File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form U-1
__________________________________
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
__________________________________
Gulf States Utilities Company
350 Pine Street
Beaumont, TX 77701
(Name of company filing this statement and address
of principal executive offices)
__________________________________
Entergy Corporation
(Name of top registered holding company parent of each
applicant or declarant)
__________________________________
Frank Gallaher Glenn E. Harder
President Vice President-Financial
Gulf States Utilities Company Strategies and Treasurer
350 Pine Street Entergy Services, Inc.
Beaumont, TX 77701 P.O. Box 61000
New Orleans, LA 70161
(Names and addresses of agents for service)
__________________________________
The Commission is also requested to send copies of any
communications in connection with this matter to:
Laurence M. Hamric, Esq. Benny Hughes, Esq.
Entergy Services, Inc. Orgain, Bell & Tucker, L. L. P.
225 Baronne Street 470 Orleans Street
New Orleans, LA 70113 Beaumont, TX 77701
Bonnie Wilkinson, Esq. David P. Falck, Esq.
Reid & Priest Winthrop, Stimson, Putnam & Roberts
40 West 57th Street One Battery Park Plaza
New York, NY 10019 New York, NY 10004
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Item 1. Description of Proposed Transactions
Section A. Overview
Gulf States Utilities Company ("Company"), a
subsidiary of Entergy Corporation ("Entergy"), a
registered holding company under the Public Utility
Holding Company Act of 1935 ("Holding Company Act"),
proposes, at one time or from time to time through
December 31, 1995, (1) to issue and sell not more than
$700,000,000 aggregate principal amount of par or
stated value of one or more series of its First
Mortgage Bonds("Bonds") and/or one or more new sub-
series of the Medium Term Note Series of its First
Mortgage Bonds, as described below ("MTNs"), and/or one
or more new series of its Preferred Stock, Cumulative,
$100 Par Value and/or Preferred Stock, Cumulative,
without par value ("Preferred"), (2) to enter into
arrangements for the issuance and sale of not to exceed
$250,000,000 principal amount of tax-exempt bonds ("Tax-
Exempt Bonds") in one or more series for the financing
of certain facilities, including but not limited to
sewage and/or solid waste disposal facilities that have
not heretofore been the subject of such financing or
for the refinancing of outstanding tax-exempt bonds
issued for that purpose, (the financings contemplated
above, collectively "New Financing Plan"), and (3) to
acquire, from time to time by tender offer, open market
or negotiated purchases or otherwise, all or a portion
of one or more series of (a) the Company's outstanding
First Mortgage Bonds, Debentures, Preference Stock
and/or Preferred Stock, and/or (b) outstanding tax-
exempt bonds previously issued for the benefit of the
Company (collectively, "New Acquisition Program").
Each of these proposed transactions is discussed in
greater detail below.
Section B. Issuance and Sale of the Bonds, MTNs and
Preferred
1. The Bonds are to be issued under the Company's
Indenture of Mortgage, dated as of September 1, 1926,
to Chase National Bank of the City of New York, as
Trustee, to which Chemical Bank is successor Trustee ,
(the "Trustee"), as heretofore supplemented
("Mortgage"), and as proposed to be further
supplemented by additional Supplemental Indenture(s),
each relating to one or more series of Bonds. The
Bonds and MTNs would be issued on the basis of unfunded
net property additions and/or previously retired First
Mortgage Bonds.
2. The terms of the Fifty-seventh Supplemental Indenture
to the Mortgage provide for a series of First Mortgage
Bonds to be known as and entitled "First Mortgage
Bonds, Medium Term Note Series" (the "Medium Term Note
Series"). The MTNs will be issued as sub-series of the
Medium Term Note Series. The First Mortgage Bonds of
the Medium Term Note Series are equally secured with
other First Mortgage Bonds issued under the Mortgage,
except so far as any sinking fund and/or improvement
fund, maintenance and replacement fund or other fund
established in accordance with the provisions of the
Mortgage may afford additional security for the bonds
of any additional series or, if applicable, sub-series
of the Medium Term Note Series. The Company believes
that issuance of MTNs could be advantageous because:
(a) interest rates should be lower on MTNs than on
Bonds because the MTNs can be offered on a continual
basis, insuring that supply does not exceed investor
demand at any given time; (b) MTNs provide flexibility
in structuring the size and maturity of each issuance
to match the Company's cash needs; and (c) the ability
to price and issue MTNs quickly will permit the Company
to take advantage of market opportunities as they
arise.
3. Each series of Bonds or sub-series of MTNs will be sold
at such price, will bear interest at such rate or rates
and will mature on such date as will be determined at
the time of sale or when the agreement to sell is made,
as the case may be. No series of Bonds would be sold
at competitive bidding if the interest rate thereon
would exceed 15%. No sub-series of MTNs will be issued
at rates in excess of those generally obtained at the
time of pricing for sales of medium-term notes having
the same maturity, issued by companies of comparable
credit quality and having similar terms, conditions and
features. The price, exclusive of accrued interest, to
be paid to the Company for each series of Bonds to be
sold at competitive bidding will be within a range (to
be specified by the Company to prospective purchasers)
of not more than five percentage points, but shall not
exceed five percentage points above or below 100% of
the principal amount of such series of Bonds. The
price of each sub-series of MTNs will be within a range
of 95%-105% of principal amount. Each series of Bonds
or sub-series of MTNs will mature not later than forty
years from the first day of the month of issuance.
4. One or more series of Bonds or sub-series of MTNs may
include terms that deviate from the Securities and
Exchange Commission's ("Commission") Statement of
Policy Regarding First Mortgage Bonds (Holding Company
Act Release No. 13105, February 16, 1956, as modified
by Holding Company Act Release No. 16369, May 8, 1969)
in the following respects:
(a) Redemption provisions: One or more series of
Bonds or sub-series of MTNs may include provisions
for redemption prior to maturity at various
percentages of the principal amount and may
include various restrictions on optional
redemption for a given number of years or for the
life of the Bond or MTN. In addition, one or more
series of Bonds or sub-series of MTNs may include
provisions for the retirement of all or varying
percentages of such series prior to maturity. The
MTNs may also be subject to redemption at the
option of the holders thereof on specified dates
at a price equal to the principal amount thereof
together with accrued interest to the date fixed
for redemption.
(b) Sinking fund provisions: The MTNs will not be
subject to any sinking fund. Further, one or more
series of Bonds may not have sinking fund
provisions.
(c) Dividend covenant: In connection with the
issuance of each new series of Bonds, the Company
will reaffirm in the related supplemental
indenture to the Mortgage the dividend covenant
contained in the Mortgage. This existing covenant
differs from the Statement of Policy requirement
in that it prohibits dividends or other
distributions on common stock if the amount of
such dividends and distributions after December
31, 1945 would exceed aggregate net income
available for dividends accumulated after such
date to and including a date close to the date of
payment, plus $378,000.
