<PAGE>
As filed with the Securities and Exchange Commission on December 22, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
CLECO UTILITY GROUP INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
LOUISIANA 72-0244480
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2030 DONAHUE FERRY ROAD R. O'NEAL CHADWICK, JR.
PINEVILLE, LOUISIANA 71360-5226 MANAGER, LEGAL SERVICES
(318) 484-7400 2030 DONAHUE FERRY ROAD
(Address, including zip code, and telephone PINEVILLE, LOUISIANA 71360-5226
number, including area code, of registrant's (318) 484-7400
principal executive offices) (Name, address, including zip code, and telephone
number, including area code, of agent for service)
___________________
COPIES TO:
TIMOTHY S. TAYLOR WILLIAM MASSEY
BAKER BOTTS L.L.P. BROWN & WOOD LLP
910 LOUISIANA ONE WORLD TRADE CENTER
ONE SHELL PLAZA 58TH FLOOR
HOUSTON, TEXAS 77002-4995 NEW YORK, NEW YORK 10048
(713) 229-1234 (212) 839-8657
___________________
</TABLE>
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PRICE PER UNIT OFFERING PRICE (1)(2) REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities.................................. $200,000,000 100% $200,000,000 $50,000
==================================================================================================================================
</TABLE>
(1) Or, if any Debt Securities are issued at an original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price of $200,000,000.
(2) Estimated in accordance with Rule 457(o) promulgated under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee.
_________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
********************************************************************************
* The information in this prospectus supplement is not complete and may be *
* changed. We may not sell these securities until the registration statement *
* filed with the Securities and Exchange Commission is effective. This *
* prospectus supplement is not an offer to sell these securities and it is not *
* soliciting an offer to buy these securities in any state where the offer or *
* sale is not permitted. *
********************************************************************************
Subject to completion, dated __________ __, _____.
PROSPECTUS SUPPLEMENT
---------------------
(To prospectus dated _____ __, ____)
[LOGO]
$100,000,000
CLECO UTILITY GROUP INC.
MEDIUM-TERM NOTES
DUE ONE YEAR OR MORE FROM DATE OF ISSUE
___________________________
The Company: Cleco Utility Group Inc. Our principal executive office is
located at 2030 Donahue Ferry Road, Pineville, Louisiana, 71360-5226, and
our telephone number is (318) 484-7400.
Terms: We plan to offer and sell notes with various terms, including the
following:
<TABLE>
<S> <C>
. Ranking as senior unsecured . Interest at fixed or floating rates,
indebtedness of the Company or no interest at all. The floating
interest rate may be based on one or
. Stated maturities of one year or more of the following indices plus or
more from date of issue minus a spread and/or multiplied by a
spread multiplier:
. Redemption and/or repayment
provisions, if applicable, whether . Commercial paper rate
mandatory or at the option of the . LIBOR
Company or noteholders . Treasury rate
. Minimum denominations of $1,000 . Interest payments on fixed rate
notes on each March 15 and September 15
. Book-entry (through The Depository
Trust Company) or certificated form . Interest payments on floating rate
notes on a monthly, quarterly,
semiannual or annual basis
</TABLE>
We will specify the final terms for each note, which may be different from the
terms described in this prospectus supplement, in the applicable pricing
supplement.
_____________________________________
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON PAGE S-1.
<TABLE>
<S> <C> <C> <C>
Agent's Discounts Proceeds to
Public Offering Price and Commissions Company
Per Note............ --------------------- --------------------- -------------------------
Total............... 100% .125% - .750% 99.875% - 99.250%
$100,000,000 $125,000 - $750,000 $99,875,000 - $99,250,000
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We may sell notes to the agents referred to below as principal for resale
at varying or fixed offering prices or through the agents as agent using their
reasonable efforts on our behalf. We may also sell notes without the assistance
of any agent.
___________________________________
MERRILL LYNCH & CO.
BANC ONE CAPITAL MARKETS, INC.
SALOMON SMITH BARNEY
___________________________________
The date of this prospectus supplement is _________ __, ____.
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a registration statement we have
filed with the Securities and Exchange Commission, or "SEC," using a "shelf"
registration process. By using this process, we may offer up to $100 million of
our notes in one or more offerings. This prospectus supplement and the
accompanying prospectus provide you with a description of the notes we may
offer. Each time we offer notes, we will provide a pricing supplement to this
prospectus supplement. The pricing supplement will describe the specific terms
of the offering. The pricing supplement may also add, update or change the
information contained in this prospectus supplement or in the accompanying
prospectus. Please carefully read the accompanying prospectus, this prospectus
supplement, the applicable pricing supplement and the information contained in
the documents we refer to in the "Where You Can Find More Information" section
of the accompanying prospectus.
References in this prospectus supplement to "the Company," "we," "us" or
other similar terms mean Cleco Utility Group Inc., unless the context clearly
indicates otherwise. References in this prospectus to an "agent" are to any
agent that has executed a distribution agreement with us to purchase notes as
principal for resale or to use reasonable efforts to distribute the notes as
agent on our behalf.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. We have not authorized anyone else to provide you with
different or additional information. If anyone provides you with different or
additional information, you should not rely on it. We are not making an offer
to sell notes in any jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus supplement, the accompanying prospectus
and any pricing supplement is accurate only as of its date.
RISK FACTORS
Your investment in the notes involves certain risks. In consultation with
your own financial and legal advisers, you should carefully consider, among
other matters, the following discussion of risks before deciding whether an
investment in the notes is suitable for you. Notes are not an appropriate
investment for you if you are unsophisticated with respect to their significant
components.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
If your notes are redeemable at our option, we may choose to redeem your
notes at times when prevailing interest rates are relatively low. In addition,
if your notes are subject to mandatory redemption, we may be required to redeem
your notes also at times when prevailing interest rates are relatively low. As
a result, you generally will not be able to reinvest the redemption proceeds in
a comparable security at an effective interest rate as high as your notes being
redeemed.
THERE MAY NOT BE ANY TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING AND MARKET VALUE OF YOUR NOTES
Upon issuance, your notes will not have an established trading market. We
cannot assure you a trading market for your notes will ever develop or be
maintained if developed. In addition to our creditworthiness, many other
factors affect the trading market for and trading value of your notes. These
factors include:
. the method of calculating the principal, premium and interest in
respect of your notes,
. the time remaining to the maturity of your notes,
. the outstanding amount of notes having terms identical to your notes,
. any redemption features of your notes, and
. the level, direction and volatility of market interest rates generally.
S-1
<PAGE>
There may be a limited number of buyers when you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes. In addition, notes that are designed for specific investment
objectives or strategies often experience a more limited trading market and more
price volatility than those not so designed. You should not purchase notes
unless you understand and know you can bear all of the investment risks
involving your notes.
OUR CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES
The credit ratings of our medium-term note program may not reflect the
potential impact of all risks related to structure and other factors on any
trading market for or trading value of your notes. In addition, real or
anticipated changes in our credit ratings will generally affect any trading
market for or trading value of your notes.
DESCRIPTION OF THE NOTES
GENERAL
We will issue the notes as a series of debt securities under an indenture,
dated as of October 1, 1988, between us and Bankers Trust Company, as
supplemented and amended. The Bank of New York is the current trustee under the
indenture. Copies of the indenture and the Agreement of Resignation,
Appointment and Acceptance under which The Bank of New York succeeded Bankers
Trust Company as trustee under the indenture are included among the exhibits to
the registration statement of which this prospectus supplement and the
accompanying prospectus are a part. The indenture is governed by the Trust
Indenture Act of 1939, as amended. The term "debt securities," as used in this
prospectus supplement, refers to all securities issued and issuable from time to
time under the indenture and includes the notes. The debt securities and the
indenture are more fully described in the accompanying prospectus. The
following summary of the material provisions of the notes and of the indenture
is not complete and is qualified in its entirety by reference to the indenture.
The following description of the notes will apply unless otherwise specified in
an applicable pricing supplement.
All of our debt securities, including the notes, issued and to be issued
under the indenture will be our unsecured general obligations and will rank
equally with all of our other unsecured and unsubordinated indebtedness
outstanding from time to time. The indenture does not limit the aggregate
principal amount of debt securities that we may issue. We may issue our debt
securities from time to time in one or more series up to the aggregate principal
amount authorized by us for a particular series. We may, from time to time,
without the consent of the holders of the notes, issue notes or other debt
securities under our indenture in addition to the notes offered by this
prospectus supplement. We may also, from time to time, without the consent of
the holders of the notes, issue additional notes or other debt securities having
the same terms as previously issued notes, other than the date of issuance,
interest commencement date and offering price, which may vary, that will form a
single issue with the previously issued notes. At September 30, 2000, we had
approximately $240 million principal amount of debt securities issued and
outstanding under the indenture.
The notes will be offered on a continuing basis and will mature on a date
one year or more from their date of issue. We call the date on which the notes
mature the "Stated Maturity Date," as specified in the applicable pricing
supplement, unless the principal amount of the notes, or any installment of the
principal amount, becomes due and payable prior to the Stated Maturity Date by
the declaration of acceleration of maturity, notice of redemption at our option,
notice of the holder's option to elect repayment or otherwise. The Stated
Maturity Date or any date prior to the Stated Maturity Date on which a
particular note becomes due and payable, as the case may be, is referred to in
this prospectus supplement as the "Maturity Date" with respect to the principal
of the particular note repayable on that date. Interest-bearing notes will bear
interest at either fixed or floating rates as specified in the applicable
pricing supplement. We may also issue notes that do not bear interest, or we
may issue notes at significant discounts from their principal amount payable at
maturity.
The notes will be denominated in United States dollars, and we will make
payments of principal, premium, if any, and/or interest, if any, on the notes in
United States dollars. Unless otherwise specified in the applicable pricing
supplement, you will be required to pay the purchase price of your notes in
immediately available funds in
S-2
<PAGE>
United States dollars in The City of New York on the date of settlement. The
notes are currently limited to up to $100 million aggregate initial offering
price.
Interest rates that we offer on the notes may differ depending upon, among
other factors, the aggregate principal amount of notes purchased in any single
transaction. Notes with different variable terms, in addition to interest
rates, may also be offered concurrently to different investors. We may change
interest rates or formulas and other variable terms of the notes from time to
time, but no change will affect any note already issued or for which we have
accepted an offer to purchase.
Each note will be issued in fully registered book-entry form or
certificated form, in denominations of $1,000 or any larger amount that is an
integral multiple of $1,000, unless otherwise specified in the applicable
pricing supplement. Notes in book-entry form may be transferred or exchanged
only through a participating member of The Depository Trust Company, also known
as DTC, or any other depository that is identified in an applicable pricing
supplement. For more information on notes in book-entry form and on the
depository, see "--Book-Entry Notes" in this prospectus supplement and
"Description of the Debt Securities--Form, Denomination and Registration; Book-
Entry System" in the accompanying prospectus. Registration of any transfer of
notes in certificated form will be made at the corporate trust office of the
trustee in the Borough of Manhattan, The City of New York. You will not have to
pay a service charge to transfer or exchange notes, but we may require you to
pay taxes or other governmental charges for exchanges involving transfers under
the terms of the indenture.
We will make payments of principal, premium, if any, and/or interest, if
any, on notes in book-entry form through the trustee to the depository or its
nominee. In the case of notes in certificated form, we will make payment of
principal, premium, if any, and/or interest, if any, due on the Maturity Date
through the trustee in immediately available funds upon presentation and
surrender of the certificated note and, in the case of any repayment on an
optional repayment date, upon submission of a duly completed election form if
and as required by the provisions described below, at the corporate trust office
of the trustee or at any other place as we may designate. Payment of interest
due on the Maturity Date of notes in certificated form will be made to the
person to whom payment of the principal under the note will be made. Payment of
interest due on notes in certificated form other than on the Maturity Date will
be made at the corporate trust office of the trustee or, at our option, may be
made by check mailed to the address of the person entitled to receive payment as
the address appears in the security register. However, a holder of $10 million
or more in aggregate principal amount of notes in certificated form, whether
having identical or different terms and provisions, will be entitled to receive
interest payments, other than on the Maturity Date, by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received in writing by the trustee not less than 15 days prior to the applicable
interest payment date. Any wire instructions received by the trustee will
remain in effect until revoked by the applicable holder.
REDEMPTION AT THE OPTION OF THE COMPANY
The notes will not be subject to any sinking fund. We may redeem the notes
at our option before their Stated Maturity Date only if an initial redemption
date is specified in the applicable notes and in the applicable pricing
supplement. If an initial redemption date is specified in the applicable notes
and pricing supplement, we may redeem the related notes at any time on or after
the initial redemption date by providing notice to the holders of the related
notes not more than 60 days nor less than 30 days prior to the date of
redemption. We may make this type of redemption all at once or in parts over
time.
