File No. 70-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 10
(Post-Effective No. 7)
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 East Bay Street
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 East Bay Street
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.
270 Peachtree Street, NW Suite 5200
Atlanta, Georgia 30303 Atlanta, Georgia 30308-2216
<PAGE>
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 Subsidiaries as trusts, Alabama Power Capital Trust
II, Alabama Power Capital Trust III and Alabama Power Capital Trust IV
(individually, a "Trust" and collectively, the "Trusts").
Each of the Trusts is a statutory business trust formed under
Delaware law pursuant to the filing of its respective certificate of trust with
the Delaware Secretary of State on November 27, 1996. Each Trust's business is
defined in a separate trust agreement, each such trust agreement executed by
Alabama, as Depositor, and the Delaware Trustee (the "Trustee") thereunder and
filed as Exhibits A-1, A-2 and A-3 hereto. It is proposed that each trust
agreement will be amended and restated in its entirety, substantially in the
forms of Exhibits A-4, A-5 and A-6 hereto, on the date of the offering by such
Trust (the "Trust Agreement"). Each of the Trusts exists for the exclusive
purposes of (i) issuing its Trust Preferred Securities (as defined below) and
its Trust Common Securities (as defined below)(the Trust Preferred Securities
and the Trust Common Securities of each Trust being herein referred to as the
"Trust Securities" of such Trust) which represent the undivided beneficial
interests in the assets of such Trust, (ii) investing the gross proceeds of its
Trust Securities in a series of Junior Subordinated Notes (as defined below) of
Alabama and (iii) engaging in only those other activities necessary,
appropriate, convenient or incidental thereto. The term of each of the Trusts
will be set forth in the related Trust Agreement.
It is proposed that each of the Trusts will issue only one series
of Trust Preferred Securities (the "Trust Preferred Securities"). The aggregate
liquidation amount of the Trust Preferred Securities issued by the Trusts
hereunder will not exceed $250,000,000. The distribution rate to be borne by the
Trust Preferred Securities of each of the Trusts will not exceed 12.5% per annum
(expressed as a percentage of liquidation amount) and shall also be the
distribution rate for the respective Trust Common Securities and the interest
rate for the related Junior Subordinated Notes (the "Securities Rate"). It is
proposed that each of the Trusts will issue its Trust Common Securities (the
"Trust Common Securities"), registered in the name of Alabama, to Alabama. The
Trust Common Securities of each Trust will represent approximately 3% undivided
beneficial interests in the assets of the Trust. The proceeds realized by each
of the Trusts from the sale of its Trust Preferred Securities, together with
Alabama's payment to such Trust for its Trust Common Securities, will be loaned
to Alabama, such loan to be evidenced by a related series of Alabama's Junior
Subordinated Notes (the "Junior Subordinated Notes") equal in aggregate
principal amount to the aggregate liquidation amount of such Trust's Trust
Securities. It is proposed that the Junior Subordinated Notes will have
maturities of up to 50 years and will not be convertible into any other
securities or assets of Alabama or of any of the Trusts.
The holders of Trust Preferred Securities and Trust Common
Securities of each of the Trusts will receive as distributions on payment dates
their pro rata shares of payments received by such Trust on its Junior
Subordinated Notes, except that, in the event of default by Alabama on such
Junior Subordinated Notes, the payment entitlement of Alabama as holder of the
Trust Common Securities of such Trust will be subordinated to the payment
entitlement of the investors as holders of such Trust Preferred Securities. Each
respective Trust Agreement will provide that holders of Trust Preferred
Securities will have only the rights expressly granted to them by such Trust
Agreement, including the right to receive distributions and certain consensual
rights expressly provided.
It is proposed that each of the Trusts will issue and sell its
Trust Preferred Securities pursuant to a separate underwriting agreement among
such Trust, Alabama and the underwriters thereunder. Pursuant to such
underwriting agreement, the underwriters will purchase the Trust Preferred
Securities from such Trust at an aggregate purchase price equal to the aggregate
liquidation amount of such Trust Preferred Securities. 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 the underwriters' compensation for
their services in an amount not exceeding 4% of the aggregate liquidation amount
of such Trust Preferred Securities.