(d) Maintenance and replacement fund provisions:
The Company has provided in connection with
previous issuances of First Mortgage Bonds that
its obligations with respect to the maintenance
and replacement fund under the Mortgage shall
terminate on June 2, 2010 or such earlier date as
requisite consents to eliminate these obligations
have been obtained from the holders of outstanding
bonds, and has obtained such consents with respect
to recently issued series. The Company intends to
include similar provisions with respect to each
new series of Bonds and sub-series of MTNs.
To the extent that the foregoing deviates from the
Statement of Policy Regarding First Mortgage Bonds,
cited above, the Company hereby requests authorization
by the Commission of any such deviation.
5. Reference is made to Exhibits A-1, A-2, A-4, A-5 and B-
1 hereto for further information with respect to the
terms of each series of Bonds and sub-series of MTNs.
6. The Company expects that each series of the Preferred
will consist of shares of the Company's Preferred
Stock, Cumulative, $100 Par Value ("$100 Preferred"),
or Preferred Stock, Cumulative, without par value ("No
Par Preferred") (collectively "Preferred Stock"), as
currently authorized by the Company's Restated Articles
of Incorporation, as amended ("Articles"). In
accordance with the Articles, the Company had
authorized and unissued at December 31, 1993, 3,625,523
shares of its $100 Preferred and 10,000,000 shares of
its No Par Preferred.
7. The price, exclusive of accumulated dividends, to be
paid to the Company for each series of Preferred will
be determined at the time of sale and will not be less
than par or stated value on a per share basis. With
respect to any series of Preferred to be sold at
competitive bidding, the price to be paid to the
Company will not be less than the par value or stated
value nor more than 102.75% thereof per share plus
accumulated dividends, if any. No series of Preferred
would be sold if the dividend rate thereon would exceed
15% of the par or stated value.
8. The terms of one or more series of Preferred may
include provisions for redemption at various redemption
prices and may include various restrictions on optional
redemption for a given number of years. The Company
may include provisions for a sinking fund for any
series of Preferred designed to redeem annually (or to
make purchases in lieu of redemption), commencing a
specified number of years after the first day of the
calendar month in which such series is issued, at the
par or stated value per share of such series, plus
accumulated dividends, a number of shares equal to a
given percentage of the total number of shares of such
series, with the Company possibly having a non-
cumulative option to redeem (or to make purchases in
lieu of redemption) annually an additional number of
shares up to a given percentage of the total number of
shares of such series. Any such sinking fund
provisions would be designed to redeem all outstanding
shares of such series not later than 30 years after the
date of original issuance thereof. To the extent that
the foregoing deviates from the Commission's Statement
of Policy Regarding Preferred Stock Subject to the
Public Utility Holding Company Act of 1935 (Holding
Company Act Release No. 13106, February 16, 1956, as
modified by Holding Company Act Release No. 16758, June
22, 1970) as it relates to redemption provisions, the
Company hereby requests authorization by the Commission
of any such deviation.
9. Depending upon market conditions at the time of the
offering of a given series of the Preferred, if the
Company determines that preferred stock having a public
offering price of less than $100 per share is likely to
have a materially better market reception than shares
of $100 Preferred, and it is not deemed appropriate to
use No Par Preferred, the Company may issue and sell
such series of $100 Preferred to underwriters for
deposit with a bank or trust company ("Depositary").
The underwriters would then receive from the Depositary
and deliver to the repurchasers in the subsequent
public offering shares of depositary preferred stock
("Depositary Preferred"), each representing a stated
fraction of a share of the new series of $100
Preferred. Depositary Preferred would be evidenced by
depositary receipts. Each owner of Depositary Preferred
would be entitled proportionally to all the rights and
preferences of the series of $100 Preferred (including
dividends, redemption and voting). A holder of
Depositary Preferred will be entitled to surrender
Depositary Preferred to the Depositary and receive the
number of whole shares of $100 Preferred represented
thereby. A holder of $100 Preferred will be entitled
to surrender shares of $100 Preferred to the Depositary
and receive a proportional amount of Depositary
Preferred.
10. For further information as to the terms of the
Preferred, including possible depositary arrangements,
reference is made to Exhibits A-6 through A-18.
11. The Company became a subsidiary of Entergy on December
31, 1993. Prior to that time, the Company was not
subject to Commission jurisdiction under the Holding
Company Act with respect to issuance of securities. As
noted above, the Bonds, MTNs and Preferred will be
issued under the provisions of the Mortgage and
Articles, respectively, the terms of which have not
been previously approved by the Commission and which
may vary in certain respects from the applicable
provisions of the Commission's Statements of Policy
Regarding First Mortgage Bonds and Preferred Stock
(cited above). (Reference is made to Exhibits N-1 and
N-2 in File No. 70-8059 for information with respect to
certain of these variations.) To the extent that the
terms of the Bonds, MTNs and Preferred contained in the
Mortgage and Articles, respectively, as of December 31,
1993, deviate from the Commission's said Statements of
Policy, the Company hereby requests authorization by
the Commission of any such deviation. The Company does
not believe that these deviations are material.
12. The issuance and sale of certain series of Bonds and/or
Preferred may be pursuant to the competitive bidding
requirements of Rule 50, as modified by Holding Company
Act Release Nos. 22623 (September 2, 1982) and 23122
(November 17, 1983).* However, the Company believes
that, due to the complexity of the Company's pending
regulatory matters and litigation surrounding its River
Bend nuclear unit, the recent acquisition of the
Company by Entergy, the possible offering of any series
of the Preferred in conjunction with Depositary
_______________________________
* The Company presently is eligible to use Rule 415 under the
Securities Act of 1933 (relating to delayed or continuous
offerings of securities) with respect to both Bonds and
Preferred. However, in the event that the Company is not
eligible to use Rule 415 in the future, the Company believes that
use of the alternative bidding procedures approved in the above
releases would still be appropriate for, and the Company would
use such procedures in connection with, the offering of any
series of Bonds and/or Preferred to be sold at competitive
bidding.
<PAGE>
Preferred and the possible need to structure the terms
of a series to meet the demands of the retail market, a
public offering of one or more series of Bonds and/or
Preferred may require an advance marketing effort on
the part of underwriters. Any such advance marketing
effort would not be possible under competitive bidding
requirements. Even with an advance marketing effort, a
public offering of a particular series of Bonds and/or
Preferred may not be as advantageous as a private
placement, and, with respect to the Preferred, the
aggregate dollar amount of a series thereof may be too
small to economically justify the greater issuance
costs of a public offering compared to a private
placement. Consequently, the interests of the Company,
its investors and consumers require that the Company
have the flexibility to sell each series of Bonds
and/or Preferred by means of a negotiated public
offering or private placement with institutional
investors in order to secure the advantages of an
advance marketing effort and/or the best available
terms.