When we redeem any notes at our option as provided above, we will pay the
redemption price plus the interest that is payable to (but not including) the
date of redemption on the applicable note. Unless otherwise specified in the
applicable pricing supplement, the redemption price with respect to a note will
initially mean a percentage, the initial redemption percentage, multiplied by
the unpaid principal amount of the note to be redeemed. The initial redemption
percentage, if any, will be specified in the applicable pricing supplement and
will decline at each anniversary of the initial redemption date by a percentage
specified in the applicable pricing supplement until the redemption price is
100% of the unpaid principal amount of the note to be redeemed. If an initial
redemption percentage is specified in the applicable pricing supplement but no
percentage for the annual reduction of the initial redemption percentage is
specified, the redemption price will be based upon the initial redemption
percentage of the unpaid principal amount of the note to be redeemed. We will
redeem the notes at our option in increments of $1,000 or any other integral
multiple of an authorized denomination specified in the applicable pricing
supplement,
S-3
<PAGE>
provided that any remaining principal amount will be at least $1000 or other
authorized denomination of the applicable note.
REPAYMENT AT THE OPTION OF THE HOLDER
We will repay the notes in whole or in part at the option of the holders of
the notes on any optional repayment date specified in an applicable pricing
supplement. However, a note will not be repayable at the option of a holder
before its Stated Maturity Date if the applicable pricing supplement does not
specify an optional repayment date. Any repayment in part will be in increments
of $1,000 or any other integral multiple of an authorized denomination specified
in the applicable pricing supplement, provided that any remaining principal
amount will be at least $1,000 or other authorized denomination of the
applicable note. The repayment price for any note to be repaid will be 100% of
the unpaid principal amount to be repaid, together with interest on the
principal of the applicable note payable to the date of repayment.
For any note to be repaid, the trustee must receive, at its corporate trust
office, not more than 60 nor less than 30 days before the optional repayment
date, the particular note being repaid and:
. in the case of a note in certificated form, the form entitled "Option to
Elect Repayment" duly completed, or
. in the case of a note in book-entry form, repayment instructions from
the applicable beneficial owner of the note to the depository and
forwarded by the depository.
Notices of elections from a holder to exercise the repayment option must be
received by the trustee by 5:00 p.m., New York City time, on the last day for
giving notice. Exercise of the repayment option by the holder of a note will be
irrevocable.
Only the depository may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial
owners of global securities that desire to have all or any portion of the notes
in book-entry form represented by global securities repaid must instruct the
"participant" through which they own their interests to direct the depository to
exercise the repayment option on their behalf by forwarding repayment
instructions to the trustee as discussed above. In order to ensure that the
instructions are received by the trustee on a particular day, the applicable
beneficial owner must provide the necessary instructions to the participant
through which it owns its interest before that participant's deadline for
accepting instructions for that day. Beneficial owners of notes in book-entry
form should consult the participants through which they own their interests for
the applicable deadlines, as different participants may have different deadlines
for accepting instructions from their customers. All instructions given to
participants from beneficial owners of notes in book-entry form relating to the
option to elect repayment will be irrevocable. In addition, at the time
instructions are given, each beneficial owner must cause the participant through
which the beneficial owner owns its interest to transfer to the trustee, on the
depository's records, its interest in the global security or securities
representing the related notes in book-entry form. For more information on
global securities and procedures relating to the depository, see "--Book-Entry
Notes" in this prospectus supplement and "Description of the Debt Securities--
Form, Denomination and Registration; Book-Entry System" in the accompanying
prospectus.
We may at any time purchase notes at any price in the open market or
otherwise. We may hold notes that we purchase in this manner or surrender them
to the trustee for cancellation at our discretion.
INTEREST
Each interest-bearing note will bear interest at a fixed or floating rate
as provided in the applicable pricing supplement from its original issue date
until the principal of the note is paid or made available for payment. Fixed
rate notes will bear interest at a rate per annum, and floating rate notes will
bear interest pursuant to an interest rate formula. Interest payments on the
notes will equal the amount of interest accrued from and including
. the immediately preceding interest payment date on which interest was
paid, or
S-4
<PAGE>
. the date of issue, if no interest has been paid with respect to the
notes.
Interest on the notes will accrue to, but exclude, the applicable interest
payment date or the Maturity Date, as the case may be.
Interest will be payable in arrears on each interest payment date specified
in the applicable pricing supplement and on the Maturity Date. Unless otherwise
specified in an applicable pricing supplement, interest will be payable to the
persons who are registered holders of the notes as of the close of business on
the regular record date, which will be the fifteenth calendar day immediately
preceding the related interest payment date, whether or not that day is a
"Business Day," as defined below. The first payment of interest on any note
originally issued between a regular record date and the related interest payment
date will be made on the interest payment date immediately following the next
succeeding regular record date to the persons who are the registered holders on
the next succeeding regular record date.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
Additionally, with respect to notes as to which the London Interbank Offered
Rate, or "LIBOR" is an applicable "Interest Rate Basis," the day must also be a
"London Banking Day," which means a day on which commercial banks are open for
business, including dealings in the "LIBOR Currency," in London. The terms
"LIBOR," "LIBOR Currency" and "Interest Rate Basis" are discussed in
"--Floating Rate Notes" below.
FIXED RATE NOTES
Each fixed rate note will bear interest from and including the date of
issue, at the rate per annum specified in the applicable pricing supplement,
until the principal amount of the note is paid. The interest rate on any fixed-
rate note may not exceed 9% per year unless we apply for and receive an order of
the Louisiana Public Service Commission allowing a higher rate to be paid.
Interest on fixed rate notes will be computed on the basis of a 360-day year of
twelve 30-day months.
Unless otherwise specified in an applicable pricing supplement, interest on
fixed rate notes will be payable semiannually on March 15 and September 15 of
each year and on the Maturity Date. If any interest payment date or the
Maturity Date of a fixed rate note falls on a day that is not a Business Day,
the related payment of principal, premium, if any, and/or interest will be made
on the next succeeding Business Day as if made on the date the applicable
payment was due, and no additional interest will accrue in respect of the
payment made on that next succeeding Business Day.
FLOATING RATE NOTES
We use various capitalized terms in this section in describing the floating
rate notes. If not already defined, these terms are defined and discussed
below.
Interest on floating rate notes will be determined by reference to the
applicable "Interest Rate Basis" or "Interest Rate Bases," which may be one or
more of:
. the "Commercial Paper Rate,"
. LIBOR,
. the "Treasury Rate," or
. any other Interest Rate Basis or interest rate formula that is specified
in the applicable pricing supplement.
A floating rate note may bear interest with respect to two or more Interest Rate
Bases.
S-5
<PAGE>
Each applicable pricing supplement will specify certain terms of the
floating rate note being offered, including:
. whether the floating rate note is:
. a "Regular Floating Rate Note,"
. a "Floating Rate/Fixed Rate Note" or
. an "Inverse Floating Rate Note,"
. the "Fixed Interest Rate," if applicable,
. the Interest Rate Basis or Bases,
. the "Initial Interest Rate," if any,
. the "Interest Reset Dates,"
. the interest payment dates,
. the period to maturity of the instrument or obligation with respect to
which the Interest Rate Basis or Bases will be calculated, which we call
the "Index Maturity,"
. the "Maximum Interest Rate" and "Minimum Interest Rate," if any,
. the number of basis points to be added to or subtracted from the related
Interest Rate Basis or Bases, which we call the "Spread,"
. the percentage of the related Interest Rate Basis or Bases by which the
Interest Rate Basis or Bases will be multiplied to determine the
applicable interest rate, which we call the "Spread Multiplier," and
. if one or more of the specified Interest Rate Bases is LIBOR, the LIBOR
Currency, the Index Maturity and the "Designated LIBOR Page."
Regular Floating Rate Notes
A floating rate note will be a "Regular Floating Rate Note" unless:
. it is designated as a Floating Rate/Fixed Rate Note or an Inverse
Floating Rate Note or
. a different interest rate formula applies to the note as a result of an
"Addendum" to or "Other Provision" of the note, as described below in
"--Other Provisions; Addenda."
A Regular Floating Rate Note will bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any.
Beginning on the first Interest Reset Date, the rate at which interest on the
Regular Floating Rate Note will be payable will be reset as of each Interest
Reset Date, except that the interest rate in effect for the period from the date
of issue to the first Interest Reset Date will be the "Initial Interest Rate."
S-6
<PAGE>
Floating Rate/Fixed Rate Notes
If a floating rate note is designated as a "Floating Rate/Fixed Rate Note,"
it will bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any.
Beginning on the first Interest Reset Date, the rate at which interest on the
Floating Rate/Fixed Rate Note will be payable will be reset as of each Interest
Reset Date, except that:
. the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate, and
. the interest rate in effect commencing on, and including, the date on
which interest begins to accrue on a fixed rate basis to maturity will
be the "Fixed Interest Rate," if the rate is specified in the applicable
pricing supplement, or if no Fixed Interest Rate is specified, the
interest rate in effect on the Floating Rate/Fixed Rate Note on the day
immediately preceding the date on which interest begins to accrue on a
fixed rate basis.
Inverse Floating Rate Notes
If a floating rate note is designated as an "Inverse Floating Rate Note,"
it will bear interest equal to the Fixed Interest Rate specified in the related
pricing supplement minus the rate determined by reference to the applicable
Interest Rate Basis or Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any.
However, the interest rate on the applicable Inverse Floating Rate Note will not
be less than 0%. Beginning on the first Interest Reset Date, the rate at which
interest on the Inverse Floating Rate Note is payable will be reset as of each
Interest Reset Date, except that the interest rate in effect for the period from
the date of issue to the first Interest Reset Date will be the Initial Interest
Rate.
Interest Rate Determination
The interest rate derived from an Interest Rate Basis will be determined in
accordance with the applicable provisions below. The interest rate in effect on
each day will be based on:
. if the day is an Interest Reset Date, the rate determined as of the
"Interest Determination Date" immediately preceding the applicable
Interest Reset Date, or
. if the day is not an Interest Reset Date, the rate determined as of the
Interest Determination Date immediately preceding the most recent
Interest Reset Date, except that the interest rate in effect for the
period from the date of issue to the first Interest Reset Date will be
the Initial Interest Rate.
Interest Reset Dates. The applicable pricing supplement will specify the
"Interest Reset Dates," which are the dates on which the interest rate on the
related floating rate note will be reset. The period between Interest Reset
Dates is the "Interest Reset Period." The Interest Reset Date will be, in the
case of floating rate notes that reset:
. daily -- each Business Day;
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. weekly -- the Wednesday of each week, except for weekly reset floating
rate notes as to which the Treasury Rate is an applicable Interest Rate
Basis. These notes will reset the Tuesday of each week, except as
described below under "--Interest Determination Dates";
. monthly -- the third Wednesday of each month;
. quarterly -- the third Wednesday of March, June, September and December
of each year;
. semiannually -- the third Wednesday of the two months specified in the
applicable pricing supplement; and
. annually -- the third Wednesday of the month specified in the applicable
pricing supplement.
However, the rate of interest will not reset after the applicable date on which
interest on a fixed rate basis begins to accrue with respect to Floating
Rate/Fixed Rate Notes.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, the particular Interest Reset Date will be
postponed to the next succeeding Business Day. However, in the case of a
floating rate note as to which LIBOR is an applicable Interest Rate Basis, if
the Business Day falls in the next succeeding calendar month, the particular
Interest Reset Date will be the immediately preceding Business Day. In
addition, in the case of a floating rate note as to which the Treasury Rate is
an applicable Interest Rate Basis, if the Interest Determination Date would
otherwise fall on an Interest Reset Date, the particular Interest Reset Date
will be postponed to the next succeeding Business Day.
Interest Determination Dates. The interest rate applicable to an Interest
Reset Period commencing on the related Interest Reset Date will be determined by
reference to the applicable Interest Rate Basis as of the particular "Interest
Determination Date."
. The Interest Determination Date with respect to the Commercial Paper
Rate will be the second Business Day preceding the related Interest
Reset Date.
. The Interest Determination Date with respect to LIBOR will be the second
London Banking Day preceding the related Interest Reset Date.
. The Interest Determination Date with respect to the Treasury Rate will
be the day in the week in which the related Interest Reset Date falls on
which day "Treasury Bills" are normally auctioned. Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the
following Tuesday, except that the auction may be held on the preceding
Friday. However, if an auction is held on the Friday of the week
preceding the related Interest Reset Date, the Interest Determination
Date will be the preceding Friday.
. The Interest Determination Date pertaining to a floating rate note the
interest rate of which is based on two or more Interest Rate Bases will
be the latest Business Day that is at least two Business Days before the
related Interest Reset Date for the applicable floating rate note on
which each Interest Rate Basis is determinable.
Calculation Date. The Bank of New York will be the calculation agent. The
interest rate applicable to each Interest Reset Period will be determined by the
calculation agent on or prior to the calculation date, except with respect to
LIBOR, which will be determined on the particular Interest Determination Date.