Cash distributions on the respective Trust Securities will be
cumulative from the date of original issuance of such Trust Securities at the
applicable Securities Rate and will be payable periodically in arrears as
described in the related Trust Agreement. Such distributions in arrears for more
than one such period will bear interest thereon at the Securities Rate. Each
related series of Junior Subordinated Notes will similarly bear interest at the
Securities Rate. Alabama will have the right from time to time to defer the
payment of interest on such Junior Subordinated Notes for a period specified in
the related Supplemental Indenture, at the end of each of which extension
periods all accrued and unpaid interest (together with interest thereon at the
Securities Rate) will be due and payable. As a consequence of any such extension
of the interest payment period on the Junior Subordinated Notes, periodic
distributions on the Trust Preferred Securities would be correspondingly
deferred.
Alabama will guarantee (the "Guarantee") the following payments
with respect to the Trust Preferred Securities of each Trust to the extent not
paid by the respective Trust:
(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 such Trust 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 such Trust but if and only to the extent that such Trust has
funds legally and immediately available therefor, and (iii) upon
a dissolution, winding-up or termination of such Trust (other
than in connection with the distribution of Junior Subordinated
Notes to the holders of its Trust Preferred Securities (as
described below) or the redemption of all of the Trust Preferred
Securities of such Trust), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on
its Trust Preferred Securities to the date of payment, to the
extent such Trust has funds legally and immediately available
therefor, and (b) the amount of assets of such Trust remaining
available for distribution to holders of its Trust Preferred
Securities in liquidation of such Trust. Each issue of the Trust
Securities is subject to mandatory redemption upon repayment of
the related Junior Subordinated Notes at maturity or upon their
earlier redemption. Each series of the Junior Subordinated Notes
may be redeemed, in whole or in part, at the option of Alabama at
any time on or after the date set forth in the related
Supplemental Indenture. 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 have the option to redeem the Junior
Subordinated Notes (and thus cause the redemption of the Trust
Securities). Alabama will also have the right at any time to
terminate a Trust and cause the related Junior Subordinated Notes
to be distributed to the holders of the Trust Preferred
Securities of such Trust in liquidation thereof.
It is contemplated that, for Federal income tax purposes, each of
the Trusts 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, none of the Trusts will be subject to
tax and Alabama and investors holding Trust Preferred Securities will be treated
as the owners of the respective Trust and will be required to include in income
their proportionate shares of the income of such Trust. However, the information
reporting procedure for the Trusts 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 each of the Trusts will be 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 its Trust Preferred Securities will
be loaned by each of the Trusts to Alabama, such loan to be evidenced by the
respective Junior Subordinated Notes and ultimately will be used by Alabama in
connection with its ongoing construction program, to pay scheduled maturities
and/or refundings of its securities, to repay short-term indebtedness to the
extent outstanding and for other general corporate purposes. 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 each of the Trusts of its Trust Preferred Securities and the
related issuance by Alabama of the related series of Junior Subordinated Notes
and the Guarantees 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:
Each
Initial Additional
Issuance Issuance
Filing fees - Securities and Exchange Commission..... $ 121,213 --
Fees and Expenses of Trustees........................ 9,500 9,500
Listing on New York Stock Exchange................... 86,300 --
Printing charges..................................... 30,000 10,000
Rating Agency Fees................................... 107,000 65,000
Services of Southern Company Services, Inc........... 30,000 15,000
Fees and Expenses of counsel......................... 90,000 55,000
Blue sky fees and expenses........................... 3,500 3,500
Fees of accountants, Arthur Andersen LLP............. 42,000 25,000
Miscellaneous........................................ 15,487 7,000
-------- --------
TOTAL................................. $ 535,000 $ 190,000
======== ========
<PAGE>
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
Item 3 is hereby amended by adding thereto the following:
"Rule 54 Analysis: The proposed transaction is also subject to
Rule 54, which provides that, in determining whether to approve an application
which does not relate to any "exempt wholesale generator" ("EWG") or "foreign
utility company" ("FUCO"), the Commission shall not consider the effect of the
capitalization or earnings of any such EWG or FUCO which is a subsidiary of a
registered holding company if the requirements of Rule 53(a), (b) and (c) are
satisfied.
