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Registration No. 33-49577
Filed Pursuant to Rule 424(b)(5)
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 18, 1993)
$200,000,000
Central Power and Light Company
6 5/8% FIRST MORTGAGE BONDS DUE 2005
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Interest payable January 1 and July 1
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THE FIRST MORTGAGE BONDS, SERIES KK, 6 5/8% (THE "NEW BONDS") WILL MATURE ON
JULY 1, 2005. THE NEW BONDS MAY NOT BE REDEEMED BY THE COMPANY PRIOR TO
MATURITY AND ARE NOT SUBJECT TO ANY SINKING FUND. THE NEW BONDS WILL BE
ISSUED ONLY IN FULLY REGISTERED FORM IN DENOMINATIONS OF $1,000 AND
INTEGRAL MULTIPLES THEREOF. SEE "SUPPLEMENTAL DESCRIPTION OF THE
NEW BONDS".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PRICE 99.815% AND ACCRUED INTEREST
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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
------------ -------------- -------------
<S> <C> <C> <C>
Per New Bond............................. 99.815% .650% 99.165%
Total.................................... $199,630,000 $1,300,000 $198,330,000
</TABLE>
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(1) Plus accrued interest from July 1, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company, estimated at
$100,000.
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The New Bonds are offered, subject to prior sale, when, as and if accepted
by the Underwriters and subject to approval of certain legal matters by Sidley &
Austin, counsel for the Underwriters. It is expected that delivery of the New
Bonds will be made on or about July 19, 1995, at the office of Morgan Stanley &
Co. Incorporated, New York, N.Y., against payment therefor in immediately
available funds.
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MORGAN STANLEY & CO.
Incorporated
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
July 11, 1995
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW BONDS AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IT IS EXPECTED THAT DELIVERY OF THE NEW BONDS WILL BE MADE AGAINST PAYMENT
THEREFOR ON OR ABOUT THE DATE SPECIFIED IN THE LAST PARAGRAPH OF THE COVER PAGE,
WHICH IS THE SIXTH BUSINESS DAY FOLLOWING THE DATE HEREOF (SUCH SETTLEMENT CYCLE
BEING HEREIN REFERRED TO AS "T+6"). PURCHASERS OF NEW BONDS SHOULD NOTE THAT THE
ABILITY TO SETTLE SECONDARY MARKET TRADES OF THE NEW BONDS EFFECTED ON THE DATE
HEREOF AND THE NEXT TWO SUCCEEDING BUSINESS DAYS MAY BE EFFECTED BY THE T+6
SETTLEMENT. SEE "UNDERWRITERS".
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THIS
PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS, NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
PROSPECTUS SUMMARY
The following material is qualified in its entirety by, and should be read
in conjunction with, the information appearing elsewhere in this Prospectus
Supplement and the accompanying Prospectus and in the documents, financial
statements and other information incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus.
THE OFFERING
Company.......................... Central Power and Light Company
Amount and Type of Securities.... $200,000,000 First Mortgage Bonds, Series KK
Interest Payment Dates........... January 1 and July 1, commencing January 1,
1996
Maturity Date.................... July 1, 2005
Redemption....................... The New Bonds may not be redeemed prior to
maturity.
Security......................... Secured, together with all other outstanding
First Mortgage Bonds, by a mortgage on
substantially all of the Company's
properties.
Use of Proceeds.................. To provide for the redemption of the
Company's First Mortgage Bonds, Series Z,
9 3/8%, Due December 1, 2019, to repay
short-term debt, to provide working
capital and for other general corporate
purposes.
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE YEAR ENDED DECEMBER 31,
MONTHS ENDED ----------------------------------------
MARCH 31, 1995 1994 1993 1992
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(UNAUDITED)
<S> <C> <C> <C> <C>
Operating Revenues.................................................. $1,082,032 $1,217,979 $1,223,528 $1,113,423
Operating Income.................................................... 249,863 256,251 190,079 266,665
Net Income Before Cumulative Effect of Changes in Accounting
Principles........................................................ 196,816 205,439 145,130 218,511
Cumulative Effect of Changes in Accounting Principles............... -- -- 27,295 --
Net Income.......................................................... 196,816 205,439 172,425 218,511
Net Utility Plant................................................... 3,462,012 3,469,826 3,453,306 3,406,088*
</TABLE>
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* For comparison purposes, certain financial statement items which are
components of Net Utility Plant have been reclassified to conform to the
current presentation.
<TABLE>
<CAPTION>
CAPITALIZATION AT
MARCH 31, 1995
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(UNAUDITED)
<S> <C> <C>
Long-Term Debt.......................................................................................... $1,468,001 46.9%
Preferred Stock......................................................................................... 250,351 8.0%
Common Equity........................................................................................... 1,408,821 45.1%
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$3,127,173 100.0%
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</TABLE>
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus
Supplement.
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
3. The Company's Current Report on Form 8-K dated April 5, 1995.
THE COMPANY
Central Power and Light Company, a Texas corporation (the "Company"), is a
public utility company engaged in the production, purchase, transmission,
distribution and sale of electricity in South Texas. Central and South West
Corporation ("CSW"), a registered public utility holding company under the
Public Utility Holding Company Act of 1935, owns all of the issued and
outstanding Common Stock of the Company. The Company's executive offices are
located at 539 North Carancahua Street, Corpus Christi, Texas 78401-2802,
telephone number (512) 881-5300.
