<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 19, 1994)
$140,000,000
THE CONNECTICUT LIGHT AND POWER COMPANY
FIRST AND REFUNDING MORTGAGE 7 7/8% BONDS, 1994 SERIES D
DUE OCTOBER 1, 2024
------------------------
Interest payable April 1 and October 1
------------------------
THE FIRST AND REFUNDING MORTGAGE 7 7/8% BONDS, 1994 SERIES D (1994 SERIES D
BONDS) MATURE ON OCTOBER 1, 2024. INTEREST ON THE 1994 SERIES D BONDS IS
PAYABLE SEMI-ANNUALLY ON APRIL 1 AND OCTOBER 1, BEGINNING APRIL 1, 1995. THE
1994 SERIES D BONDS WILL NOT BE REDEEMABLE PRIOR TO MATURITY. THE 1994
SERIES D BONDS WILL BE REPAYABLE ON OCTOBER 1, 2001, AT THE OPTION OF THE
REGISTERED HOLDER OR HOLDERS THEREOF, AT 100% OF THEIR PRINCIPAL AMOUNT
TOGETHER WITH INTEREST PAYABLE TO THE DATE OF REPAYMENT. THE REPAYMENT
OPTION MAY BE EXERCISED BY A REGISTERED HOLDER OF 1994 SERIES D BONDS
FOR LESS THAN THE ENTIRE PRINCIPAL AMOUNT OF THE 1994 SERIES D BOND,
PROVIDED THE PRINCIPAL AMOUNT WHICH IS TO BE REPAID TO SUCH HOLDER IS
EQUAL TO $1,000 OR AN INTEGRAL MULTIPLE OF $1,000. SUCH ELECTION,
WHICH IS IRREVOCABLE WHEN MADE, MUST BE MADE WITHIN THE PERIOD
COMMENCING ON AUGUST 1, 2001 AND ENDING ON SEPTEMBER 1, 2001. SEE
"SUPPLEMENTAL DESCRIPTION OF THE 1994 SERIES D BONDS--REPAYMENT
AT OPTION OF HOLDER" HEREIN. THE 1994 SERIES D BONDS WILL BE
REPRESENTED BY A GLOBAL SECURITY REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (DTC) OR ITS NOMINEE. BOOK-ENTRY
INTERESTS IN THE GLOBAL SECURITY WILL BE SHOWN ON, AND
TRANSFERS THEREOF WILL BE EFFECTED ONLY THROUGH, RECORDS
MAINTAINED BY DTC OR ITS NOMINEE.
------------------------
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. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
PRICE 100% AND ACCRUED INTEREST, IF ANY
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(3)
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Bond........................... 100.000% .235% 99.765%
Total.............................. $140,000,000 $329,000 $139,671,000
<FN>
- ---------------
(1) Plus accrued interest, if any, from date of original issuance.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company estimated at $170,000.
</TABLE>
------------------------
The 1994 Series D Bonds are offered by the Underwriter, subject to prior
sale, when, as and if issued by the Company and accepted by the Underwriter and
subject to approval of certain legal matters by Winthrop, Stimson, Putnam &
Roberts, counsel for the Underwriter. It is expected that delivery of the 1994
Series D Bonds will be made on or about October 12, 1994 through the book-entry
facilities of The Depository Trust Company, against payment therefor in New York
funds.
------------------------
MORGAN STANLEY & CO.
INCORPORATED
September 28, 1994
<PAGE>
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES HEREBY OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
- --------------------------------------------------------------------------------
SUMMARY INFORMATION
The following material is qualified in its entirety by, and should be
considered in conjunction with, the information and financial statements
appearing elsewhere in this Prospectus Supplement and the accompanying
Prospectus, and in the documents and information incorporated by
reference.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered ........... $140,000,000 principal amount of First and Refunding
Mortgage 7 7/8% Bonds, 1994 Series D (1994 Series D Bonds).
Maturity ..................... October 1, 2024.
Interest Payment Dates ....... April 1 and October 1.
</TABLE>
SELECTED FINANCIAL INFORMATION
(THOUSANDS, EXCEPT PERCENTAGES AND RATIOS)
<TABLE>
<CAPTION>
12 MONTHS
YEAR ENDED DECEMBER 31, ENDED
-------------------------------------- AUGUST 31,
1991 1992 1993 1994
---------- ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Income Summary:
Operating Revenues....................... $2,275,737 $2,316,451 $2,366,050 $2,342,901
Operating Income......................... $ 323,835 $ 287,811 $ 240,095 $ 285,541
Income before cumulative effect of
accounting change..................... $ 240,818 $ 206,714 $ 143,702 $ 207,882
Cumulative effect of accounting change
(a)................................... -- -- $ 47,747 --
Net Income............................... $ 240,818 $ 206,714 $ 191,449 $ 207,882
Total Assets (end of period)............... $5,338,441 $5,582,806 $6,397,380(b) $6,274,527
</TABLE>
<TABLE>
<CAPTION>
AT AUGUST 31, 1994
-------------------------------------------
(UNAUDITED)
AS % OF ADJUSTED
ACTUAL ADJUSTED (C) CAPITALIZATION
---------- ------------ -------------
<S> <C> <C> <C>
Capitalization Summary:
Long-Term Debt (including current maturities) ....... $1,854,757 $ 1,824,757 48.2%
Preferred Stock Subject to Mandatory Redemption
(including portion to be redeemed within one
year) ............................................ 230,000 230,000 6.1%
Preferred Stock Not Subject to Mandatory Redemption
(including portion to be redeemed within one
year) ............................................ 166,200 166,200 4.4%
Common Stockholder's Equity ......................... 1,564,972 1,564,972 41.3%
---------- ------------ ------
Total Capitalization ................................ $3,815,929 $ 3,785,929 100.0%
---------- ------------ ------
---------- ------------ ------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 12 MONTHS ENDED
------------------------------------ JUNE 30,
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges .......... 2.32 2.53 3.02 2.96 2.71 3.39
<FN>
---------------------
(a) The cumulative effect is a result of a one-time change in the
Company's method of accounting for property taxes that was booked
during the first quarter of 1993.
(b) The Company adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (SFAS 109), during 1993. At
December 31, 1993, deferred taxes, and the corresponding regulatory
asset, of approximately $1.03 billion, were recorded pursuant to SFAS
109.
(c) Adjusted to reflect the proposed sale of $140 million principal amount
of 1994 Series D Bonds and the repayment of $170 million principal
amount of bonds previously issued by the Company. The differential
between the net proceeds from the proposed sale of 1994 Series D Bonds
and the funds required to repay the previously issued series will be
met through the issuance of additional short-term debt. See
"Supplemental Description of the 1994 Series D Bonds--Use of
Proceeds."
</TABLE>
- --------------------------------------------------------------------------------
S-2
<PAGE>
<PAGE>
SUPPLEMENTAL DESCRIPTION OF
THE 1994 SERIES D BONDS
This Prospectus Supplement relates to the offer and sale of $140,000,000
principal amount of First and Refunding Mortgage 7 7/8% Bonds, 1994 Series D,
due October 1, 2024 (1994 Series D Bonds) of The Connecticut Light and Power
Company (the Company). The 1994 Series D Bonds are the first series of New Bonds
that are covered by the accompanying Prospectus (the Prospectus). The section of
the Prospectus entitled "Description of the New Bonds" contains detailed
information about the New Bonds. Below is set forth supplemental information
that more specifically relates to the 1994 Series D Bonds.
