PROSPECTUS SUPPLEMENT
(To Prospectus dated November 17, 1999)
$200,000,000
Consolidated Edison Company of
New York, Inc.
7.15% Debentures, Series 1999 B Due 2009
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Interest payable on June 1 and December 1
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The Debentures are unsecured debt securities of Consolidated Edison Company of
New York, Inc. ("Con Edison") which will mature on December 1, 2009. The
Debentures may not be redeemed prior to maturity. Interest on the Debentures is
payable on June 1, 2000 and thereafter semi-annually on June 1 and December 1 in
each year.
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PRICE 99.702% AND ACCRUED INTEREST, IF ANY
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Price to Underwriting Proceeds to Con
Public Discounts and Edison
Commissions
Per Debenture............... 99.702% .650% 99.052%
Total...................... $199,404,000 $1,300,000 $198,104,000
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this Prospectus
Supplement or the accompanying Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Morgan Stanley & Co. Incorporated expects to deliver the Debentures to
purchasers on December 8, 1999.
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MORGAN STANLEY DEAN WITTER
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December 1, 1999
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You should rely only on the information contained in or incorporated by
reference in this Prospectus Supplement and Prospectus. We have not authorized
anyone to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information contained in or incorporated by reference in this
Prospectus Supplement and Prospectus is accurate as of any date other than the
date on the front of this Prospectus Supplement.
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TABLE OF CONTENTS
Prospectus Supplement
Page
Description of Debentures..........................................S-2
Underwriting.......................................................S-4
Prospectus
About This Prospectus ................................................2
Where You Can Find More Information...................................2
Con Edison............................................................3
Use of Proceeds.......................................................4
Ratio of Earnings to Fixed Charges....................................4
Description of Securities.............................................4
Plan of Distribution.................................................12
Legal Matters........................................................13
Experts..............................................................13
DESCRIPTION OF DEBENTURES
General
The Debentures will mature on December 1, 2009, and may not be redeemed
prior to maturity. Additional information describing the Debentures and the
Indenture under which they will be issued is included in "Description of
Securities" in the Prospectus.
Interest
We will pay interest on the Debentures at the rate per annum stated on the
first page of this Prospectus Supplement. Such interest will accrue from
December 8, 1999 or from the most recent interest payment date to which interest
has been paid. Interest will be paid on June 1, 2000 and thereafter
semi-annually on June 1 and December 1 in each year to holders of record at the
close of business on the fifteenth day, whether or not a business day, of the
calendar month next preceding such interest payment date, except as otherwise
provided in the Indenture.
Book-Entry System
This discussion of The Depository Trust Company ("DTC") and its book-entry
system supplements the discussion of depositary arrangements in "Description of
Securities - Global Securities" in the Prospectus.
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DTC will act as securities depository for the Debentures. The Debentures
will be issued in fully-registered form in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered Debenture certificates will
be issued as Global Securities for the Debentures, in the aggregate principal
amount of the Debentures, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants" and
together with Direct Participants, "Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Debentures under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Debentures on DTC's
records. The ownership interest of each actual purchaser of Debentures
("Beneficial Owner") is in turn to be recorded on the 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 Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Debentures 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 Debentures, except in the event that use of the
book-entry system for the Debentures is discontinued.
To facilitate subsequent transfers, all Debentures deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debentures with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Debentures 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
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to
Debentures. Under its usual procedures, DTC would mail an Omnibus Proxy to Con
Edison 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 Debentures are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
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Principal and interest payments on the Debentures will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the payable 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 the payable 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 or Con Edison, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of Con Edison,
disbursement of such payments to Direct Participants shall be the responsibility
of DTC, and disbursements of such payments to the Beneficial Owners shall be the
responsibility of Participants.
DTC may discontinue providing its services as securities depository with
respect to the Debentures at any time by giving reasonable notice to Con Edison.
Under such circumstances, in the event that a successor securities depository is
not obtained, Debenture certificates are required to be printed and delivered.
Con Edison may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, Debenture
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 Con Edison believes to be reliable
(including DTC), but Con Edison takes no responsibility for the accuracy
thereof.
