business; (9) mortgages existing on the date of the Note Indenture; (10)
mortgages on any property (including any natural gas, oil or other mineral
property) to secure all or part of the cost of exploration, drilling or
development thereof or to secure Debt incurred to provide funds for any such
purpose; (11) certain mortgages typically incurred in the ordinary course of
business; or (12) mortgages for extending, renewing or replacing Debt secured by
any mortgage referred to in the foregoing clauses (1) to (11) inclusive or in
this clause (12), provided that the principal amount of Debt secured thereby may
not exceed the principal amount of Debt so secured at the time of such
extension, renewal or replacement, plus the amount of any redemption or
repurchase premiums incurred in retiring such Debt, and that the mortgage for
such extension, renewal or replacement must be limited to the original property
or indebtedness. Furthermore, such restriction will not apply to the issuance,
assumption or guarantee by the Company or any subsidiary of Debt secured by a
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<PAGE> 9
mortgage which would otherwise be subject to the foregoing restriction up to an
aggregate amount which, together with all other secured Debt (not including
secured Debt permitted under the foregoing exceptions), does not exceed five
percent of Consolidated Net Tangible Assets. "Consolidated Net Tangible Assets"
is defined as the total amount of assets appearing on the consolidated balance
sheet of the Company and its subsidiaries less the following: (a) reserves for
depreciation and other asset valuation reserves but excluding reserves for
deferred federal income taxes; (b) intangible assets such as goodwill,
trademarks, trade names, patents and unamortized debt discount and expense; and
(c) appropriate adjustments on account of minority interests of other persons
holding voting stock in any subsidiary of the Company.
Events of Default. The following constitute events of default under the
Note Indenture: (1) default in the payment of principal of (and premium, if any,
on) any Note when due and the continuation thereof for a period of three
business days; (2) default in the payment of interest on any Note when due and
the continuation thereof for a period of 30 days; (3) default in the performance
or breach of any other covenant or warranty of the Company in the Note Indenture
(other than a covenant or warranty included in the Note Indenture solely for the
benefit of one or more series of Securities other than the Notes), and the
continuation thereof for 60 days after written notice to the Company as provided
in the Note Indenture; (4) default in the payment of principal of or interest
on, or acceleration of, securities of any other series issued under the Note
Indenture or any other mortgage, indenture or instrument or other evidence of
indebtedness of the Company for borrowed money, in an aggregate amount exceeding
$5 million, and the continuation thereof for 90 days after written notice to the
Company as provided in the Note Indenture; and (5) certain events of bankruptcy,
insolvency or reorganization.
If an event of default occurs and is continuing, either the Note Trustee or
the Holders of at least 25% in principal amount of the outstanding Notes may
declare the principal amount of all Notes to be due and payable immediately. At
any time after the declaration of acceleration with respect to the Notes has
been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in principal amount of the outstanding Notes
may, under certain circumstances, rescind and annul such acceleration and its
consequences.
The Note Indenture provides that the Note Trustee generally will be under
no obligation to exercise any of its rights or powers under the Note Indenture
at the request or direction of any of the Holders, unless such Holders have
offered to the Note Trustee indemnity acceptable to the Note Trustee. The
Holders of a majority in principal amount of the outstanding Notes generally
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Note Trustee, or exercising any trust
or power conferred on the Note Trustee, with respect to the Notes. The right of
a Holder of any Note to institute a proceeding with respect to the Note
Indenture is subject to certain conditions precedent, but each Holder has an
absolute right to receive payment of principal (and premium, if any) and
interest when due (subject, in the case of interest, to certain limited
exceptions) and to institute suit for the enforcement of any such payment. The
Note Indenture provides that the Note Trustee, within 90 days after the
occurrence of a default with respect to the Notes, is required to give the
Holders of the Notes notice of such default, unless cured or waived, but, except
in the case of default in the payment of principal of (and premium, if any) or
interest on any Note, the Note Trustee may withhold such notice if it determines
that it is in the interest of such Holders to do so.
The Company is and will be required to furnish annually to the Note Trustee
a statement as to the performance by the Company of certain of its obligations
under the Note Indenture and as to any default in such performance.
Consolidation, Merger, Sale or Conveyance. The Note Indenture provides that
the Company may, without the consent of the Holders of the Notes, consolidate
with, or transfer all or substantially all of its property and assets to, or
merge into another corporation, only if in any such case (1) if the Company is
not the continuing corporation, the successor corporation assumes by a
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<PAGE> 10
supplemental indenture the Company's obligations under the Note Indenture and
(2) immediately after giving effect to such transaction no event of default, and
no event which after notice or lapse of time or both would become an event of
default, has occurred and is continuing.