GENERAL
The 1994 Series D Bonds will be issued under a Supplemental Indenture dated
as of October 1, 1994 and will bear interest from the date of original issuance
at the rate of 7 7/8% per annum. Interest will be payable semi-
annually in arrears on April 1 and October 1 of each year, commencing April 1,
1995, to registered owners as of the close of business on the March 15 or
September 15 next preceding the interest payment dates, or if March 15 or
September 15 falls on a day on which banks are authorized to close in New York
City, then as of the next preceding banking day.
The 1994 Series D Bonds will be issued initially under a book-entry only
system in the form of one fully registered certificate, registered in the name
of Cede & Co., as registered bondholder and nominee of The Depository Trust
Company, New York, New York (DTC). DTC will act as securities depository for
the 1994 Series D Bonds. So long as Cede & Co., as nominee of DTC, or any
successor nominee of DTC, is the registered bondholder of the 1994 Series D
Bonds, references herein and in the Prospectus to the bondholders or registered
owners of 1994 Series D Bonds will mean Cede & Co. or such successor nominee.
See the section in the Prospectus entitled "Book-Entry Only System" for certain
information regarding DTC and the book-entry only system.
For information concerning the requirements of the Indenture and for
additional general information about the Indenture and the New Bonds issuable
thereunder, see "Description of the New Bonds" in the Prospectus.
EARNINGS COVERAGE
The section of the Prospectus entitled "Description of the New Bonds --
Issuance of Additional Bonds, Earnings Coverage" sets forth information about
earnings coverage requirements of the Indenture. Based on the bonds and prior
lien obligations outstanding as of August 31, 1994 and after giving effect to
the sale of the 1994 Series D Bonds, the earnings coverage would be 5.27 for the
twelve months ended August 31, 1994.
REDEMPTION PROVISIONS OF THE 1994 SERIES D BONDS
The 1994 Series D Bonds will not be redeemable as a whole or in part at any
time.
If the Company seeks to eliminate or modify the requirements of the annual
sinking and improvement fund, and subject to the receipt of any required
regulatory approvals, the holders of the New Bonds, including the 1994 Series D
Bonds, will be deemed to have consented to any such amendment or amendments of
the Indenture. See "Description of the New Bonds--Sinking and Improvement Fund"
in the Prospectus.
REPAYMENT AT OPTION OF HOLDER
The 1994 Series D Bonds will be repayable on October 1, 2001, at the option
of the registered holder or holders thereof, at 100% of their principal amount
together with interest payable to the date of repayment. The repayment option
may be exercised by a registered holder of 1994 Series D Bonds for less than the
entire principal amount of the 1994 Series D Bond, provided the principal amount
which is to be repaid to such holder is equal to $1,000 or an integral multiple
of $1,000. Such election by a registered holder to tender 1994 Series D Bonds
for repayment will be irrevocable.
Book-Entry Bonds. So long as the 1994 Series D Bonds are held under the
book-entry only system referred to above in the second paragraph under
"SUPPLEMENTAL DESCRIPTION OF THE 1994 SERIES D BONDS -- General," DTC or its
nominee, Cede & Co., as registered holder of the 1994 Series D Bonds, will be
entitled to
S-3
<PAGE>
<PAGE>
tender the 1994 Series D Bonds on October 1, 2001 for repayment and any such
tenders will be effected by means of DTC's Repayment Option Procedures. During
the period from and including August 1, 2001 to and including September 1, 2001
or, if such September 1, 2001 is not a business day, the next succeeding
business day, DTC will receive instructions from its Participants (acting on
behalf of owners of beneficial interests in the 1994 Series D Bonds) to tender
the 1994 Series D Bonds for repayment under DTC's Repayment Option Procedures.
Such tenders for repayment will be made by DTC by means of a book-entry credit
of the 1994 Series D Bonds to the account of the Trustee, provided that DTC
receives instructions from tendering Participants by Noon on September 1, 2001.
Promptly after the recording of any such book-entry credit, DTC will provide the
Trustee an Agent Put Daily Activity Report in accordance with its Repayment
Option Procedures, identifying the 1994 Series D Bonds and the aggregate
principal amount thereof as to which such tenders for repayment have been made.
OWNERS OF BENEFICIAL INTERESTS IN 1994 SERIES D BONDS WHO WISH TO EFFECTUATE THE
TENDER AND REPAYMENT OF SUCH 1994 SERIES D BONDS MUST INSTRUCT THEIR RESPECTIVE
DTC PARTICIPANT OR PARTICIPANTS A REASONABLE PERIOD OF TIME IN ADVANCE OF
SEPTEMBER 1, 2001.
Certificated Bonds. If at any time the use of a book-entry only system
through DTC (or any successor securities depository) is discontinued with
respect to the 1994 Series D Bonds, tenders for repayment of such bonds on
October 1, 2001 shall be made according to the following procedures. The Company
must receive at the principal office of the Trustee in New York City, during the
period from and including August 1, 2001 to and including September 1, 2001 or,
if such September 1, 2001 is not a business day, the next succeeding business
day, (i) the 1994 Series D Bond with the form entitled "Option to Elect
Repayment" on the reverse of the 1994 Series D Bond duly completed, or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc., or
a commercial bank or a trust company in the United States of America, setting
forth the name of the registered holder of the 1994 Series D Bond, the principal
amount of the 1994 Series D Bond, the amount of the 1994 Series D Bond to be
repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the 1994 Series D Bond to be repaid with the form
entitled "Option to Elect Repayment" on the reverse of the 1994 Series D Bond
duly completed will be received by the Company not later than five business days
after the date of such telegram, telex, facsimile transmission or letter and
such 1994 Series D Bond and form duly completed are received by the Company by
such fifth business day. Any such notice received by the Company during the
period from and including August 1, 2001 to and including September 1, 2001
shall be irrevocable. All questions as to the validity, eligibility (including
time of receipt) and the acceptance of any 1994 Series D Bond for repayment will
be determined by the Company, whose determination will be final and binding.
DIVIDEND RESTRICTIONS
See "Description of the New Bonds--Dividend Restrictions" in the Prospectus
for information about dividend limitations binding on the Company so long as
certain prior series of bonds are outstanding. The most restrictive provisions
currently binding on the Company are set forth in the Supplemental Indenture
dated as of July 1, 1992, under which $100,000,000 principal amount of Series VV
Bonds due July 1, 1999 were issued. Under these provisions, which are applicable
so long as any Series VV Bonds are outstanding, unrestricted earned surplus at
August 31, 1994 would have been $271,120,958.
OTHER FINANCIAL RESTRICTIONS
For information on financial restrictions applicable to the Company, see
"Description of the New Bonds-- Other Financial Restrictions" in the Prospectus
and the Company's 1993 Annual Report on Form 10-K under the caption "Item 1.