Neither Con Edison, the Trustee nor the Underwriter will have any
responsibility or obligation to Participants, or the persons for whom they act
as nominees, with respect to the accuracy of the records of DTC, its nominee or
any Participant with respect to any ownership interest in the Debentures, or
payments to, or the providing of notice for, Participants or Beneficial Owners.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between Con Edison and Morgan Stanley & Co.
Incorporated (the "Underwriter"), Con Edison has agreed to sell to the
Underwriter, and the Underwriter has agreed to purchase, the Debentures. The
Underwriting Agreement provides that the obligations of the Underwriter are
subject to certain conditions precedent and that the Underwriter will be
obligated to purchase all of the Debentures if any are purchased.
The Underwriter has advised Con Edison that it proposes to offer the
Debentures in part directly to the public at the initial public offering price
set forth on the cover page of this Prospectus Supplement and in part to certain
securities dealers at such price less a concession not to exceed .40% of the
principal amount of the Debentures. The Underwriter may allow, and such dealers
may reallow, a concession not to exceed .25% of the principal amount of the
Debentures to certain brokers and dealers. After the Debentures are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the Underwriter.
The Underwriting Agreement provides that the obligations of the
Underwriter to pay for and accept delivery of the Debentures are subject to
certain conditions, including delivery of certain legal opinions by counsel for
the Underwriter, and that the Underwriter will be obligated to purchase all the
Debentures if any are purchased.
The Underwriting Agreement provides that Con Edison will indemnify the
Underwriter against certain liabilities under the Securities Act of 1933 and
will contribute to payments the Underwriter may be required to make in respect
thereof.
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The Debentures will be a new issue of securities for which there is
currently no market. Although the Underwriter has informed Con Edison it
currently intends to make a market in the Debentures, the Underwriter is not
obligated to do so, and any such market making may be discontinued at any time
without notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Debentures. Con Edison does not intend to apply
for listing of the Debentures on a national securities exchange.
In the ordinary course of its business, Morgan Stanley & Co. Incorporated
provides investment banking services to Con Edison and its affiliates in
connection with various transactions and proposed transactions.
In order to facilitate the offering of the Debentures, the Underwriter may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debentures. Specifically, the Underwriter may over-allot in connection with
the offering, creating a short position in the Debentures for its own account.
In addition, to cover over-allotments or to stabilize the price of the
Debentures, the Underwriter may bid for, and purchase, the Debentures in the
open market. Finally, the Underwriter may reclaim selling concessions allowed to
a dealer for distributing the Debentures in the offering, if the Underwriter
repurchased previously distributed Debentures in transactions to cover syndicate
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Debentures above
independent market levels. The Underwriter is not required to engage in these
activities and may end any of the activities at any time.
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PROSPECTUS
Consolidated Edison Company of New York, Inc.
Debt Securities
Consolidated Edison Company of New York, Inc. may offer and sell up to
$590,000,000 of our unsecured debt securities. We will establish the specific
terms of each series of our debt securities, their offering prices and how they
will be offered at the time we offer them, and we will describe them in one or
more supplements to this prospectus. This prospectus may not be used to offer
and sell our debt securities unless accompanied by a prospectus supplement. You
should read this prospectus and the related supplement before you invest in our
debt securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS
PROPSECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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We will offer and sell our debt securities through one or more
underwriters. We will set forth in the related prospectus supplement the name of
the underwriters, the discount received by the underwriters from us as
compensation, our other expenses for the offering and sale of the debt
securities, and the net proceeds we receive from the sale. See "Plan of
Distribution."
The date of this Prospectus is November 17, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with the
Securities and Exchange Commission using a "shelf" registration process. By
using this process, we may offer up to a total dollar amount of $590,000,000 of
our debt securities in one or more offerings. This prospectus provides you with
a general description of the debt securities we may offer. Each time we offer
debt securities, we will provide you with a supplement to this prospectus that
will describe the specific terms of that offering. The prospectus supplement may
also add, update or change the information contained in this prospectus. Before
you invest, you should carefully read this prospectus, the applicable prospectus
supplement and the information contained in the documents we refer to in this
prospectus under "Where You Can Find More Information."
References in this prospectus to the terms "we", "us" or other similar
terms mean Consolidated Edison Company of New York, Inc., unless the context
clearly indicates otherwise. We are also referred to in this prospectus as Con
Edison.