13. With respect to the means of selling MTNs, such
securities are sold primarily on the basis of their
credit ratings, and are, in a sense, interchangeable
among issuers. As a result, they are usually sold with
interest rates negotiated at the time of the sale on
the basis of spreads over comparable maturity Treasury
securities. An MTN program provides for competition in
the marketplace because there will likely be many
institutional bidders competing for these securities
within a certain range of maturities and bearing
certain ratings. However, the bids may be submitted
through or by an agent rather than directly to the
Company and therefore would not under such a program
technically comply with the requirements of Rule 50.
Under such a program, the Company would sell the MTNs
either through agents that engage in the placement of
securities, with commissions paid to such agents based
on the principal amount of the MTNs, or to such agents
as principals for resale to investors at a discount
equal to such commission. The Commission will have
reviewed and approved the reasonableness of the range
of any agent's compensation for distribution of MTNs,
and detailed information regarding the completed
transactions under the program will be filed pursuant
to Rule 24. Further, MTNs are designed to be issuable
quickly to take advantage of market conditions and may
be placed directly with primarily institutional
investors. In view of these factors, the Company
believes that it is in the interests of the Company,
its investors and consumers that it have the
flexibility to issue the MTNs by means of negotiated
arrangements with agents or direct purchasers.
14. For the foregoing reasons, the Company hereby requests
that, pursuant to paragraph (a)(5) of Rule 50 under the
Holding Company Act, the Commission's notice of
proposed transactions issued pursuant to Rule 23(e)
under the Holding Company Act grant the Company an
exception from the competitive bidding requirements of
Rule 50, authorizing the Company to undertake
negotiations with respect to the arrangements for sale
MTNs and, if the Company determines that a negotiated
public offering or private placement would be
preferable under the circumstances, with respect to the
issuance and sale of Bonds and/or Preferred. The
Company understands that any such authorization to
negotiate would not authorize it to issue and sell the
proposed securities, but rather that such authorization
would contemplate Commission review of the negotiated
terms and conditions prior to issuance of a final
order, which would contain the authority to issue and
sell the particular securities pursuant to an exception
from the Commission's competitive bidding rules.
15. Reference is made to Exhibits B-1, B-2, B-3, B-4, B-5,
B-6 and B-7 for information with respect to, among
other things, the procedures to be followed in
connection with the issuance and sale of Bonds, MTNs
and/or Preferred. The sale(s) of Bonds and the sale(s)
of MTNs and the sale(s) of Preferred are separate
transactions not contingent upon one another.
16. The Company proposes to use the net proceeds derived
from the issuance and sale of Bonds, MTNs and/or
Preferred for general corporate purposes, including,
but not limited to, the repayment of outstanding
securities when due and/or the possible redemption,
acquisition, or refunding of certain outstanding
securities prior to their stated maturity or due date.
The Company's request for authorization for such sales
is in part to provide the flexibility to permit a quick
response to changing market conditions if it becomes
beneficial for the Company to refinance, refund, or
otherwise acquire outstanding high cost securities.
(See "Acquisition Program" below.)
17. The Mortgage and Articles include earnings coverage
tests for the issuance of additional First Mortgage
Bonds and Preferred Stock, respectively. Reference is
made to Exhibits I-1 and I-2 hereto for information on
the amounts issuable based on such tests. The Company
will not issue any Bonds, MTNs or Preferred unless the
relevant earnings coverage test, if applicable to the
proposed issuance, is satisfied.
Section C. Issuance and Sale of Tax-Exempt Bonds and
Related Transactions
1. The Company also may seek to enter into arrangements
for the issuance of Tax-Exempt Bonds, and the Company
proposes from time to time through December 31, 1995 to
enter into one or more Equipment Leases and Subleases
and/or possibly one or more supplements and/or
amendments thereto (collectively, the "Equipment
Lease") with one or more issuing governmental
authorities (each an "Issuer") which will contemplate
the issuance and sale by the Issuer(s) of one or more
series of Tax-Exempt Bonds in an aggregate principal
amount not to exceed $250,000,000 pursuant to one or
more trust indentures and/or possibly one or more
supplements thereto (collectively, the "Indenture")
between the Issuer(s) and one or more trustees
(collectively, the "Trustee").
2. The proceeds of the sale of Tax-Exempt Bonds, net of
any underwriters' discounts or other expenses payable
from proceeds, will be applied to finance certain
facilities including but not limited to sewage and/or
solid waste disposal or pollution control facilities
("Facilities") that have not heretofore been the
subject of such financing, or to refinance outstanding
tax-exempt bonds issued for that purpose. Pursuant to
the terms of each Equipment Lease, the Company will
agree to purchase, acquire, construct and install the
Facilities and lease such Facilities to the Issuer.
The Issuer will agree to pay to the Company as rental
for the use of the Facilities an amount equal to the
lesser of the (a) the total amount of the proceeds from
the sale of the Tax-Exempt Bonds or (b) the total cost
of construction of the Facilities. Pursuant to the
provisions of the Equipment Lease, the Issuer will
sublease the Facilities to the Company at subrentals
sufficient to pay the principal or redemption price of,
premium, if any, interest and other amounts owing on
the Tax-Exempt Bonds together with related expenses.
Such subrentals will be paid by the Company directly to
the Trustee pursuant to the Indenture. Under the
Equipment Lease, the Company may also be obligated to
pay (i) the fees and charges of the Trustee and any
registrar or paying agent under the Indenture, and, if
any, the Remarketing Agent and the Tender Agent
hereinafter referred to, (ii) all expenses incurred by
the Issuer in connection with its rights and
obligations under the Equipment Lease, (iii) all
expenses necessarily incurred by the Issuer or the
Trustee under the Indenture in connection with the
transfer or exchange of Tax-Exempt Bonds, and (iv)
certain other fees and expenses.
3. The Indenture may provide that, upon the occurrence of
certain events relating to the operation of the
Facilities financed, Tax-Exempt Bonds will be
redeemable by the Issuer at the direction of the
Company. Any series of Tax-Exempt Bonds may be made
subject to a mandatory cash sinking fund under which
stated portions of Tax-Exempt Bonds of such series are
to be retired at stated times. Tax-Exempt Bonds may be
subject to mandatory redemption in certain other cases.
The payments by the Company in such circumstances shall
be sufficient (together with any other moneys held by
the Trustee under the Indenture and available therefor)
to pay the principal of all Tax-Exempt Bonds to be
redeemed or retired, the premium, if any, together with
interest accrued or to accrue to the redemption date on
such bonds.
4. It is proposed that each series of the Tax-Exempt Bonds
mature not earlier than five years from the first day
of the month of issuance nor later than forty years
from the date of issuance. Tax-Exempt Bonds will be
subject to optional redemption by the Issuer, at the
direction of the Company, in whole or in part at the
redemption prices (expressed as percentages of the
principal amount thereof) plus accrued interest to the
redemption date, and at the times, set forth in the
Indenture.