Upon the request of the holder of any floating rate note, the calculation agent
will provide the interest rate then in effect and, if determined, the interest
rate that will become effective as a result of a determination made for the next
Interest Reset Date with respect to that floating rate note. Unless otherwise
specified in the applicable pricing supplement, the calculation date, if
applicable, pertaining to any Interest Determination Date will be the earlier
of:
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. the tenth calendar day after the applicable Interest Determination Date,
or, if the tenth calendar day is not a Business Day, the next succeeding
Business Day, or
. the Business Day immediately preceding the applicable interest payment
date or the Maturity Date, as the case may be.
Maximum and Minimum Interest Rates. A floating rate note also may have
either or both of the following:
. a maximum numerical limitation, or ceiling, on the rate at which
interest may accrue during any Interest Reset Period, which we call a
"Maximum Interest Rate," and
. a minimum numerical limitation, or floor, on the rate at which interest
may accrue during any Interest Reset Period, which we call a "Minimum
Interest Rate."
The indenture is, and any notes issued under the indenture will be,
governed by and construed in accordance with the laws of the State of New York.
In addition to any Maximum Interest Rate that may apply to a floating rate note,
the interest on floating rate notes will in no event be higher than the maximum
rate permitted by New York law, as it may be modified by federal law.
Interest Payments and Calculations. Each applicable pricing supplement
will specify the dates on which interest will be payable. The interest payment
dates with respect to floating rate notes that reset will be:
. in the case of floating rate notes that reset daily, weekly or monthly
--the third Wednesday of each month or on the third Wednesday of March,
June, September and December of each year, as specified in the
applicable pricing supplement;
. in the case of floating rate notes that reset quarterly -- the third
Wednesday of March, June, September and December of each year;
. in the case of floating rate notes that reset semiannually -- the third
Wednesday of the two months of each year specified in the applicable
pricing supplement; and
. in the case of floating rate notes that reset annually -- the third
Wednesday of the month of each year specified in the applicable pricing
supplement.
In addition, the Maturity Date will also be an interest payment date.
If any interest payment date, other than the Maturity Date, for any
floating rate note would otherwise be a day that is not a Business Day, the
interest payment date will be postponed to the next succeeding Business Day.
However, in the case of a floating rate note as to which LIBOR is an applicable
Interest Rate Basis, if the Business Day falls in the next succeeding calendar
month, the applicable interest payment date will be the immediately preceding
Business Day. If the Maturity Date of a floating rate note falls on a day that
is not a Business Day, the payment of principal, premium, if any, and/or
interest will be made on the next succeeding Business Day as if made on the
Maturity Date, and no additional interest will accrue in respect of the payment
made on that next succeeding Business Day.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards. For example,
9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All
monetary amounts used in or resulting from any calculation on floating rate
notes will be rounded to the nearest cent or other comparable unit, with one-
half cent or unit being rounded upward.
With respect to each floating rate note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. The accrued
interest factor is computed by adding the interest factor calculated for each
day in the period for which accrued interest is being calculated.
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. In the case of notes for which the Interest Rate Basis is the Commercial
Paper Rate or LIBOR, the interest factor for each day will be computed
by dividing the interest rate applicable to each day in the period by
360.
. In the case of notes for which the Interest Rate Basis is the Treasury
Rate, the interest factor for each day will be computed by dividing the
interest rate applicable to each day in the period by the actual number
of days in the year.
. The interest factor for notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases will be calculated in
each period in the same manner as if only one of the applicable Interest
Rate Bases applied.
Interest Rate Bases
The calculation agent will determine the rate derived from each Interest
Rate Basis in accordance with the following provisions:
Commercial Paper Rate. "Commercial Paper Rate" means:
(1) the "Money Market Yield," as defined below, on the applicable
Interest Determination Date of the rate for commercial paper having
the Index Maturity specified in the applicable pricing supplement
published in H.15(519), as defined below, under the caption
"Commercial Paper-Nonfinancial," or
(2) if the rate referred to in clause (1) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
Money Market Yield on the applicable Interest Determination Date of
the rate for commercial paper having the applicable Index Maturity as
published in H.15 Daily Update, as defined below, or other recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "Commercial Paper-Nonfinancial," or
(3) if the rate referred to in clause (2) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
rate on the applicable Interest Determination Date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 a.m., New York City time, on
that Interest Determination Date of three leading dealers of United
States dollar commercial paper in The City of New York, which may
include an agent or its affiliates, selected by the calculation agent
for commercial paper having the applicable Index Maturity placed for
industrial issuers whose bond rating is "Aa," or the equivalent, from
a nationally recognized statistical rating organization, or
(4) if the dealers selected by the calculation agent are not
quoting as mentioned in clause (3), the Commercial Paper Rate in
effect on the applicable Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x 360
Money Market Yield = --------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
"H.15 (519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
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"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
LIBOR. "LIBOR" means:
(1) if "LIBOR Telerate" is specified in the applicable pricing
supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable pricing supplement as the method for
calculating LIBOR, LIBOR will be the rate for deposits in the LIBOR
Currency, as defined below, having the Index Maturity specified in
the applicable pricing supplement, commencing on the related Interest
Reset Date, that appears on the Designated LIBOR Page, as defined
below, as of 11:00 a.m., London time, on the applicable Interest
Determination Date, or
(2) if "LIBOR Reuters" is specified in the applicable pricing
supplement, LIBOR will be the arithmetic mean of the offered rates,
calculated by the calculation agent, for deposits in the LIBOR
Currency having the applicable Index Maturity, commencing on the
related Interest Reset Date, that appear on the Designated LIBOR Page
as of 11:00 a.m., London time, on the applicable Interest
Determination Date. If the Designated LIBOR Page by its terms
provides only for a single rate, then the single rate will be used,
or
(3) with respect to an Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may
be, on the Designated LIBOR Page as specified in clauses (1) and (2),
respectively, the rate calculated by the calculation agent as the
arithmetic mean of at least two offered quotations obtained by the
calculation agent after requesting the principal London offices of
each of four major reference banks, which may include affiliates of
an agent, in the London interbank market to provide the calculation
agent with its offered quotation for deposits in the LIBOR Currency
for the period of the applicable Index Maturity, commencing on the
related Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on the applicable
Interest Determination Date and in a principal amount that is
representative for a single transaction in the applicable LIBOR
Currency in that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so
provided, the rate calculated by the calculation agent as the
arithmetic mean of the rates quoted at approximately 11:00 a.m., in
the applicable Principal Financial Center, as defined below, on the
applicable Interest Determination Date by three major banks, which
may include affiliates of an agent, in the applicable Principal
Financial Center selected by the calculation agent for loans in the
LIBOR Currency to leading European banks, having the applicable Index
Maturity and in a principal amount that is representative for a
single transaction in the applicable LIBOR Currency in that market at
that time, or
(5) if the banks so selected by the calculation agent are not
quoting as mentioned in clause (4), LIBOR in effect on the applicable
Interest Determination Date.
"LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR will be calculated or, if no currency is specified
in the applicable pricing supplement, United States dollars.
"Designated LIBOR Page" means either:
. if "LIBOR Telerate" is designated in the applicable pricing supplement
or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
display on Bridge Telerate, Inc., or any successor service on the page
specified in the pricing supplement, or any page as may replace the
specified page on that service, for the purpose of displaying the London
interbank rates of major banks for the applicable LIBOR Currency, or
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. if "LIBOR Reuters" is specified in the applicable pricing supplement,
the display on the Reuter Monitor Money Rates Service or any successor
service on the page specified in the applicable pricing supplement, or
any other page as may replace the specified page on that service, for
the purpose of displaying the London interbank rates of major banks for
the applicable LIBOR Currency.
"Principal Financial Center" means the capital city of the country to which
the LIBOR Currency relates, except that with respect to United States dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian
lire, Portuguese escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney, Toronto, Frankfurt,
Amsterdam, Milan, London, Johannesburg and Zurich, respectively.
Treasury Rate. The "Treasury Rate" means:
(1) the rate from the auction held on the applicable Interest
Determination Date, which we refer to as the "Auction," of direct
obligations of the United States, which we refer to as "Treasury
Bills," having the Index Maturity specified in the applicable pricing
supplement under the caption "INVESTMENT RATE" on the display on
Bridge Telerate, Inc., or any successor service on page 56 or 57 or
any other pages as may replace page 56 or 57 on that service, which
we refer to as "Telerate Page 56" and "Telerate Page 57,"
respectively, or
(2) if the rate referred to in clause (1) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
"Bond Equivalent Yield," as defined below, of the rate for the
applicable Treasury Bills as published in H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High," or
(3) if the rate referred to in clause (2) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
Bond Equivalent Yield of the auction rate of the applicable Treasury
Bills announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not announced by the
United States Department of the Treasury, or if the Auction is not
held, the Bond Equivalent Yield of the rate on the applicable
Interest Determination Date of the applicable Treasury Bills
published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market," or
(5) if the rate referred to in clause (4) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
rate on the applicable Interest Determination Date of the applicable
Treasury Bills published in H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market," or
(6) if the rate referred to in clause (5) is not so published by
3:00 p.m., New York City time, on the related calculation date, the
rate on the applicable Interest Determination Date calculated by the
calculation agent as the Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 p.m., New
York City time, on the applicable Interest Determination Date, of
three primary United States government securities dealers, which may
include an agent or its affiliates, selected by the calculation
agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified in the applicable pricing
supplement, or
(7) if the dealers selected by the calculation agent are not
quoting as mentioned in clause (6), the Treasury Rate in effect on
the applicable Interest Determination Date.
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"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = --------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the
case may be, and "M" refers to the actual number of days in the interest period
for which interest is being calculated.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to a series of notes, including the
specification and determination of one or more Interest Rate Bases, the
calculation of the interest rate applicable to a floating rate note, the
applicable interest payment dates, the Stated Maturity Date, any redemption or
repayment provisions or any other matter relating to the applicable notes may be
modified by terms specified under "Other Provisions" on the face of the
applicable notes. Any of these provisions may also be modified in an Addendum
relating to the applicable notes, if specified on the face of the applicable
notes and in the applicable pricing supplement.
DEFEASANCE AND COVENANT DEFEASANCE
We will be discharged from all of our obligations with respect to the
notes, except for certain obligations to exchange or register the transfer of
notes, to replace stolen, lost or mutilated notes, to maintain paying agencies
and to hold moneys for payment in trust, upon the deposit in trust for the
benefit of the holders of the notes of money or U.S. government obligations, or
both. A deposit by us in this manner will provide money in an amount sufficient
to pay the principal, premium, if any, and/or interest, if any, on the notes on
the respective stated maturities in accordance with the terms of the indenture
and the notes through the payment of principal and interest in respect of the
deposited money or government obligations in accordance with their terms. This
defeasance or discharge may occur only if, among other things, we have delivered
to the trustee an opinion of counsel to the effect that we have received from,
or there has been published by, the United States Internal Revenue Service a
ruling, or there has been a change in tax law, in either case to the effect that
holders of the notes will not recognize gain or loss for federal income tax
purposes as a result of the deposit, defeasance and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if the deposit, defeasance and discharge
were not to occur.
In certain circumstances, we may omit to comply with specified restrictive
covenants applicable to the notes. In those circumstances, the occurrence of
certain events of default, which are described in the accompanying prospectus
under "--Events of Default," will be deemed not to be or result in an event of
default with respect to the notes. In order to exercise this option, we will be
required to deposit, in trust for the benefit of the holders of the notes, money
or U.S. government obligations, or both. A deposit by us in this manner will
provide money in an amount sufficient to pay the principal, premium, if any,
and/or interest, if any, on the notes on the respective stated maturities in
accordance with the terms of the indenture and the notes through the payment of
principal and interest in respect of the money or government obligations in
accordance with their terms. We will also be required, among other things, to
deliver to the trustee an opinion of counsel to the effect that holders of the
notes will not recognize gain or loss for federal income tax purposes as a
result of the deposit and defeasance of certain obligations and will be subject
to federal income tax on the same amount, in the same manner and at the same
times as would have been the case if the deposit and defeasance were not to
occur. In the event we exercise this option with respect to any notes and the
notes were declared due and payable because of the occurrence of any event of
default, the amount of money and U.S. government obligations deposited in trust
would be sufficient to pay amounts due on the notes at the time of their
respective stated maturities, but might not be sufficient to pay amounts due on
the notes upon any acceleration resulting from the event of default. In this
case, we would remain liable for those payments.
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DISCOUNT NOTES
We may from time to time offer notes at a price less than their redemption
price at maturity, resulting in the applicable notes being treated as if they
were issued with original issue discount for federal income tax purposes. These
notes are called "Discount Notes." Discount Notes may pay no current interest or
interest at a rate that at the time of issuance is below market rates.
Additional considerations relating to any Discount Notes will be described in
the applicable pricing supplement.
AMORTIZING NOTES
We may from time to time offer notes, which we call "Amortizing Notes,"
with amounts of principal and interest payable in installments over the term of
the notes. Unless otherwise specified in an applicable pricing supplement,
interest on each Amortizing Note will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect to Amortizing Notes will be
applied first to interest due and payable on the Amortizing Notes and then to
the reduction of the unpaid principal amount of the Amortizing Notes. Further
information concerning additional terms and conditions of any issue of
Amortizing Notes will be specified in the applicable pricing supplement. A
table setting forth repayment information in respect of each Amortizing Note
will be specified in the applicable pricing supplement.