Business--Financing Program--Financing Limitations." At August 31, 1994, the
Company's equity ratio (calculated in accordance with the Connecticut Department
of Public Utility Control decision approving Northeast Utilities' acquisition of
Public Service Company of New Hampshire, which decision requires the inclusion
of short-term debt in excess of 7% of total capitalization) was 42.3%.
USE OF PROCEEDS
The net proceeds from the issue and sale of the 1994 Series D Bonds, plus
the proceeds of short-term debt, will be used to repay $170,000,000 principal
amount of the Company's 4 1/4% Series WW Bonds, due October 1, 1994.
S-4
<PAGE>
<PAGE>
UNDERWRITER
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof, Morgan Stanley & Co. Incorporated (the
"Underwriter") has agreed to purchase from the Company, and the Company has
agreed to sell to the Underwriter, $140,000,000 principal amount of the 1994
Series D Bonds. The Underwriting Agreement provides that the obligation of the
Underwriter to pay for and accept delivery of the 1994 Series D Bonds is subject
to the approval of certain legal matters by its counsel and to certain other
conditions. The Underwriter is committed to take and pay for all of the 1994
Series D Bonds if any are taken.
The Underwriter initially proposes to offer part of the 1994 Series D 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 which
represents a concession not in excess of .175% of the principal amount of the
1994 Series D Bonds. The Underwriter may allow, and such dealers may reallow, a
concession not in excess of .100% of the principal amount of the 1994 Series D
Bonds to certain other dealers. After the initial public offering, the public
offering price and concessions may be changed.
The 1994 Series D Bonds are a new issue of securities with no established
trading market. The Company has been advised by the Underwriter that it intends
to make a market in the 1994 Series D Bonds but that it is not obligated to do
so and may discontinue such market making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of the trading market
for the 1994 Series D Bonds.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933.
S-5
<PAGE>
<PAGE>
PROSPECTUS
- -------------
The Connecticut Light and Power Company
First and Refunding Mortgage Bonds
Preferred Stock, $50 Par Value
Class A Preferred Stock, $25 Par Value
-------------------
This prospectus (the Prospectus) is to be used by The Connecticut Light and
Power Company (the Company) in connection with the issuance and sale at one time
or from time to time of First and Refunding Mortgage Bonds (the New Bonds),
Preferred Stock, $50 par value (Preferred Stock) and/or Class A Preferred Stock,
$25 par value (Class A Preferred Stock; together with the Preferred Stock,
collectively referred to herein as the New Preferred Stock). The New Bonds and
the New Preferred Stock are referred to herein as the New Securities. The
principal amount and par value of all New Securities to be issued under this
Prospectus in the aggregate shall not exceed $300,000,000. For each series of
New Securities with respect to which this Prospectus is being delivered, a
supplement to this Prospectus (the Prospectus Supplement) will set forth (i) in
the case of the New Bonds, the principal amount of such series, the series
designation, the purchase price, the public offering price, the interest rate,
the maturity date, and any redemption or sinking fund terms which differ from
the descriptions of such terms in this Prospectus and (ii) in the case of New
Preferred Stock, the class being offered, the specific number of shares of New
Preferred Stock, the purchase price, the initial public offering price, the
dividend rate (or method of calculation thereof) and any redemption or sinking
fund terms which differ from the descriptions of such terms in this Prospectus.
The Prospectus Supplement will also set forth the names of the underwriters
or other initial purchasers of such series of New Securities, any applicable
underwriters' discounts, allowances and commissions, if applicable, the net
proceeds to the Company from any such sale and other specific terms of such
series. See "Plan of Distribution" for possible indemnification arrangements for
underwriters and purchasers.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is September 19, 1994
<PAGE>
No person has been authorized to give any information or to make any
representation not contained, or incorporated by reference, in this Prospectus
in connection with the offer made by this 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. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.
-------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the 1934 Act) and, in accordance therewith, files reports
and other information with the Securities and Exchange Commission (the SEC).
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can also be obtained at prescribed rates from the Public
Reference Section of the SEC at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
Information relating to The Depository Trust Company (DTC) and DTC's
book-entry only system is based upon information furnished by DTC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1993 and its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994 and June 30, 1994 have been filed with the SEC pursuant to the 1934 Act and
are hereby incorporated in this Prospectus by reference.
All documents filed by the Company pursuant to Sections 13(a) and (c), 14
or 15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and any amendment or supplement hereto to the
extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus or any such amendment or supplement.
Certain information contained in this Prospectus summarizes, is based upon,
or refers to, information and financial statements contained in one or more
incorporated documents; accordingly, such information contained herein is
qualified in its entirety by reference to such documents and should be read in
conjunction therewith.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the request of any such person, a copy of
any or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents. Written requests should be directed to The Connecticut Light and
Power Company, P.O. Box 270, Hartford, Connecticut 06141-0270, Attention:
Investor Relations. Telephone requests should be made to (203) 665-5000,
Attention: Investor Relations.
2
<PAGE>
IN CONNECTION WITH ANY FIRM COMMITMENT OFFERING MADE PURSUANT TO THIS
PROSPECTUS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY OR ANY
BONDS OR PREFERRED STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THE COMPANY
The Company is a wholly-owned subsidiary of Northeast Utilities (NU). The
four wholly-owned operating subsidiaries of NU -- the Company, Public Service
Company of New Hampshire (PSNH), Western Massachusetts Electric Company and
Holyoke Water Power Company -- furnish electric service in portions of
Connecticut and New Hampshire and in western Massachusetts. The Company is a
Connecticut corporation, organized in 1907, and is qualified as a foreign
corporation in Massachusetts and New Hampshire. The Company is the largest
electric utility in Connecticut and is engaged principally in the production,
purchase, transmission, distribution and sale of electricity at retail for
residential, commercial, industrial and municipal purposes within Connecticut.
The principal executive offices of the Company are located at Selden
Street, Berlin, Connecticut 06037 (telephone 203-665-5000).
USE OF PROCEEDS
As will be more specifically set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the New Securities will be used
for the payment at maturity, the purchase (on the open market, in private
transactions or otherwise) or the redemption of outstanding securities of the
Company, for general corporate purposes and/or for the repayment of the
Company's short-term debt incurred for such purposes.
Proceeds from the sale of the New Securities not immediately required for
the foregoing purposes may be temporarily invested in the NU system money pool.
The NU system money pool was established by certain subsidiaries of NU,
including the Company, and NU to provide a more efficient use of the cash
resources of the system and to reduce outside short-term borrowings. Short-term
borrowing needs of member companies are first met with available funds of other
member companies and funds may be withdrawn or repaid to the pool at any time
without prior notice. Investing and borrowing subsidiaries receive or pay
interest based on the average daily Federal Fund rate, except that borrowings
based on loans from NU bear interest at NU's cost.
DESCRIPTION OF THE NEW BONDS
General
Each series of the New Bonds is to be issued under and secured by the
Indenture of Mortgage and Deed of Trust dated as of May 1, 1921 between the
Company and Bankers Trust Company, Trustee, as heretofore supplemented and
amended, and which, as it is to be further supplemented by one or more
Supplemental Indentures each of which would relate to a series of the New Bonds
(each of which is hereinafter referred to as a New Supplemental Indenture), is
hereinafter called the Indenture. The summary description of the provisions of
the Indenture which follows does not purport to be complete or to cover all the
provisions thereof. Copies of the Indenture (exclusive of the New Supplemental
Indentures) and a form of New Supplemental Indenture have been filed as exhibits
to, or incorporated by reference in, the registration statement of which this
Prospectus is a part (the Registration Statement) and reference is made thereto
for a complete statement of the applicable provisions. Article and section
references herein are to provisions of the original Indenture as heretofore
amended unless otherwise indicated.
