File No. 70-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 6
(Post-Effective No. 3)
TO
FORM U-1
APPLICATION OR DECLARATION
under
The Public Utility Holding Company Act of 1935
ALABAMA POWER COMPANY GULF POWER COMPANY
600 North 18th Street 500 Bayfront Parkway
Birmingham, Alabama 35291 Pensacola, Florida 32501
GEORGIA POWER COMPANY MISSISSIPPI POWER COMPANY
333 Piedmont Avenue, N.E. 2992 West Beach
Atlanta, Georgia 30308 Gulfport, Mississippi 39501
SAVANNAH ELECTRIC AND POWER COMPANY
600 Bay Street, East
Savannah, Georgia 31401
(Name of company or companies filing this statement
and addresses of principal executive offices)
THE SOUTHERN COMPANY
(Name of top registered holding company parent of each
applicant or declarant)
Art P. Beattie, Vice President, Warren E. Tate, Secretary
Secretary and Treasurer and Treasurer
Alabama Power Company Gulf Power Company
600 North 18th Street 500 Bayfront Parkway
Birmingham, Alabama 35291 Pensacola, Florida 32501
Judy M. Anderson, Vice President Michael W. Southern, Vice
and Corporate Secretary President, Secretary and Treasurer
Georgia Power Company Mississippi Power Company
333 Piedmont Avenue, N.E. 2992 West Beach
Atlanta, Georgia 30308 Gulfport, Mississippi 39501
Kirby R. Willis, Vice President, Treasurer
and Chief Financial Officer
Savannah Electric and Power Company
600 Bay Street, East
Savannah, Georgia 31401
(Names and addresses of agents for service)
The Commission is requested to mail signed copies of all orders,
notices and communications to:
W. L. Westbrook John D. McLanahan, Esq.
Financial Vice President Troutman Sanders LLP
The Southern Company 600 Peachtree Street, N.E.
64 Perimeter Center East Suite 5200
Atlanta, Georgia 30346 Atlanta, Georgia 30308-2216
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
Item 1 is hereby amended by adding thereto the following:
"Alabama proposes, in addition to a Special Purpose
Subsidiary organized as either a limited liability company or a
limited partnership, to organize its Special Purpose Subsidiary
as a trust, Alabama Power Capital Trust I ("Alabama Power
Capital"). The proposed Preferred Securities transactions
effected through Alabama Power Capital will be carried out in the
same manner, will have the same terms and conditions, and will be
subject to the same rules and regulations as the proposed
Preferred Securities transactions effected through a Special
Purpose Subsidiary organized as a limited liability company or
limited partnership.
Alabama Power Capital is a statutory business trust
formed under Delaware law pursuant to the filing of a certificate
of trust with the Delaware Secretary of State on November 8,
1995. Alabama Power Capital's business is defined in a trust
agreement, executed by Alabama, as Depositor, and the Delaware
Trustee (the "Trustee") thereunder, filed as Exhibit A-1 hereto.
Alabama, as grantor of Alabama Capital, selected Chemical Bank as
the Trustee. It is proposed that this trust agreement will be
amended and restated in its entirety, substantially in the form
of Exhibit A-2 hereto, on the date of the offering (the "Trust
Agreement"). Alabama Power Capital exists for the exclusive
purposes of (i) issuing the Trust Preferred Securities (as
defined below) and the Trust Common Securities (as defined
below)(the Trust Preferred Securities and the Trust Common
Securities herein called the "Trust Securities") which represent
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the undivided beneficial interests in the assets of Alabama Power
Capital, (ii) investing the gross proceeds of the Trust
Securities in the Junior Subordinated Notes (as defined below)
and (iii) engaging in only those other activities necessary,
appropriate, convenient or incidental thereto. Alabama Power
Capital has a term of approximately thirty (30) years, but may
terminate earlier.
It is proposed that Alabama Power Capital will issue
3,880,000 of its Trust Preferred Securities (the "Trust Preferred
Securities"), with a liquidation preference of $25 per Trust
Preferred Security and an aggregate liquidation preference of
$97,000,000. It is contemplated that the interest rate to be
borne by the Trust Preferred Securities (which shall also be the
rate for the Trust Common Securities and Junior Subordinated
Notes) will be a fixed rate which shall not be above an annual
rate of 10% of the liquidation preference of $25 per Trust
Preferred Security (the "Interest Rate"). It is proposed that
Alabama Power Capital will issue its Trust Common Securities,
registered in the name of Alabama, in an aggregate amount of
$3,000,000 (the "Trust Common Securities") to Alabama. The
proceeds realized by Alabama Power Capital from the sale of the
Trust Preferred Securities, together with Alabama's payment to
Alabama Power Capital in the amount of $3,000,000 for the Trust
Common Securities, will be loaned to Alabama, such loan to be
evidenced by $100,000,000 aggregate principal amount of Alabama's
Series A Junior Subordinated Notes (the "Junior Subordinated
Notes"). It is proposed that the Junior Subordinated Notes will
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mature not more than thirty (30) years from the first day of the
month in which they are initially issued. It is also proposed
that the Junior Subordinated Notes will not be convertible into
any other securities or assets of Alabama or Alabama Capital
Trust.