BOOK-ENTRY NOTES
DESCRIPTION OF THE GLOBAL SECURITIES
Upon issuance, all notes in book-entry form having the same date of issue,
maturity and otherwise having identical terms and provisions will be represented
by one or more fully registered global securities, which we call the "Global
Notes." Each Global Note will be deposited with, or on behalf of, The
Depository Trust Company, as depository, and registered in the name of the
depository or a nominee of the depository. Unless and until it is exchanged in
whole or in part for notes in certificated form, no Global Note may be
transferred except as a whole by the depository or by a nominee of the
depository.
DEPOSITORY PROCEDURES
For information about the depository and its procedures, see "Description
of the Debt Securities -- Form, Denomination and Registration; Book-Entry
System" in the accompanying prospectus.
UNITED STATES FEDERAL INCOME TAXATION
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, including changes in effective dates, or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers, except where otherwise specifically
noted. Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes arising under the laws of any other
taxing jurisdiction.
As used in this prospectus supplement, the term "U.S. Holder" means a
beneficial owner of a note that is for United States federal income tax
purposes:
(1) an individual who is either a citizen or resident of the United
States,
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(2) a corporation created or organized in or under the laws of the United
States, any state thereof or the District of Columbia,
(3) an estate whose income is subject to United States federal income tax
regardless of its source,
(4) a trust if either --
. a court within the United States is able to exercise primary
supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust, or
. the trust has a valid election in effect under applicable
Treasury regulations to be treated as a domestic trust, or
(5) any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business.
As used in this prospectus supplement, the term "non-U.S. Holder" means a
beneficial owner of a note that is not a U.S. Holder. But if a partnership,
including any entity treated as a partnership for United States federal income
tax purposes, is the beneficial owner of a note, the tax treatment of a partner
will generally depend upon the status of the partner and upon the activities of
the partnership. Partners of partnerships holding a note should consult their
tax advisors.
U.S. HOLDERS
PAYMENTS OF INTEREST
Payments of interest on a note generally will be taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received, in accordance with the U.S. Holder's regular method of tax accounting.
ORIGINAL ISSUE DISCOUNT
The following summary is a general discussion of the United States federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of notes issued with original issue discount ("Discount Notes").
Fixed Rate Notes
For United States federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price.
. The issue price of each note of an issue of notes equals the first price
at which a substantial amount of the notes has been sold, ignoring sales
to bond houses, brokers, or similar persons or organizations acting in
the capacity of underwriters, placement agents, or wholesalers.
. The stated redemption price at maturity of a note is the sum of all
payments provided by the note other than "qualified stated interest"
payments.
. The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually at a single fixed rate.
But if the amount of original issue discount is less than a de minimis amount
(generally 1/4 of 1% of the note's stated redemption price at maturity
multiplied by the number of complete years to its maturity from its issue date
or, in the case of a note providing for the payment of any amount other than
qualified stated interest prior to maturity,
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multiplied by the weighted average maturity of the note), it will be treated as
zero. For the purpose of determining whether the amount of original issue
discount exceeds the de minimis amount, if a note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
the note (e.g., notes with teaser rates or interest holidays), the note's stated
redemption price at maturity is treated as equal to the note's issue price plus
the greater of (i) the amount of foregone interest resulting from the reduced
rates or (ii) the excess of the note's stated principal amount over its issue
price.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note generally must include original
issue discount in income as ordinary interest income for United States federal
income tax purposes as it accrues under a constant yield method in advance of
receipt of the cash payments attributable to such income, regardless of the U.S.
Holder's regular method of tax accounting. In general, the amount of original
issue discount included in income by the initial U.S. Holder of a Discount Note
is the sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between
. the product of the Discount Note's adjusted issue price at the beginning
of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and
appropriately adjusted to take into account the length of the particular
accrual period) and
. the amount of any qualified stated interest payments allocable to such
accrual period.
The "adjusted issue price" of a Discount Note at the beginning of any accrual
period is the sum of the issue price of the Discount Note plus the amount of
original issue discount included in the holder's income in all prior accrual
periods minus the amount of any prior payments on the Discount Note that were
not qualified stated interest payments. Under these rules, U.S. Holders
generally will have to include in income increasingly greater amounts of
original issue discount in successive accrual periods.
Acquisition Premium
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium." Under the acquisition
premium rules, the amount of original issue discount which such U.S. Holder must
include in its gross income with respect to such Discount Note for any taxable
year (or portion thereof in which the U.S. Holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Variable Notes
Floating rate notes (referred to in this section as "Variable Notes") that
qualify as "variable rate debt instruments" are subject to special rules. A
Variable Note will qualify as a "variable rate debt instrument" if (i) its issue
price does not exceed the total principal payments due under the Variable Note
by more than a specified de minimis amount, (ii) no principal payments are
contingent, and (iii) it provides for stated interest, paid or compounded at
least annually, at current values of:
. one or more qualified floating rates,
. a single fixed rate and one or more qualified floating rates,
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. a single objective rate, or
. a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, two or more qualified floating rates that can reasonably be expected
to have approximately the same values throughout the term of the Variable Note
(e.g., two or more qualified floating rates with values within 25 basis points
of each other as determined on the Variable Note's issue date) will be treated
as a single qualified floating rate. Notwithstanding the foregoing, a variable
rate that would otherwise constitute a qualified floating rate but which is
subject to one or more restrictions such as a restriction on the maximum
interest rate (i.e., a cap) or the minimum interest rate (i.e., a floor) will
not be treated as a qualified floating rate, unless such cap or floor (i) is
fixed throughout the term of the note or (ii) is not reasonably expected to
affect significantly the yield of the note.
An "objective rate" is a rate that is not itself a qualified floating rate
but which is determined using a single fixed formula that is based on objective
financial or economic information. A rate will not qualify as an objective rate
if it is based on information that is within the control of the issuer, or a
related party, or that is unique to the circumstances of the issuer, or a
related party, such as dividends, profits, or the value of the issuer's stock
(although a rate does not fail to be an objective rate merely because it is
based on the credit quality of the issuer).
A "qualified inverse floating rate" is any objective rate where such rate
is equal to a fixed rate minus a qualified floating rate, as long as variations
in the rate can reasonably be expected to inversely reflect contemporaneous
variations in the qualified floating rate.
If a Variable Note provides for stated interest at a fixed rate for an
initial period of one year or less followed by a variable rate that is either a
qualified floating rate or an objective rate and if the variable rate on the
Variable Note's issue date is intended to approximate the fixed rate (e.g., the
value of the variable rate on the issue date does not differ from the value of
the fixed rate by more than 25 basis points), then the fixed rate and the
variable rate together will constitute either a single qualified floating rate
or objective rate, as the case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument," and if the interest on a
Variable Note is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually, then all stated interest on the
Variable Note will constitute qualified stated interest and will be taxed
accordingly. Thus, such a Variable Note will generally not be treated as having
been issued with original issue discount unless the Variable Note is issued at a
"true" discount (i.e., at a price below the Variable Note's stated principal
amount) in excess of a specified de minimis amount. The amount of qualified
stated interest and the amount of original issue discount, if any, that accrues
during an accrual period on such a Variable Note is determined under the rules
(described above) applicable to fixed rate notes by assuming that the variable
rate is a fixed rate equal to
. in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date, of the qualified floating rate or
qualified inverse floating rate, or
. in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is reasonably
expected for the Variable Note.
The qualified stated interest allocable to an accrual period is increased
(or decreased) if the interest actually paid during an accrual period exceeds
(or is less than) the interest assumed to be paid during the accrual period
pursuant to the foregoing rules.
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In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. Such a Variable Note must
be converted into an "equivalent" fixed rate debt instrument by
. substituting any qualified floating rate or qualified inverse floating
rate provided for under the terms of the Variable Note with a fixed rate
equal to the value of the qualified floating rate or qualified inverse
floating rate, as the case may be, as of the Variable Note's issue date,
and
. substituting any objective rate (other than a qualified inverse floating
rate) provided for under the terms of the Variable Note with a fixed
rate that reflects the yield that is reasonably expected for the
Variable Note.
In the case of a Variable Note that qualifies as a "variable rate debt
instrument" and provides for stated interest at a fixed rate in addition to
either one or more qualified floating rates or a qualified inverse floating
rate, the fixed rate is initially converted into a qualified floating rate (or a
qualified inverse floating rate, if the Variable Note provides for a qualified
inverse floating rate). Under such circumstances, the qualified floating rate
or qualified inverse floating rate that replaces the fixed rate must be such
that the fair market value of the Variable Note as of the Variable Note's issue
date is approximately the same as the fair market value of an otherwise
identical debt instrument that provides for either the qualified floating rate
or qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument, and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. At the end of each accrual period, appropriate adjustments will be
made to the amount of qualified stated interest or original issue discount
assumed to have been accrued or paid with respect to the "equivalent" fixed rate
debt instrument in the event that such amounts differ from the actual amount of
interest accrued or paid on the Variable Note during the accrual period.
Contingent Payment Notes
If a Variable Note does not qualify as a "variable rate debt instrument,"
then the Variable Note would be treated as a contingent payment debt obligation.
A U.S. Holder of such an instrument must generally include future contingent and
noncontingent interest payments in income as such interest accrues based upon a
projected payment schedule. Moreover, in general, any gain recognized by a U.S.
Holder on the sale, exchange, or retirement of a contingent payment debt
instrument will be treated as ordinary income and all or a portion of any loss
realized could be treated as ordinary loss as opposed to capital loss, depending
upon the circumstances. The proper United States federal income tax treatment
of Variable Notes that are treated as contingent payment debt obligations will
be more fully described in the applicable pricing supplement.
Furthermore, any other special United States federal income tax
considerations, not otherwise discussed in this prospectus supplement, which are
applicable to any particular issue of notes will be discussed in the applicable
pricing supplement.
We may issue notes that:
. may be redeemable at our option prior to their stated maturity (a "call
option")
. may be repayable at the option of the holder prior to their stated
maturity (a "put option").
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Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and features
of the purchased notes.
Elections
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
SHORT-TERM NOTES
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
may be treated as having been issued with original issue discount. In general,
however, an individual or other cash method U.S. Holder is not required to
accrue such original issue discount unless the U.S. Holder elects to do so. If
such an election is not made, then
. any gain recognized by the U.S. Holder on the sale, exchange or maturity
of the Short-Term Note will be ordinary income to the extent of the
original issue discount accrued on a straight-line basis, or if the U.S.
Holder elects then under the constant yield method (based on daily
compounding), through the date of sale or maturity and
. a portion of the deductions otherwise allowable to the U.S. Holder for
interest on borrowings allocable to the Short-Term Note will be deferred
until a corresponding amount of income is realized.
U.S. Holders who report income for United States federal income tax purposes
under the accrual method, and certain other holders including banks and dealers
in securities, are required to accrue original issue discount on a Short-Term
Note on a straight-line basis unless an election is made to accrue the original
issue discount under a constant yield method (based on daily compounding).
MARKET DISCOUNT
If a U.S. Holder purchases a note, other than a Discount Note, for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or, in the case of a
Discount Note, for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased the note
at a "market discount," unless such market discount is less than a specified de
minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a note as ordinary
income to the extent of the lesser of:
. the amount of such payment or realized gain or
. the market discount which has not previously been included in the income
of the holder and is treated as having accrued on the note while held by
the holder through the time of such payment or disposition.
Market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
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A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount.
A U.S. Holder may elect to include market discount in income currently as
it accrues (on either a ratable or semiannual compounding basis), in which case
the rules described above regarding the treatment as ordinary income of gain
realized upon the disposition of the note and upon the receipt of certain cash
payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States federal income tax purposes. Such an election will
apply to all debt instruments acquired by the U.S. Holder on or after the first
day of the taxable year to which such election applies and may be revoked only
with the consent of the IRS.
PREMIUM
If a U.S. Holder purchases a note for an amount that is greater than the
sum of all amounts payable on the note after the purchase date other than
payments of qualified stated interest, the U.S. Holder will be considered to
have purchased the note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder that purchases a Discount Note with "amortizable bond
premium" will not include any original issue discount in income. A U.S. Holder
may elect to amortize such premium using a constant yield method over the
remaining term of the note and may offset interest otherwise required to be
included in respect of the note during any taxable year by the amortized amount
of such excess for the taxable year. However, if the note may be optionally
redeemed after the U.S. Holder acquires it at a price in excess of its stated
redemption price at maturity, special rules would apply which could result in a
deferral of the amortization of some bond premium until later in the term of the
note. Any election to amortize bond premium applies to all taxable debt
obligations then owned and thereafter acquired by the U.S. Holder and may be
revoked only with the consent of the IRS.
DISPOSITION OF A NOTE
Except as discussed above, upon the sale, exchange or retirement of a note,
a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and the U.S.