5. The Equipment Lease and the Indenture may provide for a
fixed interest rate for one or more series of Tax-
Exempt Bonds and/or for an adjustable interest rate for
one or more series of Tax-Exempt Bonds as hereinafter
described. No series of Tax-Exempt Bonds would be sold
if the fixed interest rate or initial adjustable
interest rate thereon would exceed 13%. As to series
having an adjustable interest rate, the interest rate
for Tax-Exempt Bonds of such series during the first
Rate Period (hereinafter referred to) would be
determined in discussions between the Company and the
purchasers of such series from the Issuer and be based
on the current tax-exempt market rate for comparable
bonds having a maturity comparable to the length of the
initial Rate Period. Thereafter, for each Rate Period,
the interest rate on such Tax-Exempt Bonds would be
that rate which would when set be sufficient to
remarket the Tax-Exempt Bonds of such series at their
principal amount. Such subsequent interest rates would
not exceed a specified maximum rate that will not be
greater than 13%. Such interest rates would be
determined based upon the market rates for bonds of
comparable maturity and quality. Paragraphs 6 - 9
below relate to Tax-Exempt Bonds having an adjustable
interest rate while such rate is adjustable.
6. The term "Rate Period", as used herein, means a period
during which the interest rate on such Tax-Exempt Bonds
of a particular series while bearing an adjustable rate
(or method of determination of such interest rate) is
fixed. The initial Rate Period would commence on the
date as of which interest begins to accrue on such Tax-
Exempt Bonds of such series. The length of each Rate
Period would be no less than one day nor more than five
years.
7. The Equipment Lease and the Indenture would provide
that holders of Tax-Exempt Bonds would have the right
to tender or be required to tender their Tax-Exempt
Bonds and have them purchased at a price equal to the
principal amount thereof, plus any accrued and unpaid
interest thereon, on dates specified in, or established
in accordance with, the Indenture. A Tender Agent may
be appointed to facilitate the tender of any Tax-Exempt
Bonds by holders. Any holders of Tax-Exempt Bonds
wishing to have such Tax-Exempt Bonds purchased may be
required to deliver such Tax-Exempt Bonds during a
specified period of time preceding such purchase date
to the Tender Agent, if one shall be appointed, or to
the Remarketing Agent appointed to reoffer such
tendered Tax-Exempt Bonds for sale.
8. Under the Equipment Lease, the Company would be
obligated to pay amounts equal to the amounts to be
paid by the Remarketing Agent or the Tender Agent
pursuant to the Indenture for the purchase of Tax-
Exempt Bonds so tendered, such amounts to be paid by
the Company on the dates such payments by the
Remarketing Agent or the Tender Agent are to be made;
provided, however, that the obligation of the Company
to make any such payment under the Equipment Lease
would be reduced by the amount of any other moneys
available therefor, including the proceeds of the sale
of such tendered Tax-Exempt Bonds by the Remarketing
Agent.
9. Upon the delivery of such Tax-Exempt Bonds by holders
to the Remarketing Agent or the Tender Agent for
purchase, the Remarketing Agent would use its best
efforts to sell such Tax-Exempt Bonds at a price equal
to the principal amount of such Tax-Exempt Bonds.
10. In order to obtain a more favorable rating on any
series of Tax-Exempt Bonds and, thereby, improve the
marketability thereof, the Company may arrange for one
or more irrevocable letter(s) of credit for an
aggregate amount up to $300,000,000 from a bank (the
"Bank") in favor of the Trustee. In such event,
payments with respect to principal, premium, if any,
interest and purchase obligations in connection with
such series of Tax-Exempt Bonds, coming due during the
term of such letter of credit, such term not to exceed
10 years, would be secured by, and payable from funds
drawn under, the letter of credit. In order to induce
the Bank to issue such letter of credit, the Company
would enter into a Letter of Credit and Reimbursement
Agreement ("Reimbursement Agreement") with the Bank
pursuant to which the Company would agree to reimburse
the Bank for all amounts drawn under such letter of
credit within a specified period after the date of the
draw and with interest thereon. The terms of the
Reimbursement Agreement would correspond to the terms
in the letter of credit.
11. It is anticipated that the Reimbursement Agreement
would require the payment by the Company to the Bank of
up-front letter of credit fees not to exceed $100,000
and annual fees not to exceed 1-1/4% of the face amount
of the letter of credit per annum. Any such letter of
credit may expire or be terminated prior to the
maturity date of the series of Tax-Exempt Bonds which
such letter of credit supports and, in connection with
such expiration or termination, such series of Tax-
Exempt Bonds may be made subject to mandatory
redemption or purchase on or prior to the date of
expiration or termination of such letter of credit,
subject to the right of owners of Tax-Exempt Bonds of
such series not to have their Tax-Exempt Bonds redeemed
or purchased. Provision may be made, as to any such
series of Tax-Exempt Bonds, for extension of the term
of such letter of credit or for the replacement
thereof, upon its expiration or termination, by another
letter of credit from the Bank or a different bank.
12. In addition or as an alternative to the security
provided by a letter of credit, in order to obtain a
more favorable rating on Tax-Exempt Bonds and
consequently improve the marketability thereof, the
Company may (a) determine to provide an insurance
policy for the payment of the principal of and/or
interest and/or premium on one or more series of Tax-
Exempt Bonds, and/or (b) provide security for holders
of Tax-Exempt Bonds and/or the Bank by obtaining the
authentication of and pledging one or more new series
of First Mortgage Bonds and/or MTNs("Collateral Bonds")
under the Mortgage, as it may be supplemented.
Collateral Bonds would be issued on the basis of
unfunded net property additions and/or retired bond
credits and would be delivered to the Trustee under the
Indenture and/or the Bank to evidence, in part, and
secure the Company's obligation to pay the subrentals
for the Facilities financed and/or the Company's
obligation to reimburse the Bank under the
Reimbursement Agreement. These Collateral Bonds could
be issued in several ways. First, if Tax-Exempt Bonds
bear a fixed interest rate, Collateral Bonds could be
issued in a principal amount equal to the principal
amount of such Tax-Exempt Bonds and bear interest at a
rate equal to the rate of interest on such Tax-Exempt
Bonds. Secondly, they could be issued in a principal
amount equivalent to the principal amount of such Tax-
Exempt Bonds plus an amount equal to interest on those
Bonds for a specified period. In such case, Collateral
Bonds would bear no interest. Thirdly, Collateral
Bonds could be issued in a principal amount equivalent
to the principal amount of such Tax-Exempt Bonds plus
an amount equal to interest on those Bonds for a
specified period, but carry a fixed interest rate that
would be lower than the fixed interest rate of the Tax-
Exempt Bonds. Fourthly, they could be issued in a
principal amount equivalent to the principal amount of
Tax-Exempt Bonds at an adjustable rate of interest,
varying with such Tax-Exempt Bonds but having a "cap"
(not greater than 13%) above which the interest on
Collateral Bonds could not rise. For further
information with respect to the Reimbursement
Agreement, the proposed insurance arrangement and the
Collateral Bonds, reference is made to Exhibits A-3, A-
6, B-10 and B-11.