The holders of the Trust Preferred Securities and the
Trust Common Securities will receive as distributions on payment
dates their pro rata shares of payments received by Alabama Power
Capital on the Junior Subordinated Notes, except that, in the
event of default or partial payment by Alabama on the Junior
Subordinated Notes, the payment entitlement of Alabama as holder
of the Trust Common Securities will be subordinated to the
payment entitlement of the investors as holders of the Trust
Preferred Securities. Similarly, if on liquidation of Alabama
Power Capital, the proceeds from the sale or other liquidation of
Alabama Power Capital's assets were not sufficient to fully
satisfy the payment entitlements of the Trust Preferred
Securities and the Trust Common Securities with respect to
principal, the payment entitlement with respect to principal of
Alabama as holder of the Trust Common Securities will be
subordinated to the payment entitlement of the investors as
holders of the Trust Preferred Securities. The Trust Agreement
will provide that holders of Trust Preferred Securities will have
only the rights expressly granted to them by the Trust Agreement,
including the right to receive distributions and certain
consensual rights expressly provided.
It is proposed that Alabama Power Capital will issue and
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sell the Trust Preferred Securities pursuant to an underwriting
agreement, substantially in the form of Exhibit B-4 hereto, among
Alabama Power Capital, Alabama and a group of underwriters headed
by Lehman Brothers Inc. Pursuant to such underwriting agreement,
such underwriters will purchase the Trust Preferred Securities
from Alabama Power Capital at a purchase price of $25 per Trust
Preferred Security (an aggregate of $97,000,000). In addition,
in view of the fact that the proceeds of the sale of the Trust
Preferred Securities will be loaned to Alabama, Alabama will
agree to pay to the underwriters, as compensation for their
services, a maximum of $.7875 per Trust Preferred Security;
provided, that such compensation will not exceed $.50 per Trust
Preferred Security sold to certain institutions.
Cash distributions on the Trust Securities will be
cumulative from the date of original issuance at the Interest
Rate and will be payable quarterly in arrears as described in the
Trust Agreement. Such distributions in arrears for more than one
quarter will bear interest thereon at the Interest Rate. The
Junior Subordinated Notes will similarly bear interest at the
Interest Rate, payable quarterly in arrears. Alabama will have
the right from time to time to defer the payment of interest on
the Junior Subordinated Notes for a period not exceeding 20
consecutive quarters, at the end of each of which extension
periods all accrued and unpaid interest (together with interest
thereon at the Interest Rate) will be due and payable. As a
consequence of any such extension of the interest payment period
on the Junior Subordinated Notes, quarterly distributions on the
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Trust Preferred Securities would be correspondingly deferred.
Alabama will guarantee (the "Guarantee") the following
payments with respect to the Trust Preferred Securities to the
extent not paid by Alabama Power Capital:
(i) any accrued and unpaid distributions that
are required to be paid on the Trust Preferred
Securities but if and only if and to the extent
Alabama Power Capital shall have funds legally
and immediately available therefor,
(ii) the redemption price, including all accrued
and unpaid distributions to the date of
redemption, with respect to any Trust Preferred
Securities called for redemption by Alabama Power
Capital but if and only to the extent that
Alabama Power Capital has funds legally and
immediately available therefor, and
(iii) upon a dissolution, winding-up or
termination of Alabama Power Capital (other than
in connection with the distribution of Junior
Subordinated Notes to the holders of Trust
Preferred Securities (as described below) or the
redemption of all the Trust Preferred
Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid
distributions on the Trust Preferred Securities
to the date of payment, to the extent Alabama
Power Capital has funds legally and immediately
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available therefor, and (b) the amount of assets
of Alabama Power Capital remaining available for
distribution to holders of Trust Preferred
Securities in liquidation of Alabama Power
Capital.
The Trust Securities are subject to mandatory redemption
upon repayment of the Junior Subordinated Notes at maturity or
upon their earlier redemption. The Junior Subordinated Notes may
be redeemed, in whole or in part, at the option of Alabama at any
time on or after five (5) years from the date of their issuance.