Holder's adjusted tax basis in the note. The portion of the amount realized
representing accrued and unpaid interest will be interest income to the U.S.
Holder. A U.S. Holder's adjusted tax basis in a note generally will equal the
U.S. Holder's initial investment in the note increased by any original issue
discount included in income (and accrued market discount, if any, if the U.S.
Holder has included such market discount in income) and decreased by the amount
of any payments, other than qualified stated interest payments, received and
amortizable bond premium taken with respect to the note. Such gain or loss
generally will be long-term capital gain or loss if the note is held for more
than one year. Long-term capital gains of individuals are subject to reduced
capital gain rates while short-term capital gains are subject to ordinary income
rates. The deductibility of capital losses is subject to certain limitations.
Prospective investors should consult their own tax advisors concerning these tax
law provisions.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a note, unless such non-U.S. Holder is a direct or indirect
10% or greater shareholder of ours, a controlled foreign corporation related to
us or a bank receiving interest described in section 881(c)(3)(A) of the
Internal Revenue Code, which we may refer to as the "Code." To qualify for the
exemption from taxation, the last United States payor (or non-U.S. payor who is
a qualified intermediary, United States branch of a foreign person, or
withholding foreign partnership) in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received prior to the
payment of principal or interest a statement that
. was signed in the current or any of the three immediately preceding
calendar years by the beneficial owner of the note under penalties of
perjury,
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. certifies that such owner is not a U.S. Holder and
. provides the name and address of the beneficial owner.
The statement may be made on an IRS Form W-8BEN or a substantially similar form,
and the beneficial owner must inform the Withholding Agent of any change in the
information on the statement within 30 days of such change. If a note is held
through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8BEN or the substitute form provided by
the beneficial owner to the organization or institution.
Generally, a non-U.S. Holder will not be subject to United States federal
income taxes on any amount that constitutes capital gain upon retirement or
disposition of a note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder, and
in the case of a non-U.S. Holder that is an individual, such individual was not
present in the United States for 183 days or more in the taxable year of
disposition and certain other conditions are met. Certain other exceptions may
be applicable, and a non-U.S. Holder should consult its tax advisor in this
regard.
The notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of ours or, at
the time of such individual's death, payments in respect of the notes would have
been effectively connected with the conduct by such individual of a trade or
business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States federal income tax at a rate of 31% may
apply to payments made in respect of the notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information,
such as the registered owner's taxpayer identification number, in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either:
. the broker determines that the seller is a corporation or other exempt
recipient or
. the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such
seller is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either:
. the broker determines that the seller is an exempt recipient or
. the seller certifies its non-U.S. status (and certain other conditions
are met).
Certification of the registered owner's non-U.S. status would be made normally
on an IRS Form W-8BEN under penalties of perjury, although in certain cases it
may be possible to submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the IRS.
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PLAN OF DISTRIBUTION
We are offering the notes on a continuing basis for sale to or through
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc One Capital Markets,
Inc., Salomon Smith Barney and other agents. The agents, individually or in a
syndicate, may from time to time purchase notes, as principal, from us for
resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the applicable
agent or, if so specified in the applicable pricing supplement, for resale at a
fixed offering price. However, we may agree with an agent for that agent to
utilize its reasonable efforts on an agency basis on our behalf to solicit
offers to purchase notes at 100% of the principal amount of the notes, unless
otherwise specified in the applicable pricing supplement. We will pay a
commission to an agent, ranging from .125% to .750% of the principal amount of
each note, depending upon its stated maturity, sold through that agent. We will
negotiate commissions with respect to notes with stated maturities in excess of
30 years that are sold through an agent at the time of the related sale. We
estimate our expenses incurred in connection with the offering and sale of the
notes, including reimbursement of certain of the agents' expenses, will total
approximately $250,000.
Unless otherwise specified in the applicable pricing supplement, any note
sold to an agent as principal will be purchased by that agent at a price equal
to 100% of the principal amount of the note less a percentage of the principal
amount equal to the commission applicable to an agency sale of a note of
identical maturity. An agent may sell notes it has purchased from us as
principal to certain dealers less a concession equal to all or any portion of
the discount received in connection with that purchase. An agent may allow, and
dealers may reallow, a discount to certain other dealers. After the initial
offering of notes, the offering price (in the case of notes to be resold on a
fixed offering price basis), the concession and the reallowance may be changed.
We reserve the right to withdraw, cancel or modify the offer made in this
prospectus supplement without notice and may reject offers in whole or in part,
whether placed directly by us or through an agent. Each agent will have the
right, in its discretion reasonably exercised, to reject in whole or in part any
offer to purchase notes received by it on an agency basis.
Unless otherwise specified in the applicable pricing supplement, you will
be required to pay the purchase price of your notes in immediately available
funds in United States dollars in The City of New York on the date of
settlement. See "Description of the Notes--General."
Upon issuance, the notes will not have an established trading market. The
notes will not be listed on any securities exchange. The agents may from time
to time purchase and sell notes in the secondary market, but the agents are not
obligated to do so, and there can be no assurance that a secondary market for
the notes will develop or that there will be liquidity in the secondary market
if one develops. From time to time, the agents may make a market in the notes,
but the agents are not obligated to do so and may discontinue any market-making
activity at any time.
In connection with an offering of notes purchased by one or more agents as
principal on a fixed offering price basis, the applicable agents will be
permitted to engage in certain transactions that stabilize the price of notes.
These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of notes. If those agents create a "short
position" in notes, that is, if they sell notes in an amount exceeding the
amount referred to in the applicable pricing supplement, they may reduce that
short position by purchasing notes in the open market. In general, purchases of
notes for the purpose of stabilization or to reduce a short position could cause
the price of notes to be higher than it might be in the absence of these type of
purchases.
Neither we nor any agent makes any representation or prediction as to the
direction or magnitude of any effect that the transactions described in the
immediately preceding paragraph may have on the price of notes. In addition,
neither we nor any agent makes any representation that the agents will engage in
any of these transactions or that these transactions, once commenced, will not
be discontinued without notice.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933. We have agreed to indemnify the agents against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments the agents may be required to make in that respect.
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In the ordinary course of their business, the agents and their affiliates
have engaged, and may in the future engage, in investment and commercial banking
transactions with us and our affiliates.
VALIDITY OF THE NOTES
The validity of the notes offered by this prospectus supplement will be
passed upon for us by Baker Botts L.L.P., Houston, Texas, and for the agents by
Brown & Wood LLP, New York, New York. Phelps Dunbar, L.L.P., New Orleans,
Louisiana, will pass upon all matters of Louisiana law in this connection.
S-23
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*******************************************************************************
*The information in this prospectus is not complete and may be changed. We may*
*not sell these securities until the registration statement filed with the *
*Securities and Exchange Commission is effective. This prospectus is not an *
*offer to sell these securities and it is not soliciting an offer to buy these*
*securities in any state where the offer or sale is not permitted. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED __________ __, ______
PROSPECTUS
CLECO UTILITY GROUP INC.
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
(318) 484-7400
$200,000,000
DEBT SECURITIES
____________________
We may offer and sell up to $200,000,000 of our debt securities in one or
more series by using this prospectus. We will establish the terms for our debt
securities at the time we sell them and we will describe them in one or more
supplements to this prospectus. You should read this prospectus and the related
supplement carefully before you invest in our debt securities. This prospectus
may not be used to offer and sell our debt securities unless accompanied by a
prospectus supplement.
____________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
____________________
The date of this prospectus is __________ __, ____.
<PAGE>
TABLE OF CONTENTS
About This Prospectus..................................................... 1
Disclosure Regarding Forward-Looking Statements........................... 2
The Company............................................................... 3
Ratio of Earnings to Fixed Charges........................................ 4
Use of Proceeds........................................................... 5
Description of the Debt Securities........................................ 5
Plan of Distribution...................................................... 12
Where You Can Find More Information....................................... 14
Validity of Securities.................................................... 15
Experts................................................................... 15
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with the
Securities and Exchange Commission, or "SEC," using a "shelf" registration
process. By using this process, we may offer up to $200 million of our debt
securities in one or more offerings. This prospectus provides you with a
description of the debt securities we may offer. Each time we offer debt
securities, we will provide a supplement to this prospectus. The prospectus
supplement will describe the specific terms of the offering. The prospectus
supplement may also add, update or change the information contained in this
prospectus. Please carefully read this prospectus, the applicable prospectus
supplement and the information contained in the documents we refer to in the
"Where You Can Find More Information" section of this prospectus.
References in this prospectus to "the Company," "we," "us" or other similar
terms mean Cleco Utility Group Inc., unless the context clearly indicates
otherwise.
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We
have not authorized anyone else to provide you with any different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell debt securities in any
jurisdiction where the offer or sale is not permitted. The information
contained in this prospectus is current only as of the date of this prospectus.
1
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the information incorporated by reference into
this prospectus, contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements relate to
future events, our future financial performance, future legislative and
regulatory changes affecting our business and other matters. These forward-
looking statements are based on management's beliefs as well as assumptions made
by and information currently available to management. Although we believe the
expectations reflected in these forward-looking statements are reasonable, these
forward-looking statements are based on numerous assumptions (some of which may
prove to be incorrect) and are subject to risks and uncertainties that could
cause the actual results to differ materially from our expectations.
When used, the words "anticipate," "estimate," "expect," "objective,"
"projection," "forecast," "goal" and similar expressions are intended to
identify forward-looking statements. In addition to any assumptions and other
factors referred to specifically in connection with these forward-looking
statements, the following list identifies some of the factors that could cause
our actual results to differ materially from those contemplated in any of our
forward-looking statements:
. unusual weather conditions, catastrophic weather-related damage,
unscheduled generation outages, unusual maintenance or repairs,
unanticipated changes to fuel costs, gas supply costs or availability
constraints due to higher demand, shortages, transportation problems or
other developments, environmental incidents or electric transmission or
gas pipeline system constraints;
. increased competition in the electric industry, including effects of
industry restructuring or deregulation, transmission system operation or
administration, retail wheeling or cogeneration;
. unanticipated changes in rate-setting policies or procedures, recovery
of investments made under traditional regulation and the frequency and
timing of rate increases;
. financial or regulatory accounting principles or policies imposed by the
Financial Accounting Standards Board, the SEC, the Federal Energy
Regulatory Commission, or "FERC," the Louisiana Public Service
Commission, or "LPSC," or similar entities with regulatory or accounting
oversight;
. economic conditions, including inflation rates and monetary
fluctuations;
. changing market conditions and a variety of other factors associated
with physical energy and financial trading activities, including, but
not limited to price, basis, credit, liquidity, volatility, capacity,
transmission, interest rate and warranty risks;
. employee work force factors, including changes in key executives;
. cost and other effects of legal and administrative proceedings,
settlements, investigations, claims and other matters;
. changes in federal, state or local legislative requirements, such as
changes in tax laws or rates, regulating policies or environmental laws
and regulations; and
. other factors we discuss in the related prospectus supplement, including
those outlined in "Risk Factors," if any.
We undertake no obligation to update or revise any forward-looking
statements, whether as a result of changes in actual results, changes in
assumptions or other factors affecting such statements.
2
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THE COMPANY
Cleco Utility Group Inc., formerly Cleco Corporation, was incorporated
under the laws of the State of Louisiana on January 2, 1935. We are an electric
utility that provides generation, transmission and distribution electric utility
operations subject to the jurisdiction of the LPSC. We provide electric utility
services to approximately 249,000 retail and wholesale customers in 63
communities and rural areas in a 14,000-square-mile region in the State of
Louisiana. Effective July 1, 1999, we were reorganized into a holding company
structure. This reorganization resulted in the creation of a new holding
company, Cleco Corporation, which became the owner of all of our outstanding
common stock. Cleco Corporation, subject to certain limited exceptions, is
exempt from regulation as a public utility holding company pursuant to
Section 3(a)(1) of the Public Utility Holding Company Act of 1935 and Rule 2
thereunder. Our principal executive offices are located at 2030 Donahue Ferry
Road, Pineville, Louisiana 71360-5226, and our phone number at this address is
(318) 484-7400.
On September 21, 2000, we filed applications with the FERC and the LPSC
requesting authorization to convert our form of business organization from a
corporation to a limited liability company. The purpose of this conversion is
to lessen our Louisiana state tax obligations. We are required to obtain
authorization from the FERC and the LSPC to engage in a conversion because of
their jurisdiction over us as a utility. The LSPC authorized our conversion to
a limited liability company on November 17, 2000, and the FERC authorized our
conversion on November 30, 2000. We plan to convert to a limited liability
company on December 31, 2000, by merging into Cleco Power LLC, a wholly-owned
limited liability company subsidiary of Cleco Corporation. As a result of the
conversion, our name will change to Cleco Power LLC, and all of our rights and
obligations will vest in and become the responsibility of Cleco Power LLC.