The Trustee acts as a depository bank of, makes loans to, and performs
other services for the Company and other companies in the NU system in the
ordinary course of business.
A particular series of New Bonds may be issued initially under a book-entry
only system, registered in the name of Cede & Co., as registered bondholder and
nominee for DTC. DTC will act as securities depository for such series of New
3
<PAGE>
Bonds. Individual purchases of Book-Entry Interests (as herein defined) in any
New Bonds will be made in book-entry form. Purchasers of Book-Entry Interests in
New Bonds will not receive certificates representing their interests in such New
Bonds. So long as Cede & Co., as nominee of DTC, is the bondholder, references
herein to the bondholders or registered owners will mean Cede & Co., rather than
the owners of Book-Entry Interests in New Bonds. See "Book-Entry Only System"
herein for certain information regarding DTC and DTC's book-entry only system.
General Terms of Bonds
Each series of New Bonds will mature on the date provided for such series
and will bear interest from the date of original issuance at the rate per annum
shown in the series title. Interest will be payable semiannually at the
principal office of the Trustee in New York City, to registered owners at the
close of business on the record date set for each series, or if such record date
is a day on which banks are authorized to close in New York City, on the next
preceding banking day. The Prospectus Supplement with respect to each series of
New Bonds will set forth the maturity date, interest rate, interest payment
dates, record dates and other specific terms and provisions for such series.
The New Bonds are to be issued only in the form of fully registered bonds
without coupons in denominations of $1,000 or multiples thereof and may be
presented for exchange for a like aggregate principal amount of the same series
of New Bonds of other authorized denominations and for transfer at the principal
office of the Trustee in New York City without payment in either case of any
charge other than for any tax or other governmental charges required to be paid
by the Company.
Security
The Indenture constitutes a first mortgage lien (subject to liens permitted
by the Indenture, including liens and encumbrances existing at the time of
acquisition by the Company) on substantially all of the Company's physical
property and franchises, including the Company's generating stations (but not
including the Company's interest in the plants of the four regional nuclear
generating companies described under "Item 1. Business -- Electric Operations --
Nuclear Generation -- General" of the Company's Annual Report on Form 10-K for
1993) and its transmission and distribution facilities. Subject to the
provisions of the Federal Bankruptcy Code, the Indenture will also constitute a
lien on after-acquired property, although in Massachusetts it may be necessary
to comply with applicable recording requirements to perfect the lien on
after-acquired real property. The Indenture also permits after-acquired property
to be subject to liens prior to that of the Indenture. The security afforded by
the Indenture is for the equal and ratable protection of all the Company's
presently outstanding bonds and any bonds which may hereafter be issued under
the Indenture, including each series of New Bonds. (The granting clauses and
ss.ss.6.04 and 6.05.)
Under certain limited circumstances, the lien of the Indenture on real
property in Connecticut acquired by the Company after June 3, 1985 could be
subordinated to a lien in favor of the State of Connecticut pursuant to a
Connecticut law (Connecticut General Statutes Section 22a-452a) providing for
such a lien for reimbursement for expenses incurred in containing, removing or
mitigating hazardous waste.
Also, under certain limited circumstances the lien of the Indenture on real
property in Massachusetts could be subordinated to a lien in favor of the
Commonwealth of Massachusetts pursuant to the Massachusetts Oil and Hazardous
Materials Release Prevention and Response Act, commonly known as the
Massachusetts Superfund.
Further, under certain limited circumstances, the lien of the Indenture on
real property in New Hampshire, personal property located thereon and business
revenues generated therefrom could be subordinated to a lien in favor of the
State of New Hampshire pursuant to New Hampshire Revised Statutes Annotated
147B:10-b, as amended, for expenses incurred in containing or removing hazardous
waste or materials, and any necessary mitigation of damages with respect to
hazardous waste or materials.
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Redemption Provisions
Unless otherwise provided in the Supplemental Indenture under which a
series of the New Bonds is issued, each series of the New Bonds will be
redeemable at the option of the Company as a whole or in part at any time upon
at least 30 days' prior written notice at redemption prices (expressed in
percentages of principal amount) that will be set forth in the New Supplemental
Indenture and the Prospectus Supplement with respect to such series, together in
each case with accrued and unpaid interest to the redemption date; provided,
however, that no New Bond of any series may be redeemed at the applicable
General Redemption Price prior to a date, approximately five years from the date
of issuance of such series and to be set forth in the Prospectus Supplement with
respect to such series, if such redemption is for the purpose of or in
anticipation of refunding such New Bond through the use, directly or indirectly,
of funds borrowed by the Company having an effective interest cost to the
Company (computed in accordance with generally accepted financial principles) of
less than the effective interest cost of New Bonds of such series. If the bonds
of any series of the New Bonds have a maturity of five or fewer years, they
would not be refundable with lower cost funds throughout the life of the bonds.
Unless otherwise provided in the Supplemental Indenture under which a
series of the New Bonds is issued, this refunding limitation will not be
applicable to redemptions of New Bonds at a Special Redemption Price. The
Special Redemption Prices will be applicable to redemptions at the option of the
Company through the use of sinking and improvement fund or replacement fund
moneys or other trust moneys representing insurance proceeds or the proceeds of
the sale, condemnation or other disposition of property. The Supplemental
Indenture under which a series of the New Bonds is issued may prohibit
redemption before maturity, in which case such moneys may not be applied to the
redemption of such New Bonds. Otherwise, for each of the first five consecutive
twelve-month periods, if the bonds of a series of New Bonds have a maturity of
more than five years, or for every twelve-month period, if the bonds of a series
of the New Bonds have a maturity of five or fewer years, redemption of the New
Bonds of such series with sinking and improvement fund moneys at the Special
Redemption Price will be limited to one percent (1%) of the aggregate principal
amount of the New Bonds of such series, commencing with the first day of the
month in which a series of New Bonds is issued. The General Redemption Prices
will be applicable to all other redemptions.
Issuance of Additional Bonds; Earnings Coverage
The Indenture permits, subject to various conditions and restrictions set
forth therein, the issuance of an unlimited amount of additional first mortgage
bonds. Additional bonds may be issued under the Indenture (a) to refund other
bonds or certain prior lien obligations, or (b) on the basis of a certification
of unbonded property additions, or (c) against the deposit of an equal amount of
cash with the Trustee. The aggregate amount of First Mortgage Bonds outstanding
on June 30, 1994 was $1,330,176,000.
Additional bonds may be issued to the extent of 60% (or such greater
percent, not exceeding 662/3%, as may be authorized by the SEC under the Public
Utility Holding Company Act of 1935 (the Holding Company Act)) of unbonded
property additions (ss.3.54). Additional bonds may also be issued to finance 60%
(or such greater percent, not exceeding 662/3%, as may be authorized by the SEC
under the Holding Company Act) of the bondable amount of the Company's interest
in the inventory of nuclear fuel required for a nuclear generating plant
(ss.3.55).
