Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-67453
333-67453-01
333-67453-02
333-67453-03
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 4, 1998)
$250,000,000
(ALABAMA POWER LOGO)
SERIES M 7.85% SENIOR NOTES
DUE MAY 15, 2003
---------------------------
This is a public offering by Alabama Power Company of $250,000,000 of
Series M 7.85% Senior Notes due May 15, 2003. Interest is payable May 15 and
November 15 of each year, beginning November 15, 2000.
The Series M Senior Notes are not redeemable prior to maturity.
The Series M Senior Notes should be delivered on or about May 18, 2000
through the book-entry facilities of The Depository Trust Company.
<TABLE>
<CAPTION>
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Per Series M
Senior Note Total
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<S> <C> <C>
Public Offering Price.......................... 99.870% 249,675,000
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Underwriting Discount.......................... 0.209% 522,500
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Proceeds to Alabama Power Company.............. 99.661% 249,152,500
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</TABLE>
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Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
---------------------------
LEHMAN BROTHERS
May 11, 2000
<PAGE>
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this Prospectus Supplement and the
attached Prospectus. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it.
We are offering to sell the Series M Senior Notes only in places where sales are
permitted.
You should not assume that the information contained or incorporated by
reference in this Prospectus Supplement or the attached Prospectus, including
information incorporated by reference, is accurate as of any date other than its
respective date.
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TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUPPLEMENT
The Company S-3
Capitalization S-3
Use of Proceeds S-3
Recent Results of Operations S-4
Description of the Series M Senior
Notes S-4
Experts S-6
Underwriting S-7
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PAGE
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PROSPECTUS
About this Prospectus 2
Available Information 2
Incorporation of Certain Documents by
Reference 2
Selected Information 4
Alabama Power Company 4
The Trusts 5
Accounting Treatment of Trusts 5
Certain Ratios 6
Use of Proceeds 6
Description of the New Bonds 6
Description of the New Stock 9
Description of the Senior Notes 11
Description of the Junior Subordinated
Notes 15
Description of the Preferred
Securities 20
Description of the Guarantees 21
Relationship Among the Preferred
Securities, the Junior Subordinated
Notes and the Guarantees 23
Plan of Distribution 24
Legal Matters 25
Experts 25
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S-2
<PAGE>
THE COMPANY
Alabama Power Company (the "Company") is a corporation organized under the
laws of the State of Alabama on November 10, 1927, by the consolidation of a
predecessor Alabama Power Company, Gulf Electric Company and Houston Power
Company. The Company has its principal office at 600 North 18th Street,
Birmingham, Alabama 35291, telephone (205) 257-1000. The Company is a wholly
owned subsidiary of The Southern Company.
The Company is a regulated public utility engaged in the generation,
transmission, distribution and sale of electric energy within an approximately
44,500 square mile service area comprising most of the State of Alabama.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1999, and as adjusted to reflect the transactions described in note
(1) below. The following data is qualified in its entirety by reference to and,
therefore, should be read together with the detailed information and financial
statements appearing in the documents incorporated herein by reference. See also
"Selected Information" in the accompanying Prospectus.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
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ACTUAL AS ADJUSTED(1)
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(THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity........................................ $2,988,863 $2,988,863 42.1%
Cumulative Preferred Stock................................. 317,512 317,512 4.5
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company Junior
Subordinated Notes....................................... 347,000 347,000 4.9
Senior Notes............................................... 2,198,822 2,448,822 34.5
Other Long-Term Debt....................................... 991,556 991,556 14.0
---------- ---------- -----
Total, excluding amounts due within one year............... $6,843,753 $7,093,753 100.0%
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</TABLE>
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(1) Reflects the issuance of the Series M Senior Notes.
USE OF PROCEEDS
The proceeds from the sale of the Series M Senior Notes will be applied by
the Company to repay a portion of its outstanding short-term indebtedness, which
aggregated approximately $324,309,000 as of May 11, 2000. The outstanding
short-term indebtedness of the Company was incurred for working capital purposes
and currently consists of bank loans and commercial paper evidenced by notes
having maturities from 7 to 62 days and bearing interest at rates from 6.03% to
6.15%.
S-3
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RECENT RESULTS OF OPERATIONS
For the twelve months ended March 31, 2000, "Operating Revenues," "Earnings
Before Interest and Income Taxes" and "Net Income After Dividends on Preferred
Stock" were $3,417,327,000, $938,385,000 and $404,317,000, respectively. In the
opinion of the management of the Company, the above amounts for the twelve
months ended March 31, 2000 reflect all adjustments necessary to present fairly
the results of operations for such period. The "Ratio of Earnings to Fixed
Charges" for the twelve months ended March 31, 2000 was 3.30. The "Ratio of
Earnings to Fixed Charges" for the year ended December 31, 1999 was 3.33.
DESCRIPTION OF THE SERIES M SENIOR NOTES
Set forth below is a description of the specific terms of the Series M
7.85% Senior Notes due May 15, 2003 (the "Series M Senior Notes"). This
description supplements, and should be read together with, the description of
the general terms and provisions of the Senior Notes set forth in the
accompanying Prospectus under the caption "Description of the Senior Notes." The
following description does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the description in the accompanying
Prospectus and the Senior Note Indenture (the "Senior Note Indenture") dated as
of December 1, 1997, as supplemented, between the Company and The Chase
Manhattan Bank, as trustee (the "Senior Note Indenture Trustee").
GENERAL
The Series M Senior Notes will be issued as a series of Senior Notes under
the Senior Note Indenture. The Series M Senior Notes will be limited in
aggregate principal amount to $250,000,000.