13. Each series of the Collateral Bonds that bear interest
would bear interest at a fixed interest rate or initial
adjustable interest rate not to exceed 13%. The
maximum aggregate principal amount of the Collateral
Bonds would be $300,000,000. The Collateral Bonds
would in addition to the aggregate limitation on the
Bonds authorized in Section B above. The terms of the
Collateral Bonds relating to maturity, interest payment
dates, if any, redemption provisions and acceleration
will correspond to the terms of the related Tax-Exempt
Bonds. Upon issuance, the terms of each series of the
Collateral Bonds will not vary during the life of such
series except for the interest rate of any such series
that bears interest at an adjustable rate.
14. For further information with respect to the terms of
the Equipment Lease and Indenture, reference is made to
Exhibits B-8 and B-9.
15. It is contemplated that Tax-Exempt Bonds may be sold by
the Issuer pursuant to arrangements with an underwriter
or a group of underwriters or by private placement in a
negotiated sale or sales. The Company will not be
party to the underwriting or placement arrangements;
however, the Agreement will provide that the terms of
Tax-Exempt Bonds, and their sale by the Issuer(s),
shall be satisfactory to the Company, and the Company
would provide certain related representations and
indemnities. The Company understands that interest
payable on Tax-Exempt Bonds will not be included in the
gross income of the holders thereof for Federal income
tax purposes under the provisions of Section 103 of the
Internal Revenue Code of 1986, as amended to the day of
issuance of Tax-Exempt Bonds (except for interest on
any Tax-Exempt Bond during a period in which it is held
by a person who is a "substantial user" of the
Facilities or a "related person" within the meaning of
Section 147(a) of such Code). The interest rates on
tax-exempt bonds have been, and are expected to be,
lower at the time(s) of issuance of Tax-Exempt Bonds
than the interest rates on bonds of similar tenor,
maturities and comparable quality, interest on which is
fully subject to Federal income tax.
Section D. Acquisition Program
1. The Company further proposes to use, in addition to or
as an alternative for the proceeds from the sale of
Bonds, MTNs, Preferred and/or Tax-Exempt Bonds, other
available funds to acquire by tender offer, open market
or negotiated purchases or otherwise, at any time or
from time to time for the period through December 31,
1995, in whole or in part, prior to their respective
maturities (subject to any limitations or conditions on
acquisition of particular series) not to exceed
$600,000,000 aggregate principal amount and par value
and/or stated value of (1) one or more series of the
Company's outstanding First Mortgage Bonds or sub-
series of MTNs, (2) one or more series of the Company's
outstanding Preferred Stock, (3) one or more series of
outstanding Pollution Control Revenue Bonds and
Industrial Development Revenue Bonds heretofore issued
for the benefit of the Company, (4) the Company's
outstanding series of Debentures, and/or (5) the
Company's outstanding series of Preference Stock (such
First Mortgage Bonds, MTNs, Preferred Stock, Pollution
Control Revenue Bonds, Industrial Development Revenue
Bonds, Debentures and Preference Stock collectively
referred to as the "Outstanding Securities")
(collectively, "New Acquisition Program").
2. The Company is currently precluded from redeeming
certain series of the Outstanding Securities due to
refunding or other redemption restrictions.
Accordingly, the Company proposes to repurchase for
cash all or a portion of one or more such series of
Outstanding Securities through tender offer,
negotiated, open market or other forms of purchase or
otherwise by means other than redemption (subject to
any limitations or conditions on acquisition of
particular series). The Company may also choose to
acquire Outstanding Securities of series which are not
subject to refunding or other redemption limitations by
means of tender offer, negotiated, open market or other
forms of purchases or otherwise (subject to any
limitations or conditions on acquisition of particular
series) if such means of acquisition are more
beneficial to the Company than redemption at the
applicable redemption price. If any Outstanding
Securities are acquired by means of tender offer, the
Company may offer to acquire specified amounts of a
particular series or an entire series of such
Outstanding Securities.
3. The Company shall not use the proceeds from the sale of
Bonds, MTNs, Preferred and/or Tax-Exempt Bonds to enter
into refinancing transactions unless (A) the estimated
present value savings derived from the net difference
between interest or dividend payments on a new issue of
comparable securities and those securities refunded is,
on an after-tax basis, greater than the present value
of all repurchasing, redemption, tendering and issuing
costs, assuming an appropriate discount rate,
determined on the basis of the then estimated after-tax
cost of capital of Entergy Corporation and its
subsidiaries, consolidated, or (B) the Company shall
have notified the Commission of the proposed
refinancing transaction (including the terms thereof)
by post-effective amendment hereto and obtained
appropriate supplemental authorization from the
Commission to consummate such transaction.
4. The authority sought hereby is in addition to any
acquisitions, retirements or redemptions that may be
effected by the Company pursuant to the exemptions set
forth in Rule 42 under the Holding Company Act or other
rules or orders of the Commission from time to time in
effect.
Section E. Other
The proceeds to be received from the issuance and sale
of the Bonds, MTNs, Preferred and Tax-Exempt Bonds will
not be used to invest directly or indirectly in an
exempt wholesale generator ("EWG") or foreign utility
company, as defined in Section 32 or 33, respectively,
of the Holding Company Act. If the proceeds of such
sales are used to refund outstanding securities, any
savings derived from the refunding transaction will not
be used to acquire or otherwise invest in an EWG or
foreign utility company.
Information with respect to Entergy Corporation's EWG
investments will be supplied by amendment.
Item 2. Fees, Commissions and Expenses
To be supplied by amendment.
Item 3. Applicable Statutory Provisions
(a) Bonds, MTNs and Preferred
The Company believes that Sections 6(a) and 7 of the Holding
Company Act and Rules 23, 24 and 50 thereunder apply to the
proposed issuance(s) and sale(s) of Bonds, MTNs and
Preferred. As described in Item 1, the Company plans to
utilize alternative procedures under Rule 50 for the sale of
any series of Bonds, MTNs, or Preferred to be sold at
competitive bidding, and the exemption from Rule 50(b) is
sought for such sale(s) as contemplated by Holding Company
Act Release Nos. 22623 and 23122. However, for the reasons
set forth in Item 1 herein, the Company requests that the
Commission exempt the issuance(s) and sale(s) of the MTNs
and one or more series of Bonds and/or Preferred from such
requirements pursuant to paragraph (a)(5) of Rule 50, in
order to permit the Company to effect the sales of (1)
Bonds, MTNs, and/or Preferred by means of negotiated public
offering or private placement if the Company deems any such
method of sale to be preferable under the circumstances, and
(2) MTNs by means of sales to or through agents.