Except in the case of certain refunding issues, the Company may not issue
additional bonds unless its net earnings, as defined and as computed without
deducting income taxes, for 12 consecutive calendar months during the period of
15 consecutive calendar months immediately preceding the first day of the month
in which the application to the Trustee for authentication of additional bonds
is made were at least twice the annual interest charges on all the Company's
outstanding bonds, including the proposed additional bonds, and any outstanding
prior lien obligations (ss.3.58). On the basis of this formula, based on the
bonds and prior lien obligations outstanding as of June 30, 1994, the earnings
coverage was 5.69.
Where cash is deposited with the Trustee as a basis for the issue of bonds,
it may be withdrawn against 60% (or such greater percent, not exceeding 662/3%,
as may be authorized by the SEC under the Holding Company Act) of bondable
property additions or against the deposit of bonds or prior lien obligations
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that would otherwise be available to be made the basis of the issue of
additional bonds. Such cash may also be used to purchase or redeem bonds of any
series as the Company may designate (ss.3.56).
As of June 30, 1994, the Company had unbonded property additions available
that would support the issuance of additional bonds in the principal amount of
$547,670,825, subject to the net earnings and other requirements of the
Indenture.
Other Financial Restrictions
In addition to the foregoing restrictions, there are additional limitations
upon the creation and/or issuance by the Company of long-term debt securities.
Under certain bank and bank reimbursement agreements, lenders are not required
to make additional loans or the maturity of indebtedness can be accelerated if
the Company does not meet an equity ratio that requires, in effect, that the
Company's common equity (as defined) be at least 27 percent of its total
capitalization.
On March 31, 1992, the Connecticut Department of Public Utility Control
(DPUC) issued a decision approving NU's acquisition of PSNH, which occurred on
June 5, 1992. The DPUC's approval included several conditions designed
principally to insulate the Company's customers from possible financial risks
associated with NU's investment in PSNH. Among the conditions is a requirement
that the Company use its best efforts to maintain the amount of common equity in
the Company's capital structure (including short-term debt in excess of 7
percent of total capitalization) above 36 percent. The Company must notify the
DPUC if the ratio is projected to fall below 36 percent, in which case the DPUC
may conduct a review of the Company's financial condition. At June 30, 1994, the
Company's equity ratio (so calculated) was 41.6%. Also, in future rate cases,
the Company will be required to accept a methodology for determining the
Company's cost of capital for ratemaking purposes without regard to NU's cost of
capital if the DPUC finds that the Company's actual debt costs are unduly
influenced by effects of the PSNH acquisition. These conditions are to remain in
effect until the later of May 15, 1998 and the time at which PSNH achieves
investment grade ratings for its first mortgage bonds and a common equity to
total capitalization ratio of at least 30 percent.
Sinking and Improvement Fund
The Indenture specifies an annual sinking and improvement fund requirement
equal to 1% of the aggregate principal amount of the bonds of all series
outstanding at the applicable time of computation, except that bonds which have
been retired out of the proceeds of money deposited with the Trustee on a
release of property or which have been retired in other similar ways need not be
taken into account (ss.6.14).
The annual requirement must be met on or before May 1 in each year, and may
be satisfied by any of the following: (i) deposit of cash with the Trustee, (ii)
a certification of unbonded property additions taken at 60% (or such greater
percent, not exceeding 662/3%, as may be authorized by the SEC under the Holding
Company Act) of the amount certified, or (iii) a deposit of bonds or prior lien
obligations that would otherwise be available to be made the basis of the issue
of additional bonds. Cash so deposited may be withdrawn or applied to the
purchase or redemption (at the applicable Special Redemption Price) of bonds of
any series designated by the Company or otherwise applied, as more fully stated
below under "Withdrawal or Application of Cash" (ss.6.14).
If the Company seeks to eliminate or modify the requirements of the annual
sinking and improvement fund, and subject to the receipt of any required
regulatory approvals, the holders of the New Bonds will be deemed to have
consented to any such amendment or amendments of the Indenture. (ss.1.05 of form
of proposed New Supplemental Indenture).
Renewal and Replacement Fund
If, as at the end of any year, the aggregate amount expended by the Company
for property additions since December 31, 1966 is less than the "replacement
fund requirement" (referred to below) for the same period, the Company is
required to make up the deficit by depositing cash with the Trustee, or by
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depositing with the Trustee bonds or prior lien obligations which would
otherwise be available as a basis for the issue of additional bonds or by
certifying unbonded property additions taken at 100% of the amount certified. At
the request of the Company, any cash so deposited may be used to purchase or
redeem (at the applicable Special Redemption Price) bonds of such series as the
Company may designate. A replacement fund deficit may thereafter be offset by
expenditures in a later year in excess of the requirement for such year and
thereupon the Company will be entitled, to the extent of such offset, to the
return of cash, bonds or prior lien obligations deposited to make up the deficit
or to reinstate as bondable any property additions certified for such purpose
(ss.6.06).
The replacement fund requirement is computed on an annual basis, and is
equal, for each year, to 2.25% of the average of the amounts carried on the
Company's books for depreciable property at the beginning and end of the year
(ss.1.01(pp)). As of June 30, 1994, the Company's expenditures for property
additions had exceeded the replacement fund requirement by $4,326,837,996.
Withdrawal or Application of Cash
Cash deposited with the Trustee pursuant to the sinking and improvement
fund or replacement fund requirements may, at the Company's option, be withdrawn
against a certification of unbonded property additions, or against the deposit
of bonds or prior lien obligations which would otherwise be available to be made
the basis of the issue of additional bonds or may be applied to the purchase or
redemption (at the applicable Special Redemption Price) of bonds of such series
as the Company may designate (ss.ss.6.06, 6.14 and 9.04). Where cash to be
withdrawn against a certification of unbonded property additions has been
deposited pursuant to the sinking and improvement fund requirement, a withdrawal
is permitted equal to 60% (or such greater percent, not exceeding 662/3%, as may
be authorized by the SEC under the Holding Company Act) of the amount certified
(ss.6.14). When the cash to be withdrawn has been deposited under the
replacement fund requirement, a withdrawal equal to 100% is permitted (ss.6.06).
Restrictions on the redemption of New Bonds at the applicable Special
Redemption Price with moneys deposited with the Trustee pursuant to the annual
sinking and improvement fund are set forth in "Redemption Provisions."
Dividend Restrictions
The Indenture contains restrictions on the payment of common stock
dividends, which were included in certain Supplemental Indentures at the time of
issuance of prior series of bonds. If a dividend restriction is included for any
series of the New Bonds, the specific terms will be described in the Prospectus
Supplement for that series. The Supplemental Indenture dated as of July 1, 1992,
which contains restrictions applicable so long as any Series VV Bonds, maturing
July 1, 1999, are outstanding, currently contains the most restrictive
provision. Under this provision, the aggregate amount which may be declared,
paid or otherwise applied by the Company after the date of issuance of a series
of the New Bonds as dividends or other distributions on its common stock (other
than by way of stock dividends or when an equal amount of cash is received
concurrently as a capital contribution or on the sale of common stock) or to the
purchase or other acquisition of common stock may not exceed earned surplus (as
defined, and after deducting accrued preferred stock dividends) accumulated
after June 30, 1992, plus $207,000,000, plus such further amount as may be
authorized by the SEC under the Holding Company Act. Pursuant to these
provisions, unrestricted earned surplus at June 30, 1994 would have amounted to
approximately $226,955,221.