In addition, upon the occurrence of certain special events
arising from a change in law or a change in legal interpretation
or other specified circumstances relating to tax matters and the
Investment Company Act of 1940, as amended, Alabama shall elect
to either (i) redeem the Junior Subordinated Notes (and thus
cause the redemption of the Trust Securities), or (ii) dissolve
Alabama Power Capital and, after satisfaction of creditors as
required by applicable Delaware law, cause Junior Subordinated
Notes to be distributed to the holders of the Trust Preferred
Securities in liquidation of Alabama Power Capital. In the case
of such a special event, the Trust shall have the opportunity to
eliminate such special event within ninety (90) days after the
occurrence thereof by taking some ministerial action, such as
filing a form or making an election, or pursuing some other
reasonable measure, which would have no adverse effect on Alabama
Power Capital, Alabama, or the holders of the Trust Preferred
Securities.
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Unless an event of default occurs and is continuing under
the Trust Agreement, (i) Alabama will have the right to replace
the Trustee, subject to any Trustee eligibility requirements set
forth in the Trust Agreement, and (ii) consensual rights
exercised by holders of the Trust Preferred Securities generally
will be exercised by Alabama, subject to certain protections for
holders of the Trust Preferred Securities. If an event of
default occurs and is continuing under the Trust Agreement, the
holders of the Trust Preferred Securities would have the right to
replace the Trustee. The Trustee would be required under the
Trust Agreement to enforce Alabama Power Capital's rights under
the Junior Subordinated Notes.
It is contemplated that, for Federal income tax purposes,
Alabama Power Capital will be treated as a passive grantor trust
and not as a partnership. Accordingly, as in the case of a
limited liability company or limited partnership Special Purpose
Subsidiary, Alabama Power Capital will not be subject to tax and
Alabama and investors holding Trust Preferred Securities will be
treated as the owners of Alabama Power Capital and will be
required to include in income their proportionate shares of the
income of Alabama Power Capital. However, the information
reporting procedure for Alabama Power Capital would differ from
the procedures used when the Special Purpose Subsidiary is a
limited liability company or a limited partnership. Investors
would receive tax reporting information from their brokers on an
IRS Form 1099, rather than the Schedule K-1.
It is anticipated that Alabama Power Capital will be
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exempt from status as an "investment company" under the
Investment Company Act of 1940, as amended, in reliance on the
finance subsidiary rule (Rule 3a-5).
The proceeds from the sale of the Trust Preferred
Securities will be loaned by Alabama Power Capital to Alabama,
such loan to be evidenced by the Junior Subordinated Notes and
ultimately will be used by Alabama for general corporate
purposes, including repayment of outstanding short-term debt.
None of such proceeds will be used by Alabama or any associate
company thereof for the acquisition of an interest in an "exempt
wholesale generator" or a "foreign utility company" as defined in
Sections 32 and 33, respectively, of the Act.
It is considered that the record is now complete with
respect to the issuance by Alabama Power Capital of the Trust
Preferred Securities and the related issuance by Alabama of the
Junior Subordinated Notes and the Guarantee as described herein.
Accordingly, an order with respect to such transactions is hereby
requested. It is hereby requested that jurisdiction be reserved
with respect to the other transactions proposed in these
proceedings."
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees and expenses to be incurred by Alabama
in connection herewith are as follows:
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Filing fees - Securities and Exchange Commission . $ 33,450
Fees and Expenses of Trustees . . . . . . . . . . . 30,000
Listing on New York Stock Exchange . . . . . . . . 44,300
Printing charges . . . . . . . . . . . . . . . . . 30,000
Rating Agency Fees . . . . . . . . . . . . . . . . 40,000
Services of Southern Company Services, Inc. . . . . 30,000
Fees and Expenses of counsel . . . . . . . . . . . 125,000
Blue sky fees and expenses . . . . . . . . . . . . 2,500
Fees of accountants, Arthur Andersen LLP . . . . . 25,000
Miscellaneous . . . . . . . . . . . . . . . . . . . 4,750
TOTAL . . . . . . . . . . . . . . . . . . . . . . $365,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
Item 3 is hereby amended by adding the following thereto:
"Rule 54 Analysis. Under Rule 54, in determining whether
to approve the issue or sale of a security by a registered
holding company for purposes other than the acquisition of an
"exempt wholesale generator" or "foreign utility company", or
other transactions by such registered holding company or its
subsidiaries other than with respect to "exempt wholesale
generators" or "foreign utility companies," the Commission shall
not consider the effect of the capitalization or earnings of any
subsidiary which is an "exempt wholesale generator" or a "foreign
utility company" upon the registered holding company system if
the "safe harbor" conditions of Rule 53 are satisfied.