Modification and Waiver. Modification and amendment of the Note Indenture
may be effected by the Company and the Note Trustee with the consent of the
Holders of a majority in principal amount of the outstanding Notes affected
thereby, provided that no such modification or amendment may, without the
consent of the Holder of each outstanding Note affected thereby, (1) change the
stated maturity of the principal of, or any installment of interest on, any Note
or any premium payable on the redemption thereof, or change the redemption
price; (2) reduce the principal amount of, or the interest payable on, any Note
or reduce the amount of principal that could be declared due and payable prior
to the stated maturity; (3) change the place or currency of any payment of
principal of or any premium or interest on any Note; (4) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Note, (5) reduce the percentage in principal amount of outstanding Notes the
consent of whose Holders is required to modify or amend the Note Indenture or to
waive compliance with certain provisions of the Note Indenture; or (6) modify
the foregoing requirements or reduce the percentage of outstanding Notes
necessary to waive any past default to less than a majority. Modification and
amendment of the Note Indenture may be effected by the Company and the Note
Trustee without the consent of the Holders (a) to add to the covenants of the
Company for the benefit of the Holders or to surrender a right or power
conferred on the Company in the Note Indenture, (b) to secure the Notes, or (c)
to make certain other modifications, generally of a ministerial or immaterial
nature. Except with respect to certain fundamental provisions, the Holders of at
least a majority in principal amount of outstanding Notes may waive past
defaults under the Note Indenture and waive compliance by the Company with
certain provisions of the Note Indenture.
Book-Entry Notes. Each Medium-Term Note will be issued only in fully
registered form and will be represented by a global certificate (a "Book-Entry
Note") registered in the name of a nominee of The Depository Trust Company or
other depository (the "Depositary"). Upon issuance, all Book-Entry Notes having
the same original issue date, maturity date, redemption provisions, if any, and
interest rate will be represented by a single global security. Book-Entry Notes
will be issued in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof. Each global security representing Book-Entry Notes
will be deposited with, or on behalf of, the Depositary and registered in the
name of such Depositary or its nominee. Book-Entry Notes will not otherwise be
issuable in definitive form. Unless otherwise specified in the applicable
Pricing Supplement, the Depositary will be The Depository Trust Company, New
York, New York.
Ownership of beneficial interests in a global security representing
Book-Entry Notes will be limited to institutions that have accounts with the
Depositary or its nominee ("participants") or persons that may hold interests
through participants. In addition, ownership of beneficial interests by
participants in such a global security will only be evidenced by, and the
transfer of that ownership interest will only be effected through, records
maintained by the Depositary or its nominee for such global security. Ownership
of beneficial interests in such a global security by persons that hold through
participants will only be evidenced by, and the transfer of that ownership
interest will only be effected through, records maintained by such participant.
The principal amount of such ownership interest may be in a minimum amount of
$1,000. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a global
security.
The Company has been advised by the Depositary that upon the issuance of a
global security representing Book-Entry Notes and the deposit of such global
security with the Depositary, the Depositary will immediately credit, on its
book-entry registration and transfer systems, the respective principal amounts
of the Book-Entry Notes represented by such global security to the accounts of
participants who have purchased such Book-Entry Notes. The accounts to be
credited will be designated by the underwriters, agents or other persons through
whom the Medium-Term Notes are
10
<PAGE> 11
offered and sold or, to the extent that the Book-Entry Notes are offered and
sold directly, by the Company.
So long as the Depositary or its nominee is the registered owner of a
Book-Entry Note, such Depositary or nominee, as the case may be, will be
considered the sole owner of such Book-Entry Note for all purposes under the
Note Indenture and such Book-Entry Note. Except as provided below, owners of
beneficial interests in a Book-Entry Note will not be entitled to have
Medium-Term Notes represented by such Book-Entry Note registered in their names,
will not receive or be entitled to receive physical delivery of a Note
represented by a certificate upon exchange or otherwise, and will not be
considered the owners or Holders thereof under the Note Indenture. Accordingly,
each person owning a beneficial interest in the Book-Entry Note must rely on the
procedures of the Depositary and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a Holder of a Note under the Note Indenture. The Company
understands that under existing industry practices, if the Company requests any
action of Holders or if an owner of a beneficial interest in a Book-Entry Note
desires to give or take any action which a Holder is entitled to give or take
under the Note Indenture, the Depositary for such Book-Entry Note would
authorize the participants holding the relevant beneficial interests to give or
take such action, and such participants would authorize beneficial owners owning
through such participants to give or take such actions or would otherwise act
upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on Book-Entry Notes
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee as the registered owner of such Book-Entry Notes. None
of the Company, the Note Trustee, any paying agent or the security registrar for
such Book-Entry Notes will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in such Book-Entry Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for Book-Entry Notes or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a Book-Entry Note, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Book-Entry Notes as shown on the records of the
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Book-Entry Notes held
through such participants will be governed by standing instructions and
customary practices, as is now 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 participants. However, the Company has no control over
the practices of the Depositary or the participants and there can be no
assurance that such practices will not change.