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We have
not authorized anyone else to provide you with any different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell securities in any jurisdiction
where the offer or sale is not permitted. The information contained in this
prospectus is current only as of the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. We file such reports,
proxy statements and other information through the Commission's Electronic Data
Gathering, Analysis and Retrieval system and these filings are publicly
available through the Commission's Web site (http://www.sec.gov). You may read
and copy such material at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
at the Commission's New York Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048; and at its Chicago Regional Office, Northwest Atrium
Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661. You may
also obtain copies of such material at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, you may inspect such material at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, the Chicago
Stock Exchange, 120 South LaSalle Street, Chicago, Illinois 60605 and the
Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104.
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The Commission allows us to "incorporate by reference" into this
prospectus the information we file with them. This means that we can disclose
important information to you by referring you to the documents containing the
information. The information we incorporate by reference is considered to be an
important part of this prospectus and should be read with the same care.
Information that we file later with the Commission that is incorporated by
reference into this prospectus will automatically update and supercede this
information. We are incorporating by reference into this prospectus the
following documents that we have filed with the Commission and any subsequent
filings we make with the Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until the offering of the debt securities
described in this prospectus is completed:
Con Edison's Annual Report on Form 10-K for the year ended December 31,
1998, Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1999 and June 30, 1999, and
Current Report on Form 8-K, dated June 25, 1999.
This prospectus is part of a registration statement we have filed with the
Commission relating to our debt securities. As permitted by the Commission's
rules, this prospectus does not contain all of the information included in the
registration statement and the accompanying exhibits and schedules we file with
the Commission. You should read the registration statement and the exhibits and
schedules for more information about us and our debt securities. The
registration statement, exhibits and schedules are also available at the
Commission's Public Reference Section or through its Web site.
You may obtain a free copy of our filings with the Commission by writing
or telephoning us at our principal executive offices: Corporate Secretary,
Consolidated Edison Company of New York, Inc., 4 Irving Place, New York, New
York 10003 (Telephone No.: 212-460-6066).
CON EDISON
Con Edison, incorporated in New York State in 1884, provides electric
service to its approximately 3 million electric customers in New York City
(except part of Queens) and most of Westchester County, New York. Con Edison
also provides gas service to over one million customers in Manhattan, the Bronx
and parts of Queens and Westchester, and steam service in part of Manhattan.
Consolidated Edison, Inc. ("CEI"), incorporated in New York State in 1997,
became the holding company for Con Edison on January 1, 1998. CEI completed its
purchase of Orange and Rockland Utilities, Inc. in July 1999 and agreed to
purchase Northeast Utilities in October 1999. Orange and Rockland provides
electric service to approximately 250,000 customers and gas service to
approximately 100,000 customers in New York, New Jersey and Pennsylvania.
Northeast Utilities subsidiaries provide electric service to over 1.7 million
customers in Connecticut, New Hampshire and western Massachusetts. CEI expects
to complete its purchase of Northeast Utilities within 12 to 18 months.
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USE OF PROCEEDS
Unless we inform you otherwise in a supplement to this prospectus, we anticipate
using any net proceeds received by us from the sale of the debt securities for
general corporate purposes, including:
Repayment of short term debt,
Repurchase, retirement or refinancing of other securities, and
Funding of construction expenditures.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth Con Edison's ratio of earnings to fixed
charges for the periods indicated:
Twelve Months Ended Year Ended December 31,
September 30, 1999 1998 1997 1996 1995 1994
4.38 4.36 4.09 4.18 4.20 4.58
The ratio of earnings to fixed charges has been computed based upon
net income plus Federal income tax, Federal income tax deferred, investment tax
credits deferred and fixed charges. Fixed charges include interest on long-term
debt and other interest expense, amortization of debt expense, discount and
premium, and the interest component of rentals.
DESCRIPTION OF SECURITIES
The debt securities are to be issued under an Indenture, dated as of
December 1, 1990, between Con Edison and The Chase Manhattan Bank, as Trustee
("Trustee"), (successor to The Chase Manhattan Bank (National Association)), as
amended and supplemented by a First Supplemental Indenture, dated as of March 6,
1996 (the Indenture, as amended and supplemented, is herein referred to as the
"Indenture"), copies of which are included as exhibits to the registration
statement of which this prospectus is a part. Con Edison may also enter into one
or more additional indentures with other trustees with respect to certain of the
debt securities. Any such indenture would contain covenants and other provisions
similar to those described below. Reference is made to the prospectus supplement
regarding any additional indentures under which Debt securities will be issued.