(b) Tax-Exempt Bonds
The sections of the Holding Company Act and the rules
thereunder which the Company considers may be applicable to
the tax-exempt financing of the Facilities are set forth
below:
(i) Lease of the Section 12(d) and
Facilities exempt by reason of
to the Issuer(s) Rule 44(b)(3)
(ii) Sublease of Section 9(a) and 10
the Facilities from
the Issuer(s)
(iii) Reimbursement Agreement Sections 6(a) and 7 and
exempt from Rule 50 under
Rule 50(a)(2)
(iv) Issuance and Pledge Sections 6(a) and 7
of Collateral Bonds and Rule 50
With respect to the issuance and pledge of Collateral Bonds,
the Company requests a finding of the Commission that
although the issuance of Collateral Bonds may be subject to
Rule 50 under the Holding Company Act, competitive bidding
would be inappropriate under the circumstances described
herein inasmuch as Collateral Bonds would be issued and
pledged solely to secure the Company's obligations to the
Issuer(s) and/or the Bank, and no public offering by the
Company of Collateral Bonds would be made.
(c) Acquisition Program
The Company believes that Sections 9(a), 10 and 12(c) of the
Holding Company Act and Rule 42 thereunder apply to the
proposed acquisition of Outstanding Securities.
In the event that the Commission deems any other section of
the Holding Company Act or rule thereunder to be applicable,
the Company requests that the Commission's order or orders
herein also be issued under and with respect to such other
section or rule.
Item 4. Regulatory Approval
No state regulatory body or agency and no Federal commission
or agency other than the Commission has jurisdiction over
the transactions proposed herein.
Item 5. Procedure
The Company requests that the Commission's notice of
proposed transactions published pursuant to Rule 23(e) be
issued by March 18, 1994, or as soon thereafter as
practicable, and that such notice grant, pursuant to Rule
50(a)(5), an exception from Rule 50 authorizing the Company
to undertake negotiations with respect to the proposed
issuance and sale of Bonds, MTNs and/or Preferred. The
Company further requests that the Commission's order
authorizing the Acquisition Program be entered by April 18,
1994, or as soon thereafter as practicable. The Company
consents that the Commission's order authorizing the above
transactions may contain reservations of jurisdiction over
(i) the proposed issuance and sale of Bonds and/or MTNs
and/or Preferred through competitive bidding, (ii) the
proposed issuance and sale of MTNs through or to agents and
the proposed issuance and sale through negotiated public
offering or private placement of specific series of Bonds
and/or Preferred and the granting of an exception from the
competitive bidding requirements of Rule 50 in respect
thereof, and (iii) the proposed transactions related to the
issuance of Tax-Exempt Bonds, in each case pending
completion of the record with respect thereto.
The Company hereby waives a recommended decision by a
hearing officer or any other responsible officer of the
Commission; agrees that the Staff of the Division of
Investment Management may assist in the preparation of the
Commission's decision; and requests that there be no waiting
periods between the issuance of the Commission's orders and
the dates on which they are to become effective.
In connection with the proposed acquisition of Outstanding
Securities, the Company respectfully requests authority to
file certificates pursuant to Rule 24 on an annual basis,
within 30 days following the end of each calendar year. In
connection with the proposed sale of MTNs, the Company
respectfully requests authority to file certificates
pursuant to Rule 24 within 30 days after issuance.
Item 6. Exhibits and Financial Statements
(a) Exhibits:
A-1 Indenture of Mortgage, as amended by certain
Supplemental Indentures (filed as the exhibits and
in the file numbers indicated) B-a-I-1 in
Registration No. 2-2449 (Mortgage); 7-A-9 in
Registration No. 2-6893 (Seventh); B to Form 8-K
dated September 1, 1959 (Eighteenth); B to Form 8-
K dated February 1, 1966 (Twenty-second); B to
form 8-K dated March 1, 1967 (Twenty-third); C to
Form 8-K dated March 1, 1968 (Twenty-fourth); B to
Form 8-K dated November 1, 1968 (Twenty-fifth); B
to Form 8-K dated April 1, 1969 (Twenty-sixth); 2-
A-8 in Registration No. 2-66612 (Thirty-eighth); 4-
2 to Form 10-K for the year ended December 31,
1984 in 1-2703 (Fifty-third); 4 to Form 8-K dated
July 29, 1992 in 1-2703 (Fifty-fourth); 4 to Form
10-K dated December 31, 1992 in 1-2703 (Fifty-
fifth); 4 to Form 10-Q for the quarter ended March
31, 1993 in 1-2703 (Fifty-sixth); and 4-2 to
Amendment No. 9 to Registration No. 2-76551 (Fifty-
seventh)).
**A-2 Proposed form(s) of additional Supplemental
Indenture(s) relating to the Bonds.
**A-3 Proposed form(s) of additional Supplemental
Indenture(s) relating to the Collateral Bonds.
**A-4 Proposed form(s) of Bond.
**A-5 Proposed form of MTN.
**A-6 Proposed form(s) of Collateral Bonds.
*A-7 Restated Articles of Incorporation, as amended
(filed as Exhibits A-11 and A-11(a) in File No. 70-
8059).
**A-8 Proposed form(s) of Amendment to Restated Articles
of Incorporation, as amended, establishing series
of the Preferred.
*A-9 By-laws, as presently in effect (filed as Exhibit
A-12 in File No. 70-8059).
**A-10 Proposed form(s) of Preferred Certificate.
**A-11 Proposed form(s) of documents relating to
Depositary Preferred.
**B-1 Proposed form of letter to prospective purchasers
relating to proposals for the purchase of Bonds.
**B-2 Proposed form(s) of agreement for sale(s) of
Bonds.
**B-3 Form of Distribution Agreement relating to MTNs.
**B-4 Proposed form of letter to prospective purchasers
relating to proposals for the purchase of MTNs.
**B-5 Proposed form of agreement for sale(s) of MTNs.
**B-6 Proposed form of letter to prospective purchasers
relating to proposals for the purchase of
Preferred.
**B-7 Proposed form(s) of agreement for sale(s) of
Preferred.
**B-8 Proposed form(s) of Indenture.
**B-9 Proposed form(s) of Equipment Lease and Sublease.
**B-10 Form of letter of credit and Reimbursement
Agreement (including Letter of Credit)
**B-11 Form of insurance policy relating to bond
insurance.
**C Registration Statement(s), if any, relating to
Bonds, MTNs and Preferred.
D Inapplicable.
E Inapplicable.
**F-1 Opinion(s) of Orgain, Bell & Tucker, L.L.P.
**F-2 Opinion(s) of Reid & Priest.
H-1 Suggested form of notice of proposed transactions
for publication in the Federal Register.
**I-1 Preliminary computations of pro forma earnings
coverage required for the issuance of Bonds under
the Mortgage.