RATIO OF EARNINGS TO FIXED CHARGES:
<TABLE>
<CAPTION>
TWELVE
MONTHS ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ------------------------------------------------
1995 1994 1993 1992 1991 1990
- ------------ ---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
2.70 3.24 2.69 3.23 3.18 3.11
</TABLE>
For computation of the ratio: (i) earnings consist of operating income plus
Federal income taxes, deferred income taxes and investment tax credits, other
income and deductions, allowance for funds (both borrowed and equity) used
during construction, STP carrying costs and mirror CWIP amortization, and (ii)
fixed charges consist of interest on long-term debt and short-term debt, and
other interest charges.
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds offered hereby will be used
by the Company to redeem all of the Company's outstanding First Mortgage Bonds,
Series Z, 9 3/8%, Due December 1, 2019 ("Series Z Bonds"). As of July 1, 1995,
$139,165,000 aggregate principal amount of Series Z Bonds were outstanding. The
Series Z Bonds will be redeemed at the regular redemption price of 106.98% of
the principal amount of such bonds or at par in connection with debt retirement
redemptions, plus accrued and unpaid interest to the date of redemption. The
balance of the proceeds will be used to repay outstanding short-term borrowings
incurred or expected to be incurred primarily to finance construction
expenditures, to provide working capital and for other general corporate
purposes. At June 30, 1995, the Company had outstanding approximately $145
million of short-term debt with a weighted average interest cost of
approximately 6.05%.
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SUPPLEMENTAL DESCRIPTION OF THE NEW BONDS
The following description of certain terms of the New Bonds offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the New Bonds set forth in the
accompanying Prospectus.
GENERAL
The New Bonds will mature on July 1, 2005, and will bear interest at the
rate of 6 5/8% per annum payable on January 1 and July 1, commencing January 1,
1996. The New Bonds will be issued only in fully registered form in
denominations of $1,000 and integral multiples thereof, and are not subject to
any sinking fund.
The New Bonds offered hereby will be authenticated under the Indenture
against $333,333,333 of unused net expenditures for bondable property. As of May
31, 1995, such unused net expenditures aggregated approximately $587,407,754.
REDEMPTION
The New Bonds offered hereby may not be redeemed by the Company prior to
maturity.
MAINTENANCE AND RENEWAL
The New Bonds are entitled to the covenants of the Indenture described in
the Prospectus under the heading "Description of the New Bonds -- Maintenance
and Renewal" and the reference to "Series O through II" in the second sentence
of such section shall instead refer to "Series O through KK".
ISSUANCE OF ADDITIONAL BONDS
The Indenture does not fix an overall limitation on the aggregate principal
amount of Bonds of all series that may be outstanding thereunder. An aggregate
amount of $1,261,630,000 in principal amount of Bonds was outstanding under the
Indenture on May 31, 1995.
Based on the unused net expenditures for bondable property test described
in the accompanying Prospectus, which is currently the most restrictive of the
Indenture's issuance tests, the Company, as of May 31, 1995 could have issued
approximately $352,444,652 principal amount of additional Bonds. At May 31,
1995, the Company had approximately $91,770,000 principal amount of previously
retired Bonds available for authentication of additional Bonds and such unused
net expenditures aggregated approximately $587,407,754.
UNDERWRITERS
Under the terms and subject to the conditions in an Underwriting Agreement
dated the date hereof, the Underwriters named below have severally agreed to
purchase, and the Company has agreed to sell to them, severally, the respective
principal amounts of the New Bonds set forth opposite their respective names
below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NEW BONDS
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<S> <C>
Morgan Stanley & Co. Incorporated............................................... $ 68,000,000
Goldman, Sachs & Co. ........................................................... 66,000,000
J.P. Morgan Securities Inc...................................................... 66,000,000
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Total................................................................. $200,000,000
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</TABLE>
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The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the New Bonds are subject to the
approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are committed to take and pay for all of the New
Bonds if any are taken.
The Underwriters have advised the Company that they propose to offer part
of the New Bonds directly to the public at the public offering price set forth
on the cover page of this Prospectus Supplement and part to certain dealers at a
price that represents a concession not in excess of .400% of the principal
amount of the New Bonds. Any Underwriter may allow, and such dealers may
reallow, a discount not in excess of .250% of the principal amount of the New
Bonds to certain other dealers. After the initial public offering of the New
Bonds, the offering prices and other selling terms may from time to time be
varied by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company does not intend to apply for listing of the New Bonds offered
hereby on a national securities exchange, but has been advised by the
Underwriters that they presently intend to make a market in the New Bonds, as
permitted by applicable laws and regulations. The Underwriters are not
obligated, however, to make a market in the New Bonds and any such market making
may be discontinued at any time at the sole discretion of the Underwriters.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the New Bonds.
In the ordinary course of their respective businesses, Morgan Stanley & Co.
Incorporated has from time to time performed investment banking services for CSW
and certain of its affiliates, and affiliates of J.P. Morgan Securities Inc.
have engaged, and may in the future engage, in commercial and investment banking
transactions with the Company and affiliates of the Company. Sidley & Austin,
counsel for the Underwriters, has represented CSW, the Company and other
affiliates of CSW from time to time in connection with certain legal matters.
It is expected that delivery of the New Bonds will be made against payment
therefor on or about the date specified in the last paragraph of the cover page
hereof, which is the sixth business day following the date hereof. Under Rule
15c6-1 recently adopted by the Commission under the Exchange Act, trades in the
secondary market generally are required to settle in three business days, unless
the parties to any such trade expressly agree otherwise. Accordingly, purchasers
who wish to trade New Bonds on the date hereof or the next two succeeding
business days will be required, by virtue of the fact that the New Bonds
initially will settle in T+6, to specify alternate settlement arrangements to
prevent a failed settlement.
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