3
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SELECTED FINANCIAL DATA
The following table presents our selected financial data. The data
set forth below should be read together with our historical financial statements
and the notes to those statements included in our Registration Statement on Form
10, as amended, which is incorporated into this prospectus by reference. Our
selected income statement data for the years ended December 31, 1995, 1996,
1997, 1998 and 1999 and our selected balance sheet data as of December 31, 1998
and 1999 are derived from audited financial statements. Our selected income
statement data for the nine months ended September 30, 1999 and 2000 and our
selected balance sheet data at September 30, 2000 have been derived from our
unaudited interim financial statements, and include, in the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the data for such periods. Our financial information
for periods prior to July 1, 1999 include the results of former subsidiaries
that were transferred to Cleco Corporation in connection with our reorganization
into a holding company structure.
<TABLE>
<CAPTION>
As and for the As and for the
Year Ended Nine Months Ended
December 31, September 30,
--------------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995 1996 1997 1998 1999 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
(In thousands, except per share and dividend amounts)
Income Statement Data
---------------------
Operating Revenues $ 396,227 $ 437,121 $ 456,245 $ 515,175 $ 751,561 $ 618,855 $ 481,716
Net Income $ 46,651 $ 50,061 $ 50,402 $ 51,664 $ 55,636 $ 45,270 $ 49,290
Basic EPS $ 2.08 $ 2.23 $ 2.24 $ 2.30 $ 2.47 $ 2.01 $ 2.19
Diluted EPS $ 2.02 $ 2.16 $ 2.18 $ 2.24 $ 2.43 $ 2.01 $ 2.19
Cash dividends per $ 1.49 $ 1.53 $ 1.57 $ 1.61 $ 3.96 $ 2.63 $ 1.76
common share
Balance Sheet Data
------------------
Total Assets $1,266,034 $1,321,771 $1,361,044 $1,429,000 $1,418,145 $1,525,570 $1,310,646
Long-Term Debt, net $ 360,822 $ 340,859 $ 365,897 $ 343,042 $ 360,339 $ 360,322 $ 335,383
Redeemable Preferred Stock $ 6,610 $ 6,372 $ 6,120 $ 5,680 $ -0- $ -0- $ -0-
</TABLE>
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995 (1) 1996 (1) 1997 (1) 1998 (1) 1999 (1) 1999 (1) 2000 (2)
------- ------- ------- ------- ------- ------- ------------
Ratio of Earnings to Fixed
Charges....................... 3.49x 3.70x 3.74x 3.80x 3.89x 4.29x 4.40x
</TABLE>
---------------------
(1) Our ratio of earnings to fixed charges for periods prior to July 1, 1999
include the results of former subsidiaries that were transferred to Cleco
Corporation in connection with our reorganization into a holding company
structure.
(2) We believe that the ratios for the nine-month periods are not necessarily
indicative of the ratios for the twelve-month periods due to the seasonal
nature of our business.
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USE OF PROCEEDS
Unless we inform you otherwise in the prospectus supplement, we anticipate
using net proceeds from the sale of debt securities offered by this prospectus
for general corporate purposes. The purposes may include, but are not limited
to:
. working capital,
. capital expenditures,
. equity investments in existing and future projects,
. acquisitions, and
. the repayment or refinancing of our indebtedness, including intercompany
indebtedness.
DESCRIPTION OF THE DEBT SECURITIES
We may from time to time offer debt securities consisting of our unsecured
debentures, notes (including notes commonly known as medium-term notes) or other
evidences of indebtedness in one or more series at an aggregate initial offering
price not to exceed $200 million pursuant to this prospectus. We refer to these
debentures, notes or other evidences of indebtedness as the "debt securities."
The following description highlights the general terms and provisions of the
debt securities. When we offer debt securities in the future, the prospectus
supplement will explain the particular terms of those securities and the extent
to which these general provisions may apply.
The debt securities will be issued under an indenture, dated as of
October 1, 1988, between us and Bankers Trust Company, as supplemented and
amended. The Bank of New York is the current trustee under the indenture. Copies
of the indenture and the Agreement of Resignation, Appointment and Acceptance
under which the Bank of New York succeeded Bankers Trust Company as trustee
under the indenture are included among the exhibits to the registration
statement of which this prospectus is a part.
We have summarized selected provisions of the indenture below. The summary
is not complete. You should read the indenture filed as an exhibit to the
registration statement of which this prospectus is a part for any provisions
that may be important to you. In the summary below, we have included references
to section numbers of the indenture so that you can easily locate these
provisions. In describing the provisions of the indenture, we use the term
"corporation" as it is defined in the indenture. The indenture defines
"corporation" to include corporations, associations, companies, including
limited liability companies, and business trusts.
Unless otherwise indicated in a prospectus supplement, the covenants
contained in the indenture and the debt securities would not necessarily afford
holders of the debt securities protection in the event of a highly leveraged or
other transaction involving us, including a decline in our credit quality, that
may adversely affect holders.
GENERAL
The indenture does not limit the principal amount of unsecured debentures,
notes or other obligations that we may issue under it from time to time in one
or more series. The term "indenture securities," as used in this prospectus,
refers to all of these obligations issued and issuable under the indenture from
time to time and includes the debt securities. We may issue additional
indenture securities, in addition to the debt securities, in the future under
the indenture. At September 30, 2000, we had approximately $240 million
principal amount of indenture securities issued and outstanding under the
indenture.
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A prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
. the title and series of the debt securities;
. the total principal amount of the debt securities;
. any limit upon the aggregate principal amount of a series of debt
securities;
. the date on which the principal of the debt securities is payable;
. the interest rate that the debt securities will bear, if any, including
any method or formula to determine such rate, and the interest payment
dates for the debt securities;
. the place where the principal, premium, if any, and/or interest, if any,
on the debt securities will be payable;
. any optional redemption periods and the terms of that option;
. any sinking fund or other provisions that would obligate us to repurchase
or otherwise redeem the debt securities;
. the manner in which payments of principal, premium, if any, and/or
interest, if any, on the debt securities will be determined, if these
amounts will be based on an index, formula or other method;
. the currency in which payment of principal, premium, if any, and
interest, if any, on the debt securities will be payable, if other than
U.S. currency; and
. any other terms of the debt securities. (Section 301)
RANKING; LIMITATIONS ON MORTGAGES AND LIENS
The debt securities will rank equally with all of our other unsecured and
unsubordinated indebtedness. As of the date of this prospectus, we have issued
and outstanding $60 million aggregate principal amount of first mortgage bonds
issued under and secured by an Indenture of Mortgage, dated as of July 1, 1950,
between us and Bank One, Louisiana, N.A., formerly The National Bank of Commerce
in New Orleans, as trustee. In this prospectus, we sometimes refer to this
Indenture of Mortgage as the "mortgage indenture." Holders of the first
mortgage bonds issued under the mortgage indenture would have a prior claim on
certain of our material assets upon dissolution, winding up, liquidation or
reorganization by us.
So long as any indenture securities remain outstanding, the indenture
prohibits us from creating or permitting any mortgage, lien or similar
encumbrance, which we call a "mortgage," on any of our properties, unless we
secure the indenture securities equally and ratably with the mortgage being
created or permitted. This prohibition does not apply to:
. mortgages to secure first mortgage bonds issued under the mortgage
indenture;
. "permitted liens" as defined in the Twenty-Fifth Supplemental Indenture
to the mortgage indenture;
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. the following mortgages, provided that the mortgages do not apply to
property owned by us or one of our subsidiaries, other than unimproved
real property on which the construction or improvement is located:
. mortgages to secure or provide for the payment of the purchase
price or cost of property acquired, constructed or improved after
the date of the indenture that are created or assumed
- within 120 days after the acquisition or completion of
construction or improvement or
- within six months of the 120-day period, if pursuant to a
firm commitment for financing arrangements, or
. mortgages on any property existing at the time the property is
acquired;
. existing mortgages of a corporation merged with or into us or one of our
subsidiaries;
. mortgages of any corporation existing at the time it becomes one of our
subsidiaries;
. mortgages securing debt owed by one of our subsidiaries to us or to
another one of our subsidiaries;
. mortgages in favor of governmental bodies to secure advances or other
payments under any contract or statute or to secure indebtedness incurred
to finance the purchase price or cost of constructing or improving the
property subject to these mortgages, including mortgages to secure
pollution control or industrial revenue bonds;
. mortgages to secure loans to us or one of our subsidiaries maturing
within 12 months and made in the ordinary course of business;
. 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 of the property or to secure debt incurred to
provide funds for any of these costs;
. mortgages existing on the date of the indenture;
. certain mortgages typically incurred in the ordinary course of business,
including mortgages resulting from legal proceedings contested in good
faith;
. mortgages for extending, renewing or replacing indebtedness secured by
any of the mortgages described in the bullet point items above, so long
as
. the principal amount of the indebtedness secured by these mortgages
is not more than the principal amount of indebtedness secured at
the time of the extension, renewal or replacement plus any premiums
incurred in retiring the indebtedness and
. the mortgage for the extension, renewal or replacement is limited
to the original property or indebtedness;
. mortgages on any property of one of our subsidiaries, except that the
prohibition does apply if the property of the subsidiary is being used to
secure any of our indebtedness; or
. the issuance, assumption or guarantee by us or one of our subsidiaries of
ours of indebtedness secured by a mortgage up to an amount that, together
with all other secured indebtedness of ours that does not
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<PAGE>
fall under one of the above exceptions, is less than 5% of our
"consolidated net tangible assets," which consists of:
. the total amount of assets appearing on our balance sheet or
consolidated balance sheet, minus certain amounts for depreciation,
intangible assets and other items. (Section 1009)
MODIFICATION OF THE INDENTURE
We and the trustee may modify the indenture without the consent of holders
of indenture securities to do certain things, such as to establish the form and
terms of a series of indenture securities or to add to our covenants under the
indenture for the benefit of holders. (Section 901) Additionally, with certain
exceptions, we and the trustee may modify the indenture or the rights of the
holders of indenture securities if we obtain the consent of the holders of at
least 50% in principal amount of all outstanding indenture securities affected
by the modification. However, modifications of provisions of the indenture
involving the following items will not be effective against any holder without
the holder's consent:
. the principal, premium or interest payment terms of any indenture
security;
. waivers of past defaults or certain requirements for quorum and voting;
and
. with certain exceptions, percentage requirements for modification or
waiver of provisions of the indenture. (Section 902)
EVENTS OF DEFAULT
With respect to indenture securities of a particular series, the following
are events of default under the indenture:
. failure for three business days after payment is due to pay principal
and/or premium, if any, on any indenture security of the particular
series;
. failure for 30 days after payment is due to pay interest on any indenture
security of the particular series;
. failure for three business days after payment is due to make any sinking
fund installment required by the terms of a particular series of
indenture securities;
. with certain exceptions, violation of any covenant or warranty made by us
in the indenture that persists for at least 60 days after we have been
notified of the violation in the manner provided in the indenture by the
trustee or by the holders of 10% of the particular series;
. default under other mortgages or instruments or under other series of
indenture securities resulting in acceleration of indebtedness of over $5
million, unless the default is rescinded or discharged within 90 days
after we are given notice in the manner provided in the indenture
regarding the default from the trustee or from the holders of 25% of the
particular series;
. certain events of bankruptcy, insolvency or reorganization; and
. any other event of default provided with respect to a particular series
of indenture securities. (Section 501)
An event of default for a particular series of indenture securities does
not necessarily constitute an event of default for any other series of indenture
securities issued under the indenture.
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<PAGE>
If an event of default occurs and continues, either the trustee or the
holders of at least 25% of the series may declare those indenture securities due
and payable. Holders of a majority of a series of indenture securities may
waive past defaults for that series under certain circumstances. (Section 502)
We must furnish annually to the trustee a statement regarding performance by us
of certain of our obligations under the indenture and any related defaults.
(Section 1005)
SATISFACTION AND DISCHARGE OF INDENTURE
With certain exceptions, we will be discharged from our obligations under
the indenture with respect to any series of indenture securities by
. paying the principal, premium, if any, and interest, if any, on all of
the indenture securities of the series when these amounts become due and
payable, or
. delivering to the trustee all outstanding indenture securities of the
series for cancellation. (Section 401)
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The indenture allows us to consolidate or merge with another corporation or
sell, lease or convey all or substantially all of our assets to another
corporation only if
. we will be the surviving corporation, or the successor corporation is
incorporated in the United States and assumes all of our obligations
under the indenture securities and the indenture in a manner satisfactory
to the trustee and
. no default exists immediately after the transaction. (Section 801)
FORM, DENOMINATION AND REGISTRATION; BOOK-ENTRY SYSTEM
Unless otherwise indicated in a prospectus supplement, the debt securities
will be issued only in fully registered form, without coupons, in denominations
of $1,000 or integral multiples of $1,000. (Section 302) You will not have to
pay a service charge to transfer or exchange debt securities, but we may require
you to pay taxes or other governmental charges for exchanges involving transfers
under the terms of the indenture. (Section 305)
Unless otherwise indicated in a prospectus supplement, each series of debt
securities will be represented by one or more fully registered global notes,
which we call the "Global Notes." Each Global Note will be deposited with, or
on behalf of, The Depository Trust Company, as depository, and registered in the
name of the depository or a nominee of the depository. Unless and until it is
exchanged in whole or in part for debt securities in certificated form, no
Global Note may be transferred except as a whole by the depository or by a
nominee of the depository.