The Southern Company ("Southern") currently meets all of the
conditions of Rule 53(a). At December 31, 1996, Southern's "aggregate
investment," as defined in Rule 53(a)(1), in EWGs and FUCOs was approximately
$922,341,743, or about 25.61% of Southern's "consolidated retained earnings,"
also as defined in Rule 53(a)(1), for the four quarters ended September 30, 1996
($3,601 million). In addition, Southern has complied and will continue to comply
with the record-keeping requirements of Rule 53(a)(2), the limitation under Rule
53(a)(3) on the use of Operating Company personnel to render services to EWGs
and FUCOs, and the requirements of Rule 53(a)(4) concerning the submission of
copies of certain filings under the Act to retail rate regulatory commissions.
Accordingly, since the requirements of Rule 53(a) are currently met and none of
the circumstances described in Rule 53(b) has occurred, the provisions of Rule
53(c) are currently inapplicable.
Moreover, even if the effect of the capitalization and earnings
of EWGs and FUCOs in which Southern has an ownership interest upon the Southern
holding company system were considered, there is no basis for the Commission to
withhold or deny approval for the proposal made in this Application-Declaration.
The action requested in the instant filing (viz. approval for certain financing
transactions by Alabama) would not, by itself, or even considered in conjunction
with the effect of the capitalization and earnings of Southern's EWGs and FUCOs,
have a material adverse effect on the financial integrity of the Southern
system, or an adverse impact on Southern's public-utility subsidiaries, their
customers, or the ability of State commissions to protect such public-utility
customers." ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
A. Exhibits:
A-1 - Trust Agreement of Alabama Power Capital Trust II.
(Designated in Form S-3 File Nos. 333-17333,
333-17333-01, 333-17333-02, and 333-17333-03, as
Exhibit 4.4-A.)
A-2 - Trust Agreement of Alabama Power Capital Trust III.
(Designated in Form S-3 File Nos. 333-17333,
333-17333-01, 333-17333-02, and 333-17333-03, as
Exhibit 4.4-B.)
A-3 - Trust Agreement of Alabama Power Capital Trust IV.
(Designated in Form S-3 File Nos. 333-17333,
333-17333-01, 333-17333-02, and 333-17333-03, as
Exhibit 4.4-C.)
A-4 - Form of Amended and Restated Trust Agreement for
Alabama Power Capital Trust II. (Designated in Form S-3
File Nos. 333-17333, 333-17333-01, 333-17333-02, and
333-17333-03, as Exhibit 4.5-A.)
A-5 - Form of Amended and Restated Trust Agreement for
Alabama Power Capital Trust III. (Designated in Form
S-3 File Nos. 333-17333, 333-17333-01, 333-17333-02,
and 333-17333-03, as Exhibit 4.5-B.)
A-6 - Form of Amended and Restated Trust Agreement for
Alabama Power Capital Trust IV. (Designated in Form S-3
File Nos. 333-17333, 333-17333-01, 333-17333-02, and
333-17333-03, as Exhibit 4.5-C.)
B-1 - Form of Subordinated Note Indenture between Alabama
Power Company and The Chase Manhattan Bank, as Trustee.
(Designated in Form S-3 File Nos. 333-17333,
333-17333-01, 333-17333-02, and 333-17333-03, as
Exhibit 4.1.)
B-2 - Form of Supplemental Indenture to Subordinated Note
Indenture between Alabama Power Company and The Chase
Manhattan Bank, as Trustee. (Designated in Form S-3
File Nos. 333-17333, 333-17333-01, 333-17333-02, and
333-17333-03, as Exhibit 4.2.)
B-3 - Forms of Guarantee with respect to Preferred
Securities of Alabama Power Capital Trust II, Alabama
Power Capital Trust III and Alabama Power Capital Trust
IV. (Designated in Form S-3 File Nos. 333-17333,
333-17333-01, 333-17333-02, and 333-17333-03, as
Exhibits 4.8-A, 4.8-B and 4.8-C.)
C-1 - Registration Statement under the Securities Act of
1933. (Filed electronically December 5, 1996, File Nos.
333-17333, 333-17333-01, 333-17333-02, and
333-17333-03.)
B. Financial Statements.
Balance sheet of Alabama at September 30, 1996. (Designated in
Alabama's Form 10-Q for the quarter ended September 30, 1996,
File No. 1-3164.)
Statements of Income of Alabama for the periods ended September
30, 1996. (Designated in Alabama's Form 10-Q for the quarter
ended September 30, 1996, File No. 1-3164.)
<PAGE>
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 10, 1997 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