The entire principal amount of the Series M Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on May 15, 2003. The Series M Senior Notes are not subject to any sinking fund
provision. The Series M Senior Notes are available for purchase in denominations
of $1,000 and any integral multiple thereof.
INTEREST
Each Series M Senior Note shall bear interest at the rate of 7.85% per
annum (the "Securities Rate") from the date of original issuance, payable
semiannually in arrears on May 15 and November 15 of each year (each, an
"Interest Payment Date") to the person in whose name such Series M Senior Note
is registered at the close of business on the fifteenth calendar day prior to
such payment date. The initial Interest Payment Date is November 15, 2000. The
amount of interest payable will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable on
the Series M Senior Notes is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
with the same force and effect as if made on such date.
RANKING
The Series M Senior Notes will be direct, unsecured and unsubordinated
obligations of the Company and will rank equally with all other unsecured and
unsubordinated obligations of the Company. The Series M Senior Notes will be
effectively subordinated to all secured debt of the Company, including its first
mortgage bonds, aggregating approximately $954,000,000 outstanding at December
31, 1999. The Senior Note Indenture contains no restrictions on the amount of
additional indebtedness that may be incurred by the Company.
S-4
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REDEMPTION
The Series M Senior Notes will not be redeemable by the Company prior to
maturity.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series M Senior Notes. The Series M Senior Notes will be
issued only as fully registered securities registered in the name of Cede & Co.,
DTC's nominee. One or more fully registered global Series M Senior Notes
certificates will be issued, representing in the aggregate the total principal
amount of Series M Senior Notes, 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, as amended (the "1934 Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Series M Senior Notes within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series M Senior
Notes on DTC's records. The ownership interest of each actual purchaser of
Series M Senior Notes ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Series M Senior
Notes. Transfers of ownership interests in the Series M Senior Notes 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 Series M Senior Notes, except in the event that use
of the book-entry system for the Series M Senior Notes is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series M Senior
Notes. DTC's records reflect only the identity of the Direct Participants to
whose accounts such Series M Senior Notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Although voting with respect to the Series M Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series M Senior Notes. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Company as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Series M Senior
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
S-5
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Payments on the Series M Senior Notes will be made to DTC. DTC's practice
is to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment 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 account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
Except as provided herein, a Beneficial Owner of a global Series M Senior
Note will not be entitled to receive physical delivery of Series M Senior Notes.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Series M Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series M Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series M Senior Notes at any time by giving reasonable notice to
the Company. Under such circumstances, in the event that a successor securities
depositary is not obtained, Series M Senior Notes certificates will be printed
and delivered to the holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary) with respect to the Series M Senior Notes. In that event,
certificates for the Series M Senior Notes will be printed and delivered to the
holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. The Company has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999,
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
Statements as to matters of law and legal conclusions in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, relating to
titles to property of the Company under "Item 2 -- Properties -- Titles to
Property", and relating to the Company under "Item 1 -- Business -- Regulation",
"Item 1 -- Business -- Rate Matters" and "Item 1 -- Business -- Competition",
have been reviewed by Balch & Bingham LLP, general counsel for the Company, and
such statements are made upon the authority of such firm as experts.
S-6
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UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to Lehman Brothers Inc. (the "Underwriter") and the
Underwriter has agreed to purchase from the Company the entire principal amount
of Series M Senior Notes.
In the Underwriting Agreement, the Underwriter has agreed, subject to the
terms and conditions set forth therein, to purchase all of the Series M Senior
Notes offered hereby if any of the Series M Senior Notes are purchased.
The Underwriter proposes to offer the Series M Senior Notes 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 in excess of $1.34 per Series M
Senior Note. The Underwriter may allow, and such dealers may reallow, a
concession not in excess of $1.00 per Series M Senior Note to certain brokers
and dealers. After the Series M Senior Notes are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Underwriter.
Prior to this offering, there has been no public market for the Series M
Senior Notes. The Underwriter has advised the Company that it intends to make a
market in the Series M Senior Notes. The Underwriter will have no obligation to
make a market in the Series M Senior Notes, however, and may cease market making
activities, if commenced, at any time.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company's expenses associated with the offer and sale of the Series M
Senior Notes are estimated to be $350,000.
In order to facilitate the offering of the Series M Senior Notes, the
Underwriter may engage in transactions that stabilize, maintain or otherwise
affect the price of the Series M Senior Notes. Specifically, the Underwriter may
over-allot in connection with the offering, creating a short position in the
Series M Notes for its own account. In addition, to cover over-allotments or to
stabilize the price of the Series M Senior Notes, the Underwriter may bid for,
and purchase, Series M Senior Notes in the open market. The Underwriter may
reclaim selling concessions allowed to a dealer for distributing Series M Senior
Notes in the offering, if the Underwriter repurchases previously distributed
Series M Senior Notes in transactions to cover short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market price of the Series M Senior Notes above independent market levels. The
Underwriter is not required to engage in these activities, and may end any of
these activities at any time.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor the Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Series M Senior Notes. In addition,
neither the Company nor the Underwriter makes any representation that the
Underwriter will engage in such transactions or that such transactions once
commenced will not be discontinued without notice.
The Underwriter engages in transactions with, and, from time to time, has
performed services for, the Company and its affiliates in the ordinary course of
business.
S-7
<PAGE>
$250,000,000
(ALABAMA POWER LOGO)
SERIES M 7.85% SENIOR NOTES
DUE MAY 15, 2003
---------------------------
PROSPECTUS SUPPLEMENT
May 11, 2000
---------------------------
LEHMAN BROTHERS