The debt securities will be unsecured general obligations of Con Edison
ranking equally and ratably in right of payment with the unsecured debt
securities of Con Edison issued under the Indenture that are not subordinated
obligations of Con Edison ("Subordinated Securities") and the unsecured
promissory notes of Con Edison issued as collateral for, and in consideration of
the net proceeds of, a like amount of tax-exempt revenue bonds issued by New
York State Energy Research and Development Authority; provided, however, that if
so provided in the prospectus supplement relating to a series of debt
securities, the debt securities will be Subordinated Securities.
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There is no requirement that future issues of debt securities of Con
Edison be issued under the Indenture, and Con Edison will be free to employ
other indentures or documentation, containing provisions different from those
included in the Indenture or applicable to one or more issues of Securities, in
connection with future issues of such other debt securities.
The Indenture does not specifically restrict the ability of Con Edison to
engage in transactions which could have the effect of increasing the ratio of
debt to equity capitalization of Con Edison or a successor corporation. For
example, the Indenture does not limit the amount of indebtedness of Con Edison,
the payment of dividends by Con Edison or the acquisition by Con Edison of any
of the equity securities of Con Edison or CEI. The Indenture also permits Con
Edison to merge or consolidate or to transfer its assets, subject to certain
conditions (see "Consolidation, Merger and Sale" below). Con Edison must obtain
approvals from state and/or federal regulatory bodies to merge or consolidate
or, with limited exceptions, to issue securities or transfer assets.
The following summary of the Indenture does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Indenture,
including the definitions therein of certain terms.
General: The Indenture provides that the debt securities offered and other
unsecured debt securities of the Company, without limitation as to aggregate
principal amount (collectively the "Indenture Securities"), may be issued in one
or more series, in each case as authorized from time to time by Con Edison.
Reference is made to the prospectus supplement relating to the debt
securities offered for the following terms:
(1) the title of the debt securities;
(2) the aggregate principal amount of the debt securities;
(3) the percentage of the principal amount representing the price for
which the debt securities shall be issued;
(4) the date or dates on which the principal of, and premium, if any, on
the debt securities shall be payable;
(5) the rate or rates (which may be fixed or variable) at which the debt
securities shall bear interest, if any, or the method by which such
rate or rates shall be determined;
(6) if the amount of payments of the principal of, premium, if any, or
interest, if any, on the debt securities may be determined with
reference to an index, formula or other method, the manner in which
such amounts shall be determined;
(7) the date or dates from which any such interest shall accrue, or the
method by which such date or dates shall be determined, the dates on
which any such interest shall be payable and any record dates
therefor;
(8) the place or places where the principal of, and premium, if any, and
interest, if any, on the debt securities shall be payable;
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(9) the period or periods, if any, within which, the price or prices at
which, and the terms and conditions upon which the debt securities
may be redeemed, in whole or in part, at the option of Con Edison;
(10) the obligation, if any, of Con Edison to redeem, purchase or repay
the debt securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof and the period or
periods within which, the price or prices at which, and the terms
and conditions upon which the debt securities shall be redeemed,
purchased or repaid pursuant to such obligation;
(11) whether the debt securities are to be issued in whole or in part in
the form of one or more Global Securities and, if so, the identity
of the Depositary for such Global Security or Global Securities;
(12) if other than $1,000 or an integral multiple thereof, the
denominations in which the debt securities shall be issued;
(13) if other than the principal amount thereof, the portion of the
principal amount of the debt securities payable upon declaration of
acceleration of the maturity of the debt securities;
(14) any deletions from or modifications of or additions to the Events of
Default set forth in Section 6.01 of the Indenture pertaining to the
debt securities;
(15) the provisions, if any, relating to the cancellation and
satisfaction of the Indenture with respect to the debt securities
prior to the maturity thereof pursuant to Section 12.02 of the
Indenture (see "Satisfaction and Discharge of Indenture;
Defeasance");
(16) the terms, if any, upon which Con Edison may elect not to pay
interest on an interest payment date;
(17) the provisions, if any, relating to the subordination of the debt
securities pursuant to Article 15 of the Indenture (see
"Subordination"); and
(18) any other terms of the debt securities not inconsistent with the
provisions of the Indenture and not adversely affecting the rights
of any other series of Indenture Securities then outstanding.