**I-2 Preliminary computations of pro forma earnings
coverage required for the issuance of Preferred
under the Articles.
_______________________
* Incorporated herein by reference as indicated.
** To be filed by amendment.
(b) Financial Statements:
Financial Statements of the Company as of December 31,
1993.*
Financial Statements of Entergy Corporation and
subsidiaries, consolidated, as of December 31, 1993.*
Notes to Financial Statements of the Company and of
Entergy Corporation and subsidiaries (included in the
Annual Report on Form 10-K for the year ended December
31, 1993, filed in File Nos. 1-2703 and 1-3517,
respectively, and incorporated herein by reference).*
Item 7. Information as to Environmental Effects.
(a) As stated in Item 5, the Company would appreciate
receiving the initial order of the Commission in this file
authorizing, subject to the reservations of jurisdiction set
forth above, the transactions proposed herein on or before April
18, 1994. As more fully described in Item 1, the proposed
transactions subject to the jurisdiction of the Commission relate
only to the financing activities of the Company and do not
involve a major Federal action having a significant impact on the
human environment.
(b) Not applicable.
_______________________
* There are currently no financial statements available as of
a date less than 120 days prior to the filing. The above
financial statements are expected to be available on or
about March 16, 1994 and will be filed in this proceeding
promptly thereafter.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
statement to be signed on its behalf by the undersigned thereunto
duly authorized.
GULF STATES UTILITIES COMPANY
By: /s/ Glenn E. Harder
Glenn E. Harder
Vice President-Financial
Strategies and Treasurer
Dated: March 7, 1994
Exhibit H-1
Form of Notice of Proposed Transactions
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filings Under the Public Utility Holding Company Act of 1935
("Act")
, 1994
Notice is hereby given that the following filings(s)
has/have been made with the Commission pursuant to provisions of
the Act and rules promulgated thereunder. All interested persons
are referred to the application(s) and/or declarations(s) for
complete statements of the proposed transactions(s) summarized
below. The application(s) and/or declaration(s) and any
amendments thereto is/are available for public inspection through
the Commission's Office of Public Reference.
Interested persons wishing to comment or request a
hearing on the application(s) and/or declarations(s) should
submit their views in writing by , 1994 to the Secretary,
Securities and Exchange Commission, Washington, D.C. 20549, and
serve a copy on the relevant applicant(s) and/or declarant(s) at
the address(es) specified below. Proof of service (by affidavit
or, in case of an attorney at law, by certificate) should be
filed with the request. Any request for hearing shall identify
specifically the issues of fact or law that are disputed. A
person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in
the matter. After said date, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or
permitted to become effective.
Gulf States Utilities Company (70- )
Gulf States Utilities Company ("GSU"), 350 Pine Street,
Beaumont, Texas 77701, an electric utility subsidiary of Entergy
Corporation, a registered holding company, has filed an
application-declaration pursuant to Sections 6(a), 7, 9(a), 10
and 12(d) of the Act and Rules 42, 44 and 50 thereunder.
GSU proposes to issue and sell not more than
$700,000,000 aggregate principal amount of par value and/or
stated value of its preferred stock (as described below) and/or
one or more new series of its first mortgage bonds ("Bonds")
and/or one or more new sub-series of the medium term note series
of its first mortgage bonds ("MTNs") from time to time through
December 31, 1995. The medium term note series of first mortgage
bonds was created in the Fifty-seventh Supplemental Indenture to
GSU's mortgage and is equally secured with other first mortgage
bonds issued thereunder. Each series of Bonds or sub-series of
MTNs will be sold at such price, will bear interest at such rate
or rates and will mature on such date (not more than 40 years
from the first day of the month of issuance) as will be
determined at the time of sale. No series of Bonds will be sold
if the interest rate thereon would exceed 15%. No sub-series of
MTNs will be issued at rates in excess of those generally
obtained at the time of pricing for sales of medium term notes
having the same maturity, issued by companies of comparable
credit quality and having similar terms, conditions and features.
The price, exclusive of accrued interest, to be paid for each
series of Bonds to be sold at competitive bidding will be within
a range of not more than 5 percentage points, but shall not
exceed 5 percentage points above or below 100% of the principal
amount of such series of Bonds, and the price of each sub-series
of MTNs will be within a range of 95-105% of the principal
amount. GSU requests an exception from the Commission's
Statement of Policy Regarding First Mortgage Bonds (HCAR No.
13105, February 16, 1956, as modified by HCAR No. 16369, May 8,
1969) ("Bond SOP") to the extent that the redemption provisions,
the sinking fund provisions (or lack thereof), the covenant
limiting common stock dividends and/or the maintenance and
replacement provisions (or lack thereof) with respect to any
series of Bonds or sub-series of MTNs deviate from the Bond SOP.
GSU further proposes to issue and sell, from time to
time through December 31, 1995, one or more new series of its
preferred stock, cumulative, $100 par value and/or its preferred
stock, cumulative, without par value ("Preferred"). The total
aggregate par or stated value of shares of the Preferred,
together with the aggregate principal amount of the Bonds and
MTNs, may not exceed $700,000,000. The price, exclusive of
accumulated dividends, and the dividend rate for each series of
Preferred will be determined at the time of sale. The price to
be paid for any series of Preferred to be sold at competitive
bidding will be not less than par or stated value and not more
than 102.75% thereof per share, plus accumulated dividends, if
any. No series of Preferred would be sold if the dividend rate
thereon would exceed 15%. GSU requests an exception from the
Commission's Statement of Policy Regarding Preferred Stock (HCAR
No. 13106, February 16, 1956, as modified by HCAR No. 16758, June
22, 1970) ("Stock SOP") to the extent that the redemption
provisions of any series of Preferred deviate from the Stock SOP.
Depending upon market conditions, GSU may sell one or more series
of Preferred having a par value of $100 to underwriters for
deposit with a bank or trust company ("Depositary"). The
underwriters would then receive from the Depositary and deliver
to the repurchasers in the subsequent public offering shares of
depositary preferred stock ("Depositary Preferred"), each
representing a stated fraction of a share of the new series of
Preferred. Depositary Preferred would be evidenced by depositary
receipts. Each owner of Depositary Preferred would be entitled
proportionally to all the rights and preferences of the series of
Preferred (including dividends, redemption and voting). A holder
of Depositary Preferred will be entitled to surrender Depositary
Preferred to the Depositary and receive the number of whole
shares of Preferred represented thereby. A holder of Preferred
will be entitled to surrender shares of Preferred to the
Depositary and receive a proportional amount of Depositary
Preferred.
GSU also states that certain terms applicable to the
Bonds, MTNs and Preferred contained in GSU's existing mortgage
and charter deviate from the Bond SOP and Stock SOP, and requests
authorization of such deviations. GSU states that it does not
believe those deviations are material.
