File No. 70-8461
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 11
(Post-Effective No. 8)
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:
"Gulf 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, Gulf Power Capital Trust I
and Gulf Power Capital Trust II (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 December 26, 1996. Each Trust's business is
defined in a separate trust agreement, each such trust agreement executed by
Gulf, as Depositor, and the Delaware Trustee (the "Trustee") thereunder and
filed as Exhibits A-1 and A-2 hereto. It is proposed that each trust agreement
will be amended and restated in its entirety, substantially in the forms of
Exhibits A-3 and A-4 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 Gulf
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.
<PAGE>
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 $60,000,000. 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 Gulf, to Gulf. 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
Gulf's payment to such Trust for its Trust Common Securities, will be loaned to
Gulf, such loan to be evidenced by a related series of Gulf'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 Gulf 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 Gulf on such Junior
Subordinated Notes, the payment entitlement of Gulf 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.
<PAGE>
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, Gulf 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
Gulf, Gulf 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. Gulf 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.
<PAGE>
Gulf 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.
<PAGE>
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 Gulf 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, Gulf shall have the option
to redeem the Junior Subordinated Notes (and thus cause the redemption of the
Trust Securities). Gulf 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 Gulf 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).
<PAGE>
The proceeds from the sale of its Trust Preferred Securities will
be loaned by each of the Trusts to Gulf, such loan to be evidenced by the
respective Junior Subordinated Notes and ultimately will be used by Gulf 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 Gulf 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 Gulf 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 Gulf in
connection herewith are as follows:
Each
Initial Additional
Issuance Issuance
Florida Documentary Stamp Tax...................... $210,000 --
Florida intangible personal property tax........... 9,000 --
Filing fees - Securities and Exchange Commission... 18,182 --
Fees and Expenses of Trustees...................... 9,500 9,500
Listing on New York Stock Exchange................. 30,900 --
Printing charges................................... 40,000 10,000
Rating Agency Fees................................. 36,100 20,000
Services of Southern Company Services, Inc......... 40,000 10,000
Fees and Expenses of counsel....................... 65,000 35,000
Blue sky fees and expenses......................... 3,500 3,500
Fees of accountants, Arthur Andersen LLP........... 35,000 25,000
Miscellaneous...................................... 12,818 12,000
---------- ----------
Total................................ $510,000 $125,000
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<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), except for clause (1). Currently, Southern's
"aggregate investment," as defined in Rule 53(a)(1), in EWGs and FUCOs is
approximately $2.3 billion, or about 63% 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). With respect to Rule 53(a)(1), however, the
Commission has determined that Southern's financing of investments in EWGs and
FUCOs in an amount greater than the amount that would otherwise be allowed by
Rule 53(a)(1) would not have either of the adverse effects set forth in Rule
53(c). See The Southern Company, Holding Company Act Release Nos. 26501 and
26646, dated April 1, 1996 and January 15, 1997, respectively.
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.
Further, none of the circumstances described in Rule 53(b) has occurred.
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 Gulf) 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."
<PAGE>
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
A. Exhibits:
A-1 - Trust Agreement of Gulf Power Capital Trust I. (Designated in Form
S-3 File Nos. 333-19271, 333-19271-01 and 333-19271-02, as Exhibit
4.4-A.)
A-2 - Trust Agreement of Gulf Power Capital Trust II. (Designated in Form
S-3 File Nos. 333-19271, 333-19271-01 and 333-19271-02, as Exhibit
4.4-B.)
A-3 - Forms of Amended and Restated Trust Agreements for Gulf Power
Capital Trust I. (Designated in Form S-3 File Nos. 333-19271,
333-19271-01 and 333-19271-02, as Exhibits 4.5-A and 4.5-C.)
A-4 - Forms of Amended and Restated Trust Agreements for Gulf Power
Capital Trust II. (Designated in Form S-3 File Nos. 333-19271,
333-19271-01 and 333-19271-02, as Exhibits 4.5-B and 4.5-D.)
B-1 - Form of Subordinated Note Indenture between Gulf Power Company and
The Chase Manhattan Bank, as Trustee. (Designated in Form S-3 File
Nos. 333-19271, 333-19271-01 and 333-19271-02, as Exhibit 4.1.)
B-2 - Forms of Supplemental Indenture to Subordinated Note Indenture
between Gulf Power Company and The Chase Manhattan Bank, as Trustee.
(Designated in Form S-3 File Nos. 333-19271, 333-19271-01 and
333-19271-02, as Exhibit 4.2-A and 4.2-B.)
B-3 - Forms of Guarantee with respect to Preferred Securities of Gulf
Power Capital Trust I and Gulf Power Capital Trust II. (Designated in
Form S-3 File Nos. 333-19271, 333-19271-01 and 333-19271-02, as
Exhibits 4.8-A, 4.8-B, 4.8-C and 4.8-D.)
C-1 - Registration Statement under the Securities Act of 1933. (Filed
electronically January 3, 1997, File Nos. 333-19271, 333-19271-01 and
333-19271-02.)
B. Financial Statements.
Balance sheet of Gulf at September 30, 1996. (Designated in
Gulf's Form 10-Q for the quarter ended September 30, 1996, File
No. 0-2429.)
Statements of Income of Gulf for the periods ended September 30,
1996. (Designated in Gulf's Form 10-Q for the quarter ended
September 30, 1996, File No. 0-2429.)
<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 27, 1997 ALABAMA POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston, Assistant Secretary
GEORGIA POWER COMPANY
By: /s/ Wayne Boston
Wayne Boston, Assistant Secretary
[Signatures continued on next page]
<PAGE>
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