(Section 2.03)
Con Edison may authorize the issuance and provide for the terms of a
series of Indenture Securities pursuant to a resolution of its Board of Trustees
or any duly authorized committee thereof or pursuant to a supplemental
indenture. The provisions of the Indenture described above permit Con Edison, in
addition to issuing Indenture Securities with terms different from those of
Indenture Securities previously issued, to "reopen" a previous issue of a series
of Indenture Securities and to issue additional Indenture Securities of such
series.
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The Indenture Securities will be issued only in registered form without
coupons and, unless otherwise provided with respect to a series of Indenture
Securities, in denominations of $1,000 and integral multiples thereof. (Section
2.02) Indenture Securities of a series may be issued in whole or in part in the
form of one or more Global Securities (see "Global Securities"). One or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of outstanding Indenture Securities of
the series to be represented by such Global Security or Global Securities.
(Section 2.01) No service charge will be made for any transfer or exchange of
Indenture Securities, but Con Edison may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 2.05).
One or more series of the Indenture Securities may be issued with the same
or various maturities at par or at a discount. Debt securities bearing no
interest or interest at a rate which at the time of issuance is below the market
rate ("Original Issue Discount Securities") will be sold at a discount (which
may be substantial) below their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the prospectus supplement
relating thereto.
Subordination: If the prospectus supplement relating to a particular
series of Indenture Securities so provides, such securities will be Subordinated
Securities and the payment of the principal of, premium, if any, and interest on
the Subordinated Securities will be subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness to the extent set forth
in the next paragraph. (Section 15.01)
In the event (a) of any distribution of assets of Con Edison in
bankruptcy, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors, or any other marshalling of assets and liabilities
of Con Edison, except for a distribution in connection with a consolidation,
merger, sale, transfer or lease permitted under the Indenture (see
"Consolidation, Merger and Sale"), or (b) the principal of any Senior
Indebtedness shall have been declared due and payable by reason of an event of
default with respect thereto and such event of default shall not have been
rescinded, then the holders of Subordinated Securities will not be entitled to
receive or retain any payment, or distribution of assets of Con Edison, in
respect of the principal of, premium, if any, and interest on the Subordinated
Securities until the holders of all Senior Indebtedness receive payment of the
full amount due in respect of the principal of, premium, if any, and interest on
the Senior Indebtedness or provision for such payment on the Senior Indebtedness
shall have been made. (Section 15.02)
Subject to the payment in full of all Senior Indebtedness, the holders of
the Subordinated Securities shall be subrogated to the rights of the holders of
the Senior Indebtedness to receive payments or distributions applicable to the
Senior Indebtedness until all amounts owing on the Subordinated Securities shall
be paid in full. (Section 15.03)
"Senior Indebtedness" means all indebtedness of Con Edison for the
repayment of money borrowed (whether or not represented by bonds, debentures,
notes or other securities) other than the indebtedness evidenced by the
Subordinated Securities and any indebtedness subordinated to, or subordinated on
parity with, the Subordinated Securities. "Senior Indebtedness" does not include
customer deposits or other amounts securing obligations of others to Con Edison.
(Section 15.01)
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The Indenture does not limit the aggregate amount of Senior Indebtedness
that Con Edison may issue. As of September 30, 1999, $4.0 billion of Senior
Indebtedness was outstanding.
Redemption: If the prospectus supplement relating to a particular series
of Indenture Securities so provides, such securities will be subject to
redemption at the option of Con Edison. Notice of any redemption of Indenture
Securities shall be given to the registered holders of such securities not less
than 30 days nor more than 60 days prior to the date fixed for redemption. If
less than all of a series of Indenture Securities are to be redeemed, the
Trustee shall select, in such manner as in its sole discretion it shall deem
appropriate and fair, the Indenture Securities of such series or portions
thereof to be redeemed.