GSU proposes to use the net proceeds derived from the
issuance and sale of Bonds, MTNs and/or Preferred for general
corporate purposes, including, but not limited to, the repayment
of outstanding securities when due and/or the possible
redemption, acquisition or refunding of certain outstanding
securities prior to their stated maturity or due date.
GSU states that it may sell the Bonds, MTNs and
Preferred pursuant to the competitive bidding requirements of
Rule 50, as modified by Release Nos. 22623 and 23122, or, in the
event that GSU determines that a negotiated public offering or
private placement of one or more series of Bonds and/or Preferred
and/or a sale of MTNs by means of agency arrangements or direct
placement with purchasers, would be advantageous, under an
exception, pursuant to Rule 50(a)(5), from the competitive
bidding requirements of Rule 50. GSU requests authorization to
undertake negotiations with respect to arrangements for the
issuance and sale of the Bonds, MTNs and Preferred. It may do
so.
GSU also proposes to enter into arrangements for the
issuance and sale of tax-exempt bonds ("Tax-Exempt Bonds") and in
connection therewith, GSU proposes, from time to time through
December 31, 1995, to enter into one or more equipment
lease/sublease arrangements and/or supplements thereto
("Equipment Lease"), pursuant to which one or more governmental
authorities ("Issuers") may issue one or more series of Tax-
Exempt Bonds under one or more indentures ("Indenture") in an
aggregate principal amount not to exceed $250,000,000. The net
proceeds from the sale of Tax-Exempt Bonds will be used to
finance certain facilities including but not limited to sewage
and/or solid waste disposal or pollution control facilities that
have not heretofore been the subject of such financing, or to
refinance outstanding tax-exempt bonds issued for that purpose.
GSU further proposes, under the Equipment Lease, to
lease certain pollution control facilities ("Facilities") to the
Issuers and simultaneously sublease such Facilities from the
Issuers at subrentals sufficient (together with other monies held
by the trustee under the applicable Indenture and available for
such purpose) to pay the principal or redemption price of,
premium, if any, interest and other amounts owing on the Tax-
Exempt Bonds together with related expenses. Under the Equipment
Lease, GSU will also be obligated to pay certain fees incurred in
the transactions.
The price to be paid to the Issuer(s) for each series
of Tax-Exempt Bonds and the interest rate applicable thereto will
be determined at the time of sale. The Equipment Lease and the
Indenture will provide for either a fixed interest rate or an
adjustable interest rate for each series of the Tax-Exempt Bonds.
No series of Tax-Exempt Bonds would be sold if the fixed interest
rate or initial adjustable interest rate thereon would exceed
13%, or if subsequent interest rates for adjustable interest rate
Tax-Exempt Bonds would exceed 13%. The Tax-Exempt Bonds will
mature not earlier than five years from the first day of the
month of issuance nor later than 40 years from the date of
issuance. Each series may be subject to redemption and/or
sinking fund provisions.
GSU may arrange for one or more irrevocable letter(s)
of credit, in an aggregate amount up to $300,000,000 and for a
term not to exceed 10 years, from a bank, in favor of the trustee
for one or more series of Tax-Exempt Bonds. GSU would enter into
a letter of credit and reimbursement agreement ("Reimbursement
Agreement") with the bank under which GSU would agree to
reimburse the bank for amounts drawn under the letter of credit
and to pay certain fees, including up-front fees not to exceed
$100,000 and annual fees not to exceed 1-1/4% of the face amount
of the letter of credit.
In addition, or as an alternative to a letter of
credit, GSU may (1) provide an insurance policy for one or more
series of Tax-Exempt Bonds, and/or (2) obtain authentication of
one or more new series of its First Mortgage Bonds ("Collateral
Bonds") to be issued under GSU's mortgage and delivered to the
trustee or the bank to evidence and secure GSU's obligations
under the Equipment Lease or the Reimbursement Agreement. Such
Collateral Bonds could be issued: (1) in a principal amount
equal to the principal amount of Tax-Exempt Bonds and bearing
interest at a rate equal to the rate of interest on such Tax-
Exempt Bonds; (2) in a principal amount equivalent to the
principal amount of Tax-Exempt Bonds plus an amount equal to
interest on those Tax-Exempt Bonds for a specified period and
bearing no interest; (3) in a principal amount equivalent to the
principal amount of Tax-Exempt Bonds or in such amount plus an
amount equal to interest on those Tax-Exempt Bonds for a
specified period, but carrying a fixed interest rate that would
be lower than the fixed interest rate of the Tax-Exempt Bonds; or
(4) in a principal amount of Tax-Exempt Bonds at an adjustable
rate of interest, varying with such Tax-Exempt Bonds but having a
ceiling rate of 13%. Each series of the Collateral Bonds that
would bear interest would do so at a fixed interest rate or
initial adjustable interest rate not to exceed 13%, and at a
subsequent adjustable interest rate not to exceed 13%. The terms
of the Collateral Bonds will correspond to the terms of the
related Tax-Exempt Bonds. The maximum amount of the Collateral
Bonds would be $300,000,000, and the Collateral Bonds would be in
addition to the aggregate limitation on the Bonds specified
above.
In connection with the proposed Tax-Exempt Bonds
financing, GSU requests a finding of the Commission that
competitive bidding of Collateral Bonds pursuant to Rule 50 is
inappropriate since Collateral Bonds would be issued and pledged
solely to secure the Company's obligations and no public offering
of Collateral Bonds would be made.
GSU also proposes to use, in addition to or as an
alternative for the proceeds from the sale of the Bonds, MTNs,
Preferred and/or Tax-Exempt Bonds, other available funds to
acquire, through tender offers or otherwise, at any time, or from
time to time, through December 31, 1995, in whole or in part,
prior to their respective maturities, not more than $600,000,000
aggregate principal amount and par value and/or stated value of
certain of its outstanding securities including but not limited
to (1) one or more series of GSU's outstanding First Mortgage
Bonds or sub-series of MTNs, (2) one or more series of GSU's
outstanding Preferred Stock, (3) one or more series of
outstanding tax-exempt bonds heretofore issued for the benefit of
GSU, (4) GSU's outstanding series of Debentures, and/or (5) GSU's
outstanding series of Preference Stock.
GSU states that it shall not use the proceeds from the
sale of Bonds, MTNs, Preferred and/or Tax-Exempt Bonds to enter
into refinancing transactions unless: (1) the estimated present
value savings derived from the net difference between interest or
dividend payments on a new issue of comparable securities and
those securities refunded is, on an after-tax basis, greater than
the present value of all repurchasing, redemption, tendering and
issuing costs, assuming an appropriate discount rate, determined
on the basis of the then estimated after-tax cost of capital of
Entergy Corporation and its subsidiaries, consolidated; or (2)
GSU shall have notified the Commission of the proposed
refinancing transaction (including the terms thereof) and
obtained appropriate authorization to consummate the transaction.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz
Secretary