Similar dividend restrictions are binding on the Company so long as certain
prior series of the Company's bonds are outstanding.
Default
The Indenture provides that the following events will constitute "events of
default" thereunder: failure to pay principal; failure for 90 days to pay
interest; failure to perform any of the other Indenture covenants for 90 days
after notice to the Company; failure to perform any covenant contained in any
lien securing prior lien obligations if such default permits enforcement of the
lien; and certain events in bankruptcy, insolvency or receivership (ss.10.02).
The Indenture requires the Company to deliver to the Trustee an annual officers'
certificate as to compliance with certain provisions of the Indenture (ss.6.16).
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The Indenture provides that, if any event of default exists, the holders of
a majority in principal amount of the bonds outstanding may, after tender to the
Trustee of indemnity satisfactory to it, direct the sale of the mortgaged
property (ss.10.04).
Modification of the Indenture
The Indenture may be supplemented or amended to convey additional property,
to state indebtedness of companies merged, to add further limitations to the
Indenture, to evidence a successor company, or to make such provision in regard
to questions arising under the Indenture as may be necessary or desirable and
not inconsistent with its terms (ss.14.01).
The Indenture also permits the modification, with the consent of holders of
662/3% of the bonds affected, of any provision of the Indenture, except that (a)
no such modification may effect a reduction of such percentage or the creation
of a lien prior to or concurrent with that of the Indenture unless all
bondholders consent, (b) no bondholder who refuses to consent may be deprived of
his security and (c) the Company's obligations as to the maturities, payment of
principal, interest or premium and other terms of payment may not be modified
unless all affected bondholders consent (ss.14.03).
DESCRIPTION OF THE NEW PREFERRED STOCK
General
The Company's capital stock consists of shares of Common Stock, $25 par
value per share, as well as two classes of preferred stock, one designated
"Preferred Stock," having a par value of $50 per share, and the other designated
"Class A Preferred Stock," having a par value of $25 per share. The Preferred
Stock and the Class A Preferred Stock are hereinafter sometimes collectively
referred to as the Senior Stock.
Shares of the Preferred Stock and shares of Class A Preferred Stock rank on
a parity in respect of dividends or payment in case of liquidation, and, to the
extent not fixed and determined by the Company's certificate of incorporation,
have the same rights, preferences and powers. Voting rights are the only
differences in rights between the two classes and are summarized below under
"Voting Rights."
The Preferred Stock and the Class A Preferred Stock may be issued from time
to time in series when authorized by the Company's Board of Directors, up to the
number of authorized but unissued shares of Preferred Stock and Class A
Preferred Stock, respectively, set forth in the Company's certificate of
incorporation, as amended from time to time. The series designation, dividend
rate (or method of determining dividend rate), redemption prices and other terms
of each series are determined by the Board of Directors to the extent not fixed
by the Company's certificate of incorporation.
The general provisions of the Senior Stock, applicable to all series of
Preferred Stock and Class A Preferred Stock, and the specific provisions
applicable to each series, including the New Preferred Stock, are set forth in
the certificate of incorporation. Copies of the applicable provisions of the
certificate of incorporation entitled Amended and Restated Provisions of
Statutory Certificate of Incorporation with Respect to Capital Stock of The
Connecticut Light and Power Company, and forms of the proposed amendments to the
certificate of incorporation establishing series of the New Preferred Stock are
filed with or incorporated by reference in the registration statement of which
this Prospectus is a part (the Registration Statement), as exhibits.
The provisions of the Company's Senior Stock are summarized below, and the
article references are to the provisions of Part II of the certificate of
incorporation. The summary does not purport to be complete or to cover all the
provisions thereof and reference is made to the aforementioned exhibits to the
Registration Statement for a complete statement of the Senior Stock provisions.
The New Preferred Stock will be transferable at the offices of Northeast
Utilities Service Company (NUSCO), Berlin, Connecticut, Transfer Agent and
Registrar for the Senior Stock. Both the Company and NUSCO are wholly-owned
subsidiaries of Northeast Utilities.
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Earnings Coverage--Senior Stock Provision
The Senior Stock provisions of the Company's certificate of incorporation
require for the issuance of additional Senior Stock that Income Before Interest
Charges (as defined) be at least one and one-half times the pro forma annual
interest charges on all indebtedness and annual dividend requirements on the
Senior Stock to be outstanding after the issuance of the additional stock (see
"Voting Rights"). On the basis of the Income Before Interest Charges and the
indebtedness and the Senior Stock outstanding as of June 30, 1994, this ratio
was 2.36.
Dividend Rights
Holders of Senior Stock of each class and series are entitled to receive
cumulative dividends when declared by the Board of Directors at the rate
provided for such class and series. Dividends may not be declared or paid on a
particular class and series of the Senior Stock unless dividends have been or
are contemporaneously declared or paid on the Senior Stock of all other classes
and series for all dividend periods terminating on the same or an earlier date.
No dividend may be paid on the Common Stock or other stock of the Company
subordinate to the Senior Stock in respect of dividends or assets (which
together with Common Stock is defined as "junior stock") unless full cumulative
dividends to the last preceding dividend date have been paid or set apart for
payment of the Senior Stock (Section II, ss.ss.1, 2 and 3).
The Company is, in effect, prohibited from making payments on junior stock,
by way of dividends or otherwise (other than in shares of junior stock), in an
amount which, if the percentage of junior stock equity (as defined) to total
capitalization (as defined) is less than 20%, would, together with all other
junior stock payments made within the preceding 12 months, exceed 50% of net
income available for dividends on junior stock, or, if such percentage is
between 20% and 25%, would, together with all other junior stock payments made
within the preceding 12 months, exceed 75% of such net income (Section II,
ss.ss.4, 5 and 6).
Dividends on each series of New Preferred Stock will be payable quarterly
or otherwise at the rate provided for such series.
Sinking Fund Provisions
If a sinking fund is provided for a particular series of New Preferred
Stock, the Prospectus Supplement will describe the terms of the sinking fund for
that series. See "Redemption and Purchase" below for limitations on the
Company's right to redeem or purchase Senior Stock if the Company is in arrears
in the payment of dividends on any outstanding shares of Senior Stock.
Redemption and Purchase
All or any part of any series of Senior Stock outstanding may be redeemed,
subject to certain limitations, at any time at the redemption price established
for such series, except that no redemption of less than all shares of Senior
Stock outstanding may be made if the Company is in arrears with respect to
payment of dividends on any shares of Senior Stock outstanding (Section III,
ss.ss.1 through 3).
The Company may purchase any outstanding shares of Senior Stock upon the
best terms reasonably obtainable, but not exceeding the then-current redemption
price of such shares, except that no such purchase may be made if the Company is
in arrears with respect to payment of dividends on any shares of Senior Stock
outstanding or if any event of default exists under the Senior Stock provisions
(Section III, ss.6).