Global Securities: The Indenture Securities of a series may be issued in
whole or in part in the form of one or more Global Securities that will be
deposited with, or on behalf of, the Depositary identified in the prospectus
supplement relating thereto. Unless and until it is exchanged in whole or in
part for Indenture Securities in definitive form, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary. (Sections
2.01 and 2.05)
The specific terms of the depositary arrangement with respect to any
Indenture Securities of a series will be described in the prospectus supplement
relating thereto. Con Edison anticipates that the following provisions will
apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book entry registration and transfer system, the
respective principal amounts of the Indenture Securities represented by such
Global Security to the accounts of institutions that have accounts with such
Depositary ("participants"). The accounts to be credited shall be designated by
the underwriters through which such Indenture Securities were sold. Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
for such Global Security or by participants or persons that hold through
participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Indenture Securities
represented by such Global Security for all purposes under the Indenture. Except
as set forth below, owners of beneficial interests in a Global Security will not
be entitled to have Indenture Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Indenture Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture.
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Payments of principal of, premium, if any, and interest, if any, on
Indenture Securities registered in the name of or held by a Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security representing such Indenture
Securities. None of Con Edison, the Trustee or any paying agent for such
Indenture Securities will have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in a Global Security for such Indenture Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Con Edison expects that the Depositary for Indenture Securities of a
series, upon receipt of any payment of principal, premium, if any, or interest,
if any, in respect of a Global Security will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of such Depositary. Con Edison also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities registered in "street
name," and will be the responsibility of such participants.
If a Depositary for Indenture Securities of a series is at any time
unwilling or unable to continue as Depositary and a successor depositary is not
appointed by Con Edison within 90 days, Con Edison will issue Indenture
Securities of such series in definitive form in exchange for the Global Security
or Global Securities representing the Indenture Securities of such series. In
addition, Con Edison may at any time and in its sole discretion determine not to
have any Indenture Securities of a series represented by one or more Global
Securities and, in such event, will issue Indenture Securities of such series in
definitive form in exchange for the Global Security or Global Securities
representing such Indenture Securities. Further, if Con Edison so specifies with
respect to the Indenture Securities of a series, each person specified by the
Depositary of the Global Security representing Indenture Securities of such
series may, on terms acceptable to Con Edison and the Depositary for such Global
Security, receive Indenture Securities of the series in definitive form. In any
such instance, each person so specified by the Depositary of the Global Security
will be entitled to physical delivery in definitive form of Indenture Securities
of the series represented by such Global Security equal in principal amount to
such person's beneficial interest in the Global Security.
Payments and Paying Agents: Payment of principal of and premium, if any,
on Indenture Securities will be made against surrender of such Indenture
Securities at The Bank of New York, 101 Barclay Street, Stock Transfer Division,
New York, New York 10286. Unless otherwise indicated in the prospectus
supplement, payment of any installment of interest on Indenture Securities will
be made to the person in whose name such Indenture Security is registered at the
close of business on the record date for such interest. Unless otherwise
indicated in the prospectus supplement, payments of such interest will be made
at The Bank of New York, or by a check mailed to each holder of an Indenture
Security at such holder's registered address.
All moneys paid by Con Edison to a paying agent for the payment of
principal of, premium, if any, or interest, if any, on any Indenture Security
that remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to Con Edison and the
holder of such Indenture Security entitled to receive such payment will
thereafter look only to Con Edison for payment thereof. (Section 12.05) However,
any such payment shall be subject to escheat pursuant to state abandoned
property laws.
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Consolidation, Merger and Sale: The Indenture permits Con Edison, without
the consent of the holders of any of the Indenture Securities, to consolidate
with or merge into any other corporation or sell, transfer or lease its assets
as an entirety or substantially as an entirety to any person, provided that: (i)
the Successor is a corporation organized under the laws of the United States of
America or any state thereof; (ii) the Successor assumes Con Edison's
obligations under the Indenture and the Indenture Securities; (iii) immediately
after giving effect to the transaction, no Event of Default (see "Default and
Certain Rights on Default") and no event that, after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and be continuing;
and (iv) certain other conditions are met. (Section 11.02) The Indenture does
not restrict the merger of another corporation into Con Edison.