So long as the depository or its nominee is the registered owner of a
Global Note, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the debt securities represented by the
Global Note for all purposes under the indenture. Except as provided below,
beneficial owners of a Global Note representing debt securities will not be
entitled to have the debt securities registered in their names, will not receive
or be entitled to receive physical delivery of the debt securities in definitive
form and will not be considered the registered holders of the debt securities
under the indenture. Furthermore, no Global Note representing debt securities
will be exchangeable or transferable. Accordingly, each beneficial owner must
rely on the procedures of the depository and, if that beneficial owner is not a
"participant," as described below, on the procedures of the participant through
which the beneficial owner owns its interest, to exercise any rights of a holder
under the indenture. We understand that under existing industry practices, if we
were to request any action of holders or if an owner of a beneficial interest in
a Global Note representing debt securities were to desire to take any action
that a holder is entitled to take under the indenture,
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<PAGE>
. the depository would authorize the participants holding the relevant
beneficial interests to give or take the desired action, and
. the participants would authorize beneficial owners owning through the
participants to give or take the desired action or would otherwise act
upon the instructions of beneficial owners.
Each Global Note will be exchangeable for debt securities in certificated
form only if:
. the depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by us within 60
days, or
. we, in our sole discretion, determine that the Global Notes will be
exchangeable for certificated notes.
If one of the above events occurs, the Global Note or Global Notes will be
exchangeable for debt securities in certificated form of like tenor and of an
equal aggregate principal amount. The certificated debt securities will be
registered in the name or names of the beneficial owners of the Global Note or
Notes as the depository instructs the trustee. It is expected that instructions
may be based upon directions received by the depository from participants with
respect to ownership of beneficial interests in Global Notes.
The laws of some states may require that certain purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
your ability to own, transfer or pledge beneficial interests in Global Notes.
The following is based on information furnished by the depository:
The depository will act as securities depository for the debt securities.
The debt securities will be issued as fully registered securities registered in
the name of Cede & Co., the depository's partnership nominee. One fully
registered Global Note in an amount up to $200 million will be issued for each
issue of debt securities, each in the aggregate principal amount of the issue,
and will be deposited with the depository.
The depository 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
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. The depository holds securities that its "participants"
deposit with the depository. The depository 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 of the depository include
securities brokers and dealers, including the agents, banks, trust companies,
clearing corporations and certain other organizations.
The depository is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the depository's 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. The rules applicable to the
depository and its participants are on file with the SEC.
Purchases of debt securities under the depository's system must be made by
or through direct participants, which will receive a credit for those debt
securities on the depository's records. The ownership interest of each
beneficial owner of each debt security represented by a Global Note is, in turn,
to be recorded on the records of direct participants and indirect participants.
Beneficial owners of debt securities will not receive written confirmation from
the depository 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 participants or indirect
participants through which the beneficial owners entered into the transaction.
Transfers of ownership interests in a Global Note representing debt securities
are to be accomplished by entries made on the books of participants acting on
behalf of beneficial owners. Beneficial owners of a Global Note representing
debt
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securities will not receive debt securities in certificated form representing
their ownership interests in the debt securities, except in the event that use
of the book-entry system for those debt securities is discontinued.
To facilitate subsequent transfers, all Global Notes representing debt
securities that are deposited with, or on behalf of, the depository are
registered in the name of the depository's nominee, Cede & Co. The deposit of
Global Notes with or on behalf of the depository and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The depository has
no knowledge of the actual beneficial owners of the Global Notes representing
the debt securities. Instead, the depository's records reflect only the
identity of the direct participants to whose accounts the debt 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 the depository 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.
Neither the depository nor Cede & Co. will consent or vote with respect to
the Global Notes representing the debt securities. Under its usual procedures,
the depository mails an omnibus proxy to us as soon as possible after the
applicable record date. The omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those direct participants, identified in a listing attached to
the omnibus proxy, to whose accounts the debt securities are credited on the
applicable record date.
We will make principal, premium, if any, and/or interest, if any, payments
on the Global Notes representing the debt securities in immediately available
funds to the depository. The depository's practice is to credit direct
participants' accounts on the applicable payment date in accordance with their
respective holdings shown on the depository's records unless the depository has
reason to believe that it will not receive payment on the applicable payment
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 the applicable participant and not of
the depository, the trustee, any agent or us, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal, premium, if any, and/or interest, if any, to the depository will be
our responsibility and that of the trustee. Disbursement of payments to direct
participants will be the responsibility of the depository, and disbursement of
payments to the beneficial owners will be the responsibility of direct
participants and indirect participants.
If applicable, redemption notices must be sent to Cede & Co. If less than
all of the debt securities of like tenor and terms are being redeemed, the
depository's practice is to determine by lot the amount of the interest of each
direct participant in the issue to be redeemed.
A beneficial owner must give notice of any option to elect to have its debt
securities repaid by us, through its participant, to the trustee, and will
effect delivery of the applicable debt securities by causing the direct
participant to transfer the participant's interest in the Global Note
representing the debt securities, on the depository's records, to the trustee.
The requirement for physical delivery of debt securities in connection with a
demand for repayment will be deemed satisfied when the ownership rights in the
Global Note or Notes representing the debt securities are transferred by direct
participants on the depository's records.
The depository may discontinue providing its services as securities
depository with respect to the debt securities at any time by giving reasonable
notice to the trustee or us. Neither we, the trustee nor any underwriter or
agent will have any responsibility for the performance by the depository or its
participants or indirect participants of their obligations. In the event that a
successor securities depository is not obtained, debt securities in certificated
form are required to be printed and delivered. Similarly, we may decide to
discontinue use of the system of book-entry transfers through the depository or
a successor securities depository. In that event, debt securities in
certificated form will be printed and delivered.
The information in this section concerning the depository and the
depository's system has been obtained from sources that we believe to be
reliable, but we take no responsibility for the accuracy of the information.
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CONCERNING THE TRUSTEE
The Bank of New York is the trustee under the indenture. The trustee also
may act as a depository of funds for, make loans to, and perform other services
for us in the normal course of business, including acting as trustee under other
indentures of ours. The corporate trust office of the trustee is located at 101
Barclay Street, New York, New York 10286.
The trustee generally will be under no obligation to exercise any of its
rights or powers under the indenture at the request or direction of any of the
holders, unless the holders offer a reasonable indemnity to the trustee.
(Section 603) The holders of a majority of a series of indenture securities
generally may direct the time, method and place of conducting any proceedings
for any remedy available to the trustee, or exercising any trust or power
conferred on the trustee with respect to the indenture securities. (Section
512) The right of a holder to institute a proceeding under the indenture is
subject to certain conditions, but each holder has an absolute right to receive
payment of principal, premium, if any, and interest, if any, when due and to
institute suit for the enforcement of payment of these amounts. This right is
subject to certain limited exceptions in the case of interest. (Section 508)
Within 90 days after a default with respect to any series of indenture
securities, the trustee is required to give the holders notice of the default,
unless the default has been cured or waived. The trustee may withhold this
notice if it determines that it is in the best interest of the holders to do so,
but the trustee may not withhold notice in this manner with respect to a default
in the payment of principal, premium, if any, and/or interest, if any, on any
indenture security. (Section 602)
The trustee may resign from its duties with respect to the indenture at any
time. We may remove the trustee in certain circumstances, and the holders of a
majority of a series of indenture securities may remove the trustee with respect
to that series. If the trustee resigns, is removed or becomes incapable of
acting as trustee or a vacancy occurs in the office of the trustee for any
reason, a successor trustee will be appointed in accordance with the provisions
of the indenture. (Article Six)
The indenture contains the provisions required by the Trust Indenture Act
of 1939 with reference to the disqualification of the trustee if the trustee has
or acquires any "conflicting interest," as that term is defined in the
indenture. (Section 608) In the event the trustee becomes a creditor of ours,
the indenture also contains certain limitations on the right of the trustee to
obtain payment of claims in certain cases, or to realize on certain property
received by it in respect of any claims as security or otherwise. (Section 613)
PLAN OF DISTRIBUTION
We may sell debt securities in and outside the United States:
. through an underwriter or underwriters,
. through dealers,
. through agents,
. directly to purchasers, including our affiliates, or
. through a combination of any of these methods.
We may authorize underwriters, dealers and agents to solicit offers by
institutions to purchase debt securities from us pursuant to delayed delivery
contracts providing for payment and delivery on a specified date. If we elect
to use delayed delivery contracts, we will describe the date of delivery, the
conditions of the sale and the commissions payable for solicitation of such
contracts in the prospectus supplement.
We will describe the terms of any offering of debt securities in the
prospectus supplement, including:
. the method of distribution,
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. the name or names of any underwriters, dealers, purchasers or agents, and
any managing underwriter or underwriters,
. the purchase price of the debt securities and the proceeds we receive
from the sale,
. any underwriting discounts, agency fees or other form of underwriters'
compensation,
. any discounts and concessions allowed, reallowed or paid to dealers or
agents, and
. the expected time of delivery of the offered debt securities.
We may change the initial public offering price and any discount or
concessions allowed or reallowed to dealers from time to time.
If we use underwriters to sell our debt securities, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters will be obligated to
purchase all of the offered debt securities if any are purchased. In connection
with the sale of debt securities, underwriters may receive compensation from us
or from purchasers of debt securities for whom they may act as agents in the
form of discounts, concessions or commissions. Underwriters may sell debt
securities to or through dealers, and dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
If we use a dealer to sell debt securities, we will sell the debt
securities to the dealer as principal. The dealer may then resell the debt
securities to the public at varying prices to be determined by the dealer at the
time of resale. These dealers may be deemed underwriters, as such term is
defined in the Securities Act of 1933, of the debt securities they offer and
sell. If we elect to use a dealer to sell debt securities, we will provide the
name of the dealer and the terms of the transaction in the prospectus
supplement.
We may sell the debt securities directly. In this case, no underwriters or
agents would be involved. We may also sell the debt securities through agents
designated from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the debt securities, and we will describe
any commissions payable to the agent. Unless we inform you otherwise in the
prospectus supplement, any agent will agree to use its reasonable best efforts
to solicit purchases for the period of its appointment.
Debt securities may also be offered and sold in connection with a
remarketing upon their purchase, in accordance with a redemption or repayment by
their terms or otherwise by one or more remarketing firms acting as principals
for their own accounts or as our agents. We will identify any remarketing firm,
the terms of any remarketing agreement and the compensation to be paid to a
remarketing firm in the prospectus supplement. Remarketing firms may be deemed
underwriters under the Securities Act of 1933.
Underwriters, agents, dealers and some purchasers participating in the
distribution of debt securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of debt securities may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933.
Unless we inform you otherwise in the prospectus supplement, none of our
directors, officers or employees will solicit or receive a commission in
connection with direct sales of debt securities, although these persons may
respond to inquiries by potential purchasers and perform ministerial and
clerical work in connection with any such direct sales.
We may enter into agreements with the underwriters, agents, purchasers,
dealers or remarketing firms who participate in the distribution of our debt
securities that will require us to indemnify them against specified liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments that they or any person controlling them may be required to make for
those liabilities. Underwriters, agents or dealers may be our
13
<PAGE>
customers. They may also engage in transactions with us or perform services for
us or for our affiliates in the ordinary course of business.
Each series of debt securities will be a new issue with no established
trading market. We may elect to list any series of debt securities on an
exchange. However, we are not obligated to do so. It is possible that one or
more underwriters may make a market in a series of debt securities. However,
they will not be obligated to do so and may discontinue market making at any
time without notice. We cannot assure you that a liquid trading market for the
debt securities will develop.
In connection with an offering, the underwriters or agents may purchase and
sell debt securities in the open market. These transactions may include over-
allotment and stabilizing transactions and purchases to cover syndicate short
positions created in connection with the offering. Stabilizing transactions
consist of bids or purchases for the purpose of preventing or retarding a
decline in the market price of the debt securities. Syndicate short positions
involve the sale by the underwriters or agents of a greater number of debt
securities than they are required to purchase from us in the offering. The
underwriters also may impose a penalty bid, in which selling concessions allowed
to syndicate members or other broker dealers in respect of the debt securities
sold in the offering for their account may be reclaimed by the syndicate if the
debt securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the debt securities, which may be higher than the price that
might otherwise prevail in the open market, and these activities, if commenced,
may be discontinued at any time. These transactions may be effected on the
NYSE, in the over-the-counter market or otherwise.
WHERE YOU CAN FIND MORE INFORMATION
We file reports and other information with the SEC. You may read and copy
any document we file with the SEC at the SEC's Public Reference Room located at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048. You
may obtain further information regarding the operation of the SEC's Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are also
available to the public on the SEC's Internet site located at
http://www.sec.gov, which contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC.