Unless otherwise provided in the Prospectus Supplement, each series of the
New Preferred Stock will be redeemable for other than sinking fund purposes as a
whole or in part at any time, at the option of the Company upon at least 30
days' prior written notice on the terms described in the Prospectus Supplement
for that series.
See the Prospectus Supplement with respect to any particular series of New
Preferred Stock for more information concerning the redemption provisions for
that series.
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Liquidation Rights
The Senior Stock is entitled to receive upon voluntary liquidation the
then-current redemption price for the particular series and, upon involuntary
liquidation, $50 per share in the case of the Preferred Stock and $25 per share
in the case of the Class A Preferred Stock, plus in each case all dividends
accrued and unpaid to the date of such payment, before any payment is made on
junior stock (Section IV).
Voting Rights
Except as otherwise provided by law or, as described below, by the Senior
Stock provisions, holders of Senior Stock have no voting rights.
Whenever the holders of the Senior Stock have the right to vote or consent
to an action as provided by law or by the Senior Stock provisions, both classes
of Senior Stock (except as described below) vote together as a single class,
with each outstanding share of Senior Stock entitled to vote enjoying voting
rights proportionate to the ratio of (i) the par value represented by such share
to (ii) the par value represented by all shares of Senior Stock then
outstanding. In accordance with such formula, each share of Preferred Stock ($50
par value) will be entitled to a weighted vote equal to twice the vote of each
share of Class A Preferred Stock ($25 par value). Whenever only one class of the
Senior Stock shall have the right to vote or consent to an action as provided by
law or, as described below, by the Senior Stock provisions, or whenever each
class of the Senior Stock shall be entitled or be required to vote as a separate
class on a matter, each outstanding share of such class entitled to vote shall
be entitled to one vote on each such matter (Section V, ss.2).
Whenever dividends on any share of Senior Stock are in arrears in an amount
equal to or exceeding full dividend payments for one year or whenever there
exists a default in the performance of any of the Senior Stock provisions or a
default on which action has been taken by bondholders or the trustee of any
mortgage of the Company, or whenever the Company has been declared bankrupt or a
receiver of its property has been appointed, the holders of both classes of
Senior Stock have the right, voting together as a single class, to elect the
smallest number of directors necessary to constitute a majority of the Board of
Directors. Such voting rights shall cease upon the termination of the condition
giving rise thereto (Section V, ss.3).
Without the consent of the holders of a majority of the aggregate voting
rights represented by shares of the Senior Stock then outstanding, or in the
event of dissent by or negative vote of holders of one-third of the aggregate
voting rights represented by shares of the Senior Stock then outstanding, the
Company may not (Section VI, ss.4):
1. Issue or assume unsecured notes, unsecured debentures or other
securities representing unsecured debt (except to redeem all outstanding
shares of Senior Stock or to refund or renew unsecured indebtedness) in
excess of 20% of the Company's outstanding capital stock, surplus and
secured indebtedness, or, with respect to unsecured indebtedness having
maturities of less than 10 years, in excess of 10% of outstanding capital
stock, surplus and secured indebtedness. Payment due upon the maturity of
unsecured debt having an original single stated maturity of 10 years or
more is not regarded as unsecured debt with a maturity of less than 10
years until within three years of the maturity thereof, and each of the
payments due upon any unsecured debt having an original stated maturity for
the final serial payment of 10 years or more is not regarded as an
unsecured debt of a maturity of less than 10 years until within three years
of the maturity of the final serial payment.
By the affirmative vote of the holders of a majority of the
outstanding shares of Senior Stock at a stockholders' meeting held on
December 15, 1993, the Company has been authorized, notwithstanding such
limitations, to incur unsecured indebtedness, having maturities of not more
than ten years, in excess of 10% of its capital stock, surplus and secured
indebtedness, provided that (i) such indebtedness is issued on or before
March 31, 2004, (ii) such indebtedness has maturities not later than March
31, 2005, and (iii) the limitation on all unsecured indebtedness of the
Company to 20% of its capital stock, surplus and secured indebtedness is
complied with.
2. Issue, sell or otherwise dispose of any shares of then authorized
but unissued Senior Stock or any other stock ranking on a parity with or
having priority over the Senior Stock as to dividends or assets if (a) for
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a period of 12 consecutive calendar months within the 15 calendar months
immediately preceding the month of issue Income Before Interest Charges (as
defined) for said period available for the payment of interest (including,
in any case in which stock is to be issued in connection with the
acquisition of property, the Income Before Interest Charges of the property
to be acquired) was not at least one and one-half times the sum of (i) the
interest charges for one year on indebtedness to be outstanding immediately
following the proposed issue, sale or other disposition, (ii) annual
dividend requirements on shares of Senior Stock and stock ranking on a
parity with or having priority over the Senior Stock outstanding and
proposed to be issued and (iii) certain rental charges, or (b) such issue
would bring the aggregate of the amount payable on involuntary liquidation
of the Company with respect to all shares of Senior Stock and all shares of
stock ranking on a parity with or having priority over the Senior Stock to
an amount in excess of "junior stock equity" (as defined).
Without the consent of the holders of at least two-thirds of the aggregate
voting rights represented by shares of the Senior Stock then outstanding, or at
least two-thirds of the outstanding shares of the class of Senior Stock affected
if only one such class is affected, the Company may not:
1. Increase the authorized amount of the Preferred Stock or stock
ranking on a parity with the Preferred Stock as to dividends or assets
beyond 9,000,000 shares and $450,000,000 aggregate par or stated value or
increase the authorized amount of Class A Preferred Stock or stock ranking
on parity with the Class A Preferred Stock as to dividends and assets
beyond 8,000,000 shares and $200,000,000 aggregate par or stated value
(Section VI, ss.3).
2. Authorize or issue any shares of any class of stock having priority
over the Senior Stock as to dividends or assets or issue any shares of any
such prior ranking stock more than 12 months after the date of the vote
authorizing such prior ranking stock (Section VI, ss.1).
3. Change the rights, preferences or powers of the Senior Stock so as
to affect adversely such rights, preferences or powers, provided that in no
event may any reduction of the dividend rate or of amounts payable on
redemption or liquidation with respect to any share of Senior Stock of
either class be made without the consent of the holder thereof and that no
such reduction with respect to shares of any particular series of either
class of the Senior Stock may be made without the consent of all the
holders of shares of such series (Section VI, ss.2).
The Senior Stock provisions require the consent of the holders of a
majority of the aggregate voting rights represented by shares of the Senior
Stock then outstanding for a merger or consolidation of the Company with or into
any other corporation or for a sale of all or substantially all of the Company's
assets unless such merger, consolidation or sale, or the issuance or assumption
of securities in the effectuation thereof, shall have been permitted under the
Holding Company Act (Section VII). The Connecticut Stock Corporation Act
presently requires, with minor exceptions, the affirmative vote of the holders
of at least two-thirds of the outstanding shares of each class of the Company's
capital stock, including the Preferred Stock and the Class A Preferred Stock,
each voting as a separate class, to approve such a merger, consolidation or
sale.