A Book-Entry Note is exchangeable for a note represented by a certificate
only if (i) the Depositary with respect to such Book-Entry Note notifies the
Company that it is unwilling or unable to continue as Depositary for such
Book-Entry Note or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act and, in each case, a successor to the
Depositary has not been appointed by the Company within 90 days of such notice
or cessation, (ii) the Company determines at any time not to have Notes
represented by one or more Book-Entry Notes, or (iii) the Company receives
notice of acceleration of the indebtedness under the Notes in accordance with
the terms of the Notes.
The Depository Trust Company has advised the Company as follows: The
Depositary is a limited-purpose trust company organized under New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of its participants and to facilitate
the clearance and
11
<PAGE> 12
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly. Persons who are not participants
may beneficially own securities held by the Depositary only through
participants.
PLAN OF DISTRIBUTION
Under the terms of a Selling Agency Agreement (the "Selling Agency
Agreement"), the Medium-Term Notes are offered on a continuous basis by the
Company through Salomon Brothers Inc, First Chicago Capital Markets, Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc.
(collectively, the "Agents"), each of whom has agreed to use its reasonable
efforts to solicit offers to purchase the Medium-Term Notes. The Company has
agreed to pay each Agent a commission of .125% to .750% of the principal amount
of each Medium-Term Note sold through such Agent, depending upon the maturity of
the Medium-Term Note. Commissions on Medium-Term Notes with maturities in excess
of 30 years will be agreed upon between the Company and the Agents at the time
of sale and may exceed .750% of the principal amount of such Medium-Term Notes.
The Company may also sell the Medium-Term Notes to any Agent, acting as
principal, at a discount to be agreed upon at the time of sale, for resale to
one or more investors or other purchasers at varying prices related to
prevailing market prices at the time or times of resale, as determined by such
Agent, or if agreed, at a fixed public offering price. The interest rate on any
Note may not exceed nine (9%) percent per year, unless the Company applies for
and receives an order of the LPSC allowing a higher rate to be paid. The Company
may also sell the Notes directly to investors or other purchasers on its own
behalf or through others. In the case of sales made directly by the Company, no
commission or discount in lieu thereof will be paid or allowed. The Company has
agreed to reimburse the Agents for certain expenses.
The Company has reserved the right to sell Medium-Term Notes to or through
one or more other agents. The identity of any other agent will be set forth in
the Pricing Supplement relating to the Medium-Term Notes sold by such other
agent. Any sales of Medium-Term Notes to or through other agents will be made in
accordance with an agreement between the Company and such agents, the terms of
which agreement will be substantially similar to those contained in the Selling
Agency Agreement.
The Company will have the sole right to accept offers to purchase
Medium-Term Notes and may reject any proposed purchase of Medium-Term Notes in
whole or in part. Each Agent will have the right, in its discretion reasonably
exercised, to reject any offer to purchase Medium-Term Notes received by it, in
whole or in part.
No Note will have an established trading market when issued. The Company
has advised the Agents that 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 of a secondary market for any Notes, or that
the Notes will be sold. The Medium-Term Notes may be sold outside the United
States.
Each of the Agents has in the past engaged in transactions with and
performed services for the Company in the ordinary course of business.
The Company has agreed to indemnify each Agent against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments such Agent may be
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<PAGE> 13
required to make in respect thereof. Each Agent and any other agent may be
deemed to be an "underwriter" within the meaning of the Securities Act of 1933,
as amended.
LEGAL OPINIONS
Certain legal matters in connection with the sale of the Medium-Term Notes
are being passed upon for the Company by Gordon, Arata, McCollam & Duplantis,
L.L.P., New Orleans, Louisiana. The legality of the Medium-Term Notes will be
passed upon for any underwriters, dealers or agents by Brown & Wood LLP, New
York, New York. Brown & Wood LLP will rely as to all matters of Louisiana law
upon the opinion of Gordon, Arata, McCollam & Duplantis, L.L.P.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and the
consolidated statements of income, cash flows and changes in common
shareholders' equity for each of the three years in the period ended December
31, 1995, and the related notes and schedule, which are included or incorporated
by reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, and which are incorporated by reference in this Prospectus,
have been included herein in reliance on the reports (also incorporated by
reference herein) of Coopers & Lybrand L.L.P., independent accountants, given on
the authority of that firm as experts in auditing and accounting.
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<PAGE> 14
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PRICING SUPPLEMENT IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES DESCRIBED IN THIS 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
OR ANY PRICING SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Information by
Reference............................ 2
The Company............................ 3
Selected Financial Information......... 4
Use of Proceeds........................ 5
Description of the Medium-Term Notes... 5
Plan of Distribution................... 12
Legal Opinions......................... 13
Experts................................ 13
</TABLE>
$200,000,000
CENTRAL LOUISIANA
ELECTRIC COMPANY, INC.
MEDIUM-TERM NOTES
DUE MORE THAN ONE YEAR
FROM DATE OF ISSUE
[CLECO LOGO]
SALOMON BROTHERS INC
FIRST CHICAGO CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
PROSPECTUS
DATED DECEMBER 12, 1996