Southern currently meets all of the "safe harbor"
conditions of Rule 53. Southern's "aggregate investment" in
"exempt wholesale generators" and "foreign utility companies" at
October 31, 1995 was approximately $1.250 billion, representing
approximately 38.0% of Southern's "consolidated retained
earnings," as defined in Rule 53(a)(1)(ii), for the four quarters
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ended September 30, 1995 ($3.292 billion). Furthermore, Southern
has and will continue to comply with the record keeping
requirements of Rule 53(a)(2) concerning affiliated "exempt
wholesale generators" and "foreign utility companies." In
addition, as required by Rule 53(a)(3), no more than 2% of the
employees of Southern's operating utility subsidiaries will, at
any one time, directly or indirectly, render services to "exempt
wholesale generators" and "foreign utility companies." Finally,
since none of the circumstances described in Rule 53(b) exists,
the provisions of Rule 53(a) are not made inapplicable by Rule
53(b)."
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
A. Exhibits:
A-1 - Trust Agreement of Alabama Power Capital Trust I.
(Designated in Form S-3 File No. 33-64125, as
Exhibit 4(c).)
A-2 - Form of Amended and Restated Trust Agreement.
(Designated in Form S-3 File No. 33-64125, as
Exhibit 4(d).)
B-1 - Form of Subordinated Note Indenture between
Alabama Power Company and Chemical Bank, as
Trustee. (Designated in Form S-3 File No. 33-
64125, as Exhibit 4(a).)
B-2 - Form of Supplemental Indenture to Subordinated
Note Indenture between Alabama Power Company and
Chemical Bank, as Trustee. (Designated in Form
S-3 File No. 33-64125, as Exhibit 4(b).)
B-3 - Form of Guarantee with respect to Preferred
Securities. (Designated in Form S-3 File No. 33-
64125, as Exhibit 4(g).)
B-4 - Form of Underwriting Agreement. (Designated in
Form S-3 File No. 33-64125, as Exhibit 1.)
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C-1 - Registration Statement under the Securities Act
of 1933. (Filed electronically November 9, 1995,
File No. 33-64125.)
C-2 - Amendment No. 1 to Registration Statement under
the Securities Act of 1933. (Filed electronically
January 11, 1996, File No. 33-64125.)
F-1 - Opinion of Balch & Bingham, counsel for Alabama.
B. Financial Statements.
Balance sheet of Alabama at September 30, 1995.
(Designated in Alabama's Form 10-Q for the quarter ended
September 30, 1995, File No. 1-3164.)
Statements of Income of Georgia for the twelve months
ended September 30, 1995. (Designated in Alabama's Form
10-Q for the quarter ended September 30, 1995, File No.
1-3164.)
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SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this amendment to be signed on their behalf by the undersigned
thereunto duly authorized.
Date: January 16, 1996 ALABAMA POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
GEORGIA POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
GULF POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
MISSISSIPPI POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
SAVANNAH ELECTRIC AND POWER COMPANY
By: /s/Wayne Boston
Wayne Boston, Assistant Secretary
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Exhibit F-1
Balch & Bingham
Birmingham, Alabama
205-251-8100
January 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Re: Statement on Form U-1 of
Alabama Power Company (the "Company") et al.
File No. 70-8461
Ladies and Gentlemen:
We have read the statement on Form U-1, as amended,
referred to above and are furnishing this opinion with respect to
the proposed transactions described therein relating to the
issuance and sale by Alabama Power Capital Trust I ("Alabama
Power Capital") of its Trust Preferred Securities and the related
issuance by the Company of its Guarantee and Junior Subordinated
Notes (all as defined therein).
We are of the opinion that (i) the Company is validly
organized and duly existing as a corporation under the laws of
the State of Alabama, (ii) Alabama Power Capital Trust I has been
duly formed and is validly existing as a statutory business trust
under the laws of the State of Delaware, and (iii) upon the
issuance of your order or orders in this matter permitting such
statement on Form U-1 to become effective with respect to such
proposed transactions, and in the event that the proposed
transactions are consummated in accordance with such statement on
Form U-1 and your order or orders in respect thereof:
(a) all State laws applicable to such proposed
transactions will have been complied with;
(b) the Company's obligations with respect to the
Guarantee and the Junior Subordinated Notes will
be valid and binding obligations of the Company in
accordance with their terms;
(c) Alabama Power Capital's obligations with respect
to the Trust Preferred Securities will be valid
and binding obligations of Alabama Power Capital
in accordance with their terms; and
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Balch & Bingham
Statement on Form U-1 of
Alabama Power Company (the "Company") et al.
File No. 70-8461
Page 2
(d) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by the Company, Alabama Power
Capital, or any associate company of either
thereof.
We hereby give our written consent to the use of this
opinion in connection with the above-mentioned statement on
Form U-1.
Very truly yours,
/s/Balch & Bingham
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