The SEC allows us to "incorporate by reference" into this prospectus
information we file with the SEC. This means we can disclose important
information to you by referring you to the documents containing the information.
The information we incorporate by reference is considered to be part of this
prospectus, unless we update or supersede that information by the information
contained in this prospectus, the related prospectus supplement, a pricing
supplement or information that we file subsequently that is incorporated by
reference into this prospectus. We are incorporating by reference into this
prospectus the following documents that we have filed with the SEC, and our
future filings with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until the offering of the debt securities is
completed or after the date of this initial registration statement and before
the effectiveness of the registration statement:
. Our Registration Statement on Form 10 dated and filed with the SEC on
November 15, 2000, as amended by Form 10/A dated and filed with the SEC
on December 15, 2000.
This prospectus is part of a registration statement we have filed with the
SEC relating to the debt securities. As permitted by SEC rules, this prospectus
does not contain all of the information included in the registration statement
and the accompanying exhibits and schedules we file with the SEC. You should
read the registration statement and the exhibits and schedules for more
information about us and the debt securities. The registration statement,
exhibits and schedules are also available at the SEC's Public Reference Room or
through its Internet site.
14
<PAGE>
You may also obtain a copy of our filings with the SEC at no cost by
writing to or telephoning us at:
Cleco Utility Group Inc.
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
Attn: Corporate Secretary
(318) 484-7400
VALIDITY OF SECURITIES
The validity of the debt securities will be passed upon for us by Baker
Botts L.L.P., Houston, Texas. Phelps Dunbar, L.L.P., New Orleans, Louisiana,
will pass on all matters of Louisiana law in this connection. Any underwriters
or agents will be advised about the validity of the debt securities by their own
counsel.
EXPERTS
The financial statements incorporated in this prospectus by reference to
our Registration Statement on Form 10 for the year ended December 31, 1999 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
15
<PAGE>
<TABLE>
============================================================= ============================================================
<S> <C>
No dealer, salesperson or other person is authorized to [LOGO]
give any information or to represent anything not contained
in this prospectus. You must not rely on any unauthorized
information or representations. This prospectus is an offer
to sell only the debt securities offered hereby but only
under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus
is current only as of its date.
$100,000,000
_______________
TABLE OF CONTENTS CLECO UTILITY GROUP INC.
PAGE
----
PROSPECTUS SUPPLEMENT
About This Prospectus Supplement................... S-1 Medium-Term Notes
Risk Factors....................................... S-1 Due One Year or More
Description of the Notes........................... S-2 From Date of Issue
United States Federal Income Taxation.............. S-14
Plan of Distribution............................... S-22
Validity of the Notes.............................. S-23
PROSPECTUS
About this Prospectus.............................. 1
Disclosure Regarding Forward-
Looking Statements............................... 2
The Company........................................ 3
Ratio of Earnings to Fixed Charges................. 4 MERRILL LYNCH & CO.
Use of Proceeds.................................... 5 BANC ONE CAPITAL MARKETS, INC.
Description of the Debt Securities................. 5 SALOMON SMITH BARNEY
Plan of Distribution............................... 12
Where You Can Find More Information................ 14
Validity of Securities............................. 15
Experts............................................ 15
============================================================= ============================================================
</TABLE>
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We estimate that expenses in connection with the offering described in this
registration statement will be as follows:
Securities and Exchange Commission registration fee........ $ 50,000 *
Blue sky fees and expenses................................. $ 10,000
Fees and expenses of Trustees.............................. $ 10,000
Fees and expenses of Trustees' counsel..................... $ 10,000
Fees and expenses of Company counsel....................... $ 90,000
Public accountants' fees and expenses...................... $ 20,000
Printing expenses.......................................... $ 5,000
Rating agency fees......................................... $ 50,000
Miscellaneous expenses..................................... $ 5,000
------------
Total Expenses............................................. $250,000
===========
______________
* Actual; all other expenses are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 83 of the Business Corporation Law of the State of Louisiana
("LBCL") provides that a corporation may indemnify any person against whom an
action, suit or proceeding is brought or threatened, by reason of the fact that
he is or was a director, officer, employee or agent of the corporation or was
serving at the request of the corporation as a director, officer, employee or
agent of another business, corporation, partnership or other enterprise, against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of actions by
or in the right of the corporation, the indemnity is limited to expenses,
including attorneys' fees and amounts paid in settlement not exceeding, in the
judgment of the board of directors, the estimated expense of litigating the
action to conclusion, actually and reasonably incurred in connection with a
defense or settlement; provided that no indemnity may be made in respect of any
matter in which the person shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
willful or intentional misconduct in performance of his duty to the corporation
unless and only to the extent that the court determines upon application that
such person is fairly and reasonably entitled to such indemnity. To the extent
a person has been successful on the merits or otherwise in defense of any
action, the statute provides that he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith. Section 83
also provides for, among other things, procedures for indemnification;
advancement of expenses; nonexclusivity of the provisions of Section 83 with
respect to indemnification and advancement of expenses; and insurance, including
self-insurance, with respect to liabilities incurred by directors, officers and
others.
Article IV of our Bylaws provides that we shall indemnify any person who
was or is, or is threatened to be made, a party to or otherwise involved in any
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or other proceeding, whether
civil, criminal, administrative or investigative (we refer to any such
threatened, pending or completed proceeding as a "Proceeding") by reason of the
fact that he is or was one of our directors, officers, employees or agents or is
or was serving at our request as a director, officer, employee or agent of
another business, foreign or nonprofit corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise (whether the basis of his
involvement in such Proceeding is alleged action in an official capacity or in
any other capacity while serving as such), to the fullest extent permitted by
applicable law, from and against expenses, including attorney's fees, judgments,
fines, amounts paid or to be paid in settlement, liability and loss, ERISA
excise taxes, actually and reasonably incurred by him or on his behalf or
suffered in connection with such Proceeding or any claim, issue or matter
therein; provided,
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<PAGE>
however, that, subject to certain exceptions set forth therein, we shall
indemnify any such person claiming indemnity in connection with a Proceeding
initiated by such person only if such Proceeding was authorized by the board of
directors.
The Bylaws further provide that:
. we will from time to time pay, in advance of final disposition, all
Expenses (as defined therein) incurred by or on behalf of any person
claiming indemnity thereunder in respect of any Proceeding;
. the right to indemnification provided therein is a contract right and no
amendment, alteration or repeal of the Bylaws will restrict the
indemnification rights granted by the Bylaws as to any person claiming
indemnification with respect to acts, events and circumstances that
occurred, in whole or in part, before such amendment, alteration or
repeal;
. any such indemnification may continue as to any person who has ceased to
be a director, officer, employee or agent and may inure to the benefit
of the heirs, executors and legal representative of such person; and
. the rights to indemnification and to receive advancement of Expenses
contemplated by Article IV of the Bylaws are not exclusive of any other
rights to which any person may at any time be otherwise entitled,
provided that such other indemnification may not apply to a person's
willful or intentional misconduct.
The Bylaws also set forth certain procedural and evidentiary standards
applicable to the enforcement of a claim thereunder.
The Bylaws also provide that we:
. may procure or maintain insurance or other similar arrangement, at our
expense, to protect ourselves and any director, officer, employee or
agent of ours or any other corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss
asserted against or incurred by such person, whether or not we would
have the power to indemnify such person against such expense or
liability; and
. shall indemnify our officers and directors to the extent they are not
covered by the insurance, whether or not such persons would otherwise be
entitled to indemnification under the Bylaws, as provided in policies
covering liabilities up to $85 million incurred by directors and
officers in their capacities as such, and has fiduciary and employee
benefit liability insurance policies covering liabilities up to $65
million incurred by our directors, officers and certain other employees
in connection with the administration of our employee benefit plans.
Section 24(C)(4) of the LBCL provides that a corporation may eliminate or
limit the liability of a director or officer to the corporation or its
shareholders for monetary damages for breach of fiduciary duty, except for
liability:
. for any breach of the director's or officer's duty of loyalty to the
corporation or its shareholders;
. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
. under Section 92(D) of the LBCL relating to unlawful dividends and other
unlawful distributions, payments or returns of assets; and
. for any transaction from which the director or officer derived an
improper personal benefit.
II-2
<PAGE>
Our Articles of Incorporation include a provision consistent with Section
24(C)(4) of the LBCL. Such provision further provides that
. if the LBCL is subsequently amended to authorize action further
eliminating or limiting a director's or officer's liability, such
liability will be eliminated or limited to the fullest extent permitted
by such law, as so amended, and
. if such provision limiting or eliminating liability is repealed or
modified, the right or protection of a director or officer of the
Company existing at the time of such repeal or modification will not be
affected thereby.
ITEM 16. EXHIBITS.
See Index to Exhibits at page II-8.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the registrant need not file a post-effective amendment
to include the information required to be included by subsection (i) or (ii)
above if such information is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof, and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13 (a) or Section 15 (d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
II-3
<PAGE>
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pineville, State of Louisiana, on December 19, 2000.
CLECO UTILITY GROUP INC.
(Registrant)
By: /s/ DAVID M. EPPLER
-------------------------------------------------
David M. Eppler
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael P. Prudhomme and Kathleen F. Nolen, and
each of them severally, his true and lawful attorney or attorneys-in-fact and
agent or agents, with full power to act with or without the other and with full
power of substitution and resubstitution, to execute in his name, place and
stead, in any and all capacities, any or all amendments (including pre-effective
and post-effective amendments) to this Registration Statement and any
registration statement for the same offering filed pursuant to Rule 462 under
the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them full power and authority, to do and perform in the name and on behalf of
the undersigned, in any and all capacities, each and every act and thing
necessary or desirable to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying,
approving and confirming all that said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DAVID M. EPPLER President, Chief Executive December 19, 2000
--------------------------- Officer and Director
(David M. Eppler) (Principal Executive Officer)
/s/ THOMAS J. HOWLIN Chief Financial Officer December 19, 2000
--------------------------- (Principal Financial Officer
(Thomas J. Howlin) and Principal Accounting
Officer)
II-5
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ SHERIAN G. CADORIA Director December 15, 2000
---------------------------
(Sherian G. Cadoria)
/s/ RICHARD B. CROWELL Director December 15, 2000
---------------------------
(Richard B. Crowell)
/s/ J. PATRICK GARRETT Director December 15, 2000
---------------------------
(J. Patrick Garrett)
/s/ F. BEN JAMES, JR. Director December 15, 2000
---------------------------
(F. Ben James, Jr.)
/s/ ELTON R. KING Director December 15, 2000
---------------------------
(Elton R. King)
/s/ A. DE LOACH MARTIN, JR. Director December 15, 2000
---------------------------
(A. DeLoach Martin, Jr.)
/s/ ROBERT T. RATCLIFF Director December 15, 2000
---------------------------
(Robert T. Ratcliff)
/s/ EDWARD M. SIMMONS Director December 15, 2000
---------------------------
(Edward M. Simmons)
/s/ WILLIAM H. WALKER, JR. Director December 15, 2000
---------------------------
(William H. Walker, Jr.)
II-6
<PAGE>
The Registrant reasonably believes that the security ratings to be assigned
to the securities registered hereunder will make the securities "investment
grade securities" pursuant to Transaction Requirement B.2 of Form S-3, prior to
the sale of such securities.
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEC FILE OR REGISTRATION
REGISTRATION STATEMENT EXHIBIT
NUMBER OR REPORT NUMBER
--------------- ------------------- ------------------
<S> <C> <C> <C> <C>
1(a)(1)* Form of Selling Agency Agreement to be entered into
by and among the Company and the Agents named therein
2* Joint Agreement of Merger of Cleco Utility Group
Inc. with and Into Cleco Power LLC
4(a)(1)** Indenture dated as of October 1, 1988 between the 1-5663 8-K (10/26/88) 4(b)
Company and Bankers Trust Company, as Note Trustee
4(a)(2)* First Supplemental Indenture, dated as of December
1, 2000, between Cleco Utility Group Inc. and The
Bank of New York
4(a)(3)* Form of Second Supplemental Indenture to be entered
into by and between Cleco Utility Group and The Bank
of New York
4(a)(4)** Agreement of Resignation, Appointment and Acceptance 333-02895 S-3 (4/29/96) 4(a)(2)
dated as of April 1, 1996
4(c)* Form of Note (included in the agreement filed as
Exhibit 4(a)(3))
4(d)* Form of Book-Entry Note (included in the agreement
filed as Exhibit 4(a)(3))
5(a)* Opinion of Baker Botts L.L.P.
12* Statement of Computation of Ratio of Earnings to
Fixed Charges
23(a) Consent of PricewaterhouseCoopers LLP
23(b)* Consent of Baker Botts L.L.P. (included in the
opinion filed as Exhibit 5(a))
24 Power of Attorney (included on page II-5 of this
registration statement)
26(a)* Statement of Eligibility of Note Trustee Form on T-1
---------------------------------
*To be filed by amendment.
**Incorporated herein by reference as indicated.
</TABLE>
II-8