Modification of the Indenture: The Indenture contains provisions
permitting Con Edison and the Trustee, without the consent of the holders of the
Indenture Securities, to establish, among other things, the form and terms of
any series of Indenture Securities issuable thereunder by one or more
supplemental indentures, and, with the consent of the holders of a majority in
aggregate principal amount of the Indenture Securities of any series at the time
outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture with respect
to Indenture Securities of such series, or modifying in any manner the rights of
the holders of the Indenture Securities of such series; provided, however, that
no such supplemental indenture shall (i) extend the fixed maturity, or the
earlier optional date of maturity, if any, of any Indenture Security of a
particular series or reduce the principal amount thereof or the premium thereon,
if any, or reduce the rate or extend the time of payment of interest thereon, or
make the principal thereof or premium, if any, or interest thereon payable in
any coin or currency other than that provided in the Indenture Security, without
the consent of the holder of each Indenture Security so affected, or (ii) reduce
the principal amount of Indenture Securities of any series, the holders of which
are required to consent to any such supplemental indenture, without the consent
of the holders of all Indenture Securities of such series outstanding
thereunder. (Sections 10.01 and 10.02)
Default and Certain Rights on Default: The Indenture provides that the
Trustee or the holders of 25% or more in aggregate principal amount of Indenture
Securities of a series outstanding thereunder may declare the principal of all
Indenture Securities of such series to be due and payable immediately, if any
Event of Default with respect to such series of Indenture Securities shall occur
and be continuing. However, if all defaults with respect to Indenture Securities
of such series (other than non-payment of accelerated principal) are cured, the
holders of a majority in aggregate principal amount of the Indenture Securities
of such series outstanding thereunder may waive the default and rescind the
declaration and its consequences. Events of Default with respect to a series of
Indenture Securities include (unless specifically deleted in the supplemental
indenture or Board Resolution under which such series of Indenture Securities is
issued, or modified in any such supplemental indenture):
(i) failure to pay interest when due on any Indenture Security of such
series, continued for 30 days;
(ii) failure to pay principal or premium, if any, when due on any
Indenture Security of such series;
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(iii) failure to perform any other covenant of Con Edison in the Indenture
or the Indenture Securities of such series (other than a covenant
included in the Indenture or the Indenture Securities solely for the
benefit of series of Indenture Securities other than such series),
continued for 60 days after written notice from the Trustee or the
holders of 25% or more in aggregate principal amount of the
Indenture Securities of such series outstanding thereunder;
(iv) certain events of bankruptcy, insolvency or reorganization; and
(v) any other Event of Default as may be specified for such series.
(Section 6.01)
The Indenture provides that the holders of a majority in aggregate
principal amount of the Indenture Securities of any series outstanding
thereunder may, subject to certain exceptions, direct the time, method and place
of conducting any proceeding for any remedy available to, or exercising any
power or trust conferred upon, the Trustee with respect to Indenture Securities
of such series and may on behalf of all holders of Indenture Securities of such
series waive any past default and its consequences with respect to Indenture
Securities of such series, except a default in the payment of the principal of
or premium, if any, or interest on any of the Indenture Securities of such
series. (Section 6.06)
Holders of Indenture Securities of any series may not institute any
proceeding to enforce the Indenture unless the Trustee thereunder shall have
refused or neglected to act for 60 days after a request and offer of
satisfactory indemnity by the holders of 25% or more in aggregate principal
amount of the Indenture Securities of such series outstanding thereunder, but
the right of any holder of Indenture Securities of any series to enforce payment
of principal of or premium, if any, or interest on the holder's Indenture
Securities when due shall not be impaired.
(Section 6.04)
The Trustee is required to give the holders of Indenture Securities of any
series notice of defaults with respect to such series (Events of Default
summarized above, exclusive of any grace period and irrespective of any
requirement that notice of default be given) known to it within 90 days after
the happening thereof, unless cured before the giving of such notice, but,
except for defaults in payments of principal of, premium, if any, or interest on
the Indenture Securities of such series, the Trustee may withhold notice if and
so long as it determines in good faith that the withholding of such notice is in
the interests of such holders.