Miscellaneous
Except as otherwise expressly provided by law, the Senior Stock has no
preemptive or conversion rights and (except as provided with respect to a
particular series of either class of the Senior Stock) is not entitled to the
benefit of any sinking fund. See "Sinking Fund Provisions." Upon due issuance
and the receipt by the Company of the purchase price therefor, all shares of the
New Preferred Stock will be fully paid and nonassessable.
See "Description of the New Bonds--Other Financial Restrictions" for a
description of certain financial restrictions applicable to the Company as a
result of NU's 1992 acquisition of PSNH.
BOOK-ENTRY ONLY SYSTEM
The description which follows of the procedures and recordkeeping with
respect to beneficial ownership interests in the New Bonds, payments of
principal of, and premium, if any, and interest on, the New Bonds to DTC and its
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Participants or Beneficial Owners, in each case as defined below, confirmation
and transfer of beneficial ownership interests in the New Bonds and other
related transactions by and among DTC, the DTC Participants and Beneficial
Owners is based solely on information furnished by DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants (Participants) deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants (Direct Participants) include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly (Indirect Participants). The rules applicable to DTC and
its Participants are on file with the SEC.
Purchases of New Bonds under the DTC system must be made by or through
Direct Participants, which will receive a credit for the New Bonds on DTC's
records. The ownership interest of each actual purchaser of New Bonds
(Beneficial Owner) is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the New Bonds are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in the New
Bonds, except in the event that use of the book-entry system for the New Bonds
is discontinued. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE SOLE HOLDER
OF THE NEW BONDS, THE TRUSTEE SHALL TREAT CEDE & CO. AS THE ONLY HOLDER OF THE
NEW BONDS FOR ALL PURPOSES UNDER THE INDENTURE, INCLUDING RECEIPT OF ALL
PRINCIPAL OF, AND PREMIUM, IF ANY, AND INTEREST ON SUCH NEW BONDS, RECEIPT OF
NOTICES, AND VOTING AND REQUESTING OR DIRECTING THE TRUSTEE TO TAKE OR NOT TO
TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THE INDENTURE.
To facilitate subsequent transfers, all New Bonds deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of New Bonds with DTC and their registration into the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the New Bonds; DTC's records reflect only the identity of
the Direct Participants to whose accounts such New Bonds are credited, which may
or may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices, if any, shall be sent to Cede & Co. If less than all of
the New Bonds within an issue are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the New
Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Company as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
New Bonds are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
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Principal of, and premium, if any, and interest payments on the New Bonds
will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on the applicable payment date in accordance with their respective holdings
shown on DTC's records unless DTC has reason to believe that it will not receive
payment on such date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
DTC, the Trustee or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal, and
premium, if any, and interest to DTC is the responsibility of the Company or the
Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the New Bonds at any time by giving notice to the Company or the
Trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, individual bond certificates are required to be
printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
individual bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable
(including DTC), but the Company takes no responsibility for the accuracy
thereof.
THE COMPANY, THE UNDERWRITERS AND THE TRUSTEE HAVE NO RESPONSIBILITY OR
OBLIGATION TO THE DTC PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A)
THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (B) THE
PAYMENT BY ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN
RESPECT OF THE PRINCIPAL OF, AND PREMIUM, IF ANY, AND INTEREST ON, THE NEW
BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC TO ANY DTC PARTICIPANT
OR BY ANY DTC PARTICIPANT TO ANY BENEFICIAL OWNER OF ANY NOTICE WHICH IS
REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO HOLDERS OF
THE NEW BONDS; OR (D) ANY OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO.,
AS HOLDER OF THE NEW BONDS.
LEGAL OPINIONS AND EXPERTS
Legal matters in connection with the issue of the New Securities will be
passed upon for the Company by Robert P. Wax, Esq., Vice President, Secretary
and General Counsel of the Company, or Jeffrey C. Miller, Assistant General
Counsel of NUSCO. Legality of the New Securities will be passed upon for the
underwriters or other purchasers by Winthrop, Stimson, Putnam & Roberts, One
Battery Park Plaza, New York, New York.
Statements of law and legal conclusions herein and in the Registration
Statement pertaining to the description of the New Bonds have been reviewed by
Mr. Miller. Certain statements of law and legal conclusions set forth in the
Company's Annual Report on Form 10-K for 1993 and its Quarterly Reports on Form
10-Q for the quarters ended March 31, 1994 and June 30, 1994 with respect to
short-term borrowing authority and the earnings coverage requirement of the
Indenture and preferred stock provisions of the Company, its franchises, its
participation in joint projects, the laws and regulations to which it is or may
be subject, and litigation and legal proceedings, have been reviewed by Mr.
Miller and said statements are made upon his authority as an expert.
The Company's audited financial statements and schedules related thereto,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen & Co., independent public accountants, as indicated in their reports
with respect thereto, which have also been incorporated by reference herein, in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
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PLAN OF DISTRIBUTION
The Company will sell the New Securities in one or more sales, pursuant to
a negotiated underwriting or pursuant to the solicitation (through the giving of
notice to two or more potential purchasers) and acceptance of a proposal or
proposals for the purchase of all or any portion of the New Securities.
Purchasers of the New Securities may include underwriters or purchasers acting
for themselves. If underwriters are involved in the sale, the applicable series
of New Securities will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at various prices
determined at the time of sale.
The Prospectus Supplement relating to a series of New Securities will set
forth the purchase price of New Securities of such series with respect to which
an agreement of sale has been entered into by the Company, the proceeds to the
Company from such sale, and the terms of any reoffering of New Securities,
including the names of any underwriters, the underwriters' discounts and
allowances, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers with
respect to New Securities may be changed from time to time. Unless otherwise set
forth in the Prospectus Supplement, the obligations of the underwriters or other
purchasers will be subject to certain conditions precedent and the underwriters
or other purchasers will be obligated to purchase all of the New Securities of
the applicable series if any of them are purchased, provided that under certain
circumstances involving a default of underwriters or other purchasers, less than
all of the New Securities of a series may be purchased.
The Company may indemnify any underwriter or other purchaser of a series of
the New Securities against certain liabilities, including liabilities under the
Securities Act of 1933.
RATIO OF EARNINGS TO FIXED CHARGES
Below are set forth the ratios of earnings to fixed charges for each of the
years in the period 1989 through 1993 and for the twelve months ended June 30,
1994. The ratios have been restated to reflect only the revenues and income from
the Company's continuing electric business. The Company divested its gas
business on June 30, 1989.
Twelve-Month
Period Ended Ratio
------------- -----
December 31, 1989.......................................2.32
December 31, 1990.......................................2.53
December 31, 1991.......................................3.02
December 31, 1992.......................................2.96
December 31, 1993.......................................2.71
June 30, 1994 (unaudited)...............................3.39
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Below are set forth the ratios of earnings to fixed charges and preferred
dividends for each of the years in the period 1989 through 1993 and for the
twelve months ended June 30, 1994. The ratios have been restated to reflect only
the revenues and income from the Company's continuing electric business. The
Company divested its gas business on June 30, 1989.
Twelve-Month
Period Ended Ratio
------------- -----
December 31, 1989........................................1.95
December 31, 1990........................................2.03
December 31, 1991........................................2.34
December 31, 1992........................................2.27
December 31, 1993........................................2.01
June 30, 1994 (unaudited)................................2.55
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