(Section 6.07)
Con Edison is required to deliver to the Trustee each year an Officers'
Certificate stating whether such officers have obtained knowledge of any default
by Con Edison in the performance of certain covenants and, if so, specifying the
nature thereof. (Section 4.06)
Concerning the Trustee: The Indenture provides that the Trustee shall,
prior to the occurrence of any Event of Default with respect to the Indenture
Securities of any series and after the curing or waiving of all Events of
Default with respect to such series which have occurred, perform only such
duties as are specifically set forth in the Indenture. During the existence of
any Event of Default with respect to the Indenture Securities of any series, the
Trustee shall exercise such of the rights and powers vested in it under the
Indenture with respect to such series and use the same degree of care and skill
in their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs. (Section 7.01)
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The Trustee may acquire and hold Indenture Securities and, subject to
certain conditions, otherwise deal with Con Edison as if it were not Trustee
under the Indenture. (Section 7.04)
The Chase Manhattan Bank, which is the Trustee under the Indenture, is a
participating bank under Con Edison's revolving credit agreements, and is a
depository for funds and performs other services for, and transacts other
banking business with, Con Edison in the normal course of business.
Satisfaction and Discharge of Indenture; Defeasance: The Indenture may be
discharged upon payment of the principal of, premium, if any, and interest on
all the Indenture Securities and all other sums due under the Indenture. In
addition, the Indenture provides that if, at any time after the date of the
Indenture, Con Edison, if so permitted with respect to Indenture Securities of a
particular series, shall deposit with the Trustee, in trust for the benefit of
the holders thereof, (i) funds sufficient to pay, or (ii) such amount of
obligations issued or guaranteed by the United States of America as will, or
will together with the income thereon without consideration of any reinvestment
thereof, be sufficient to pay all sums due for principal of, premium, if any,
and interest on the Indenture Securities of such series, as they shall become
due from time to time, and certain other conditions are met, the Trustee shall
cancel and satisfy the Indenture with respect to such series to the extent
provided therein. (Sections 12.01 and 12.02) The prospectus supplement
describing the Indenture Securities of such series will more fully describe the
provisions, if any, relating to such cancellation and satisfaction of the
Indenture with respect to such series.
Reports Furnished Securityholders: Con Edison will furnish the holders of
Indenture Securities copies of all annual financial reports distributed to its
stockholders generally as soon as practicable after the mailing of such material
to the stockholders. (Section 4.07)
PLAN OF DISTRIBUTION
Con Edison will offer the debt securities through one or more
underwriters. The names of the managing underwriter or underwriters and any
other underwriters, and the terms of the transaction, including compensation of
the underwriters and dealers, if any, will be set forth in the prospectus
supplement relating to the offering of the debt securities. Only underwriters
named in a prospectus supplement will be deemed to be underwriters in connection
with the debt securities described therein. Firms not so named will have no
direct or indirect participation in the underwriting of such debt securities,
although such a firm may participate in the distribution of such debt securities
under circumstances entitling it to a dealer's commission. It is anticipated
that any underwriting agreement pertaining to any debt securities will (1)
entitle the underwriters to indemnification by Con Edison against certain civil
liabilities under the Securities Act of 1933, as amended, or to contribution for
payments the underwriters may be required to make in respect thereof, (2)
provide that the obligations of the underwriters will be subject to certain
conditions precedent, and (3) provide that the underwriters generally will be
obligated to purchase all such debt securities if any are purchased. The
underwriters may engage in transactions with, or perform services for, Con
Edison in the ordinary course of business.
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In connection with an offering made hereby, the underwriters may purchase
and sell the debt securities in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the underwriters in connection with an offering.
Stabilizing transactions consist of certain bids or purchases for the purpose of
preventing or delaying a decline in the market price of the debt securities, and
short positions created by the underwriters involve the sale by the underwriters
of a greater aggregate principal amount of debt securities than they are
required to purchase from Con Edison. The underwriters also may impose a penalty
bid, whereby selling concessions allowed to broker-dealers in respect of the
debt securities sold in the offering may be reclaimed by the underwriters if
such debt securities are repurchased by the underwriters in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the debt securities, which may be higher than the
price that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be affected
in the over-the-counter market or otherwise.
The anticipated date of delivery of the debt securities will be as set
forth in the prospectus supplement relating to the offering of the debt
securities.
LEGAL MATTERS
The validity of the debt securities and certain other related legal
matters will be passed upon for Con Edison by Edwin W. Scott, Esq., Vice
President and Deputy General Counsel. Certain legal matters in connection with
the debt securities will be passed upon for the Underwriters by Dewey Ballantine
LLP, 1301 Avenue of the Americas, New York, New York 10019-6092.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to Con Edison's Form 10-K for the year ended December 31, 1998, have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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