<PAGE> File No. 70-6458
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
Post-Effective Amendment No. 17
to
FORM U-1
________________________________
APPLICATION OR DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
***
INDIANA MICHIGAN POWER COMPANY
One Summit Square, P.0. Box 60, Fort Wayne, Indiana 46801
(Name of company filing this statement and
address of principal executive offices)
***
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
***
G. P. Maloney, Executive Vice President
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
Jeffrey D. Cross, Assistant General Counsel
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
The undersigned Indiana Michigan Power Company, formerly
Indiana & Michigan Electric Company ("I&M"), hereby amends as
follows its Application or Declaration on Form U-1 in File No. 70-
6458, as heretofore amended:
1. By adding the following additional paragraphs to the end
of Item 1 of said Form U-1:
"By prior Orders dated June 11, 1980 and June 25, 1980
(HCAR Nos. 21618 and 21642, respectively), I&M was authorized
to enter into an agreement of sale ('Agreement') with the City
of Rockport, Indiana ('City'). By subsequent Order dated
August 2, 1985 (HCAR No. 23781), I&M was authorized to enter
into amendments to the Agreement providing for the issuance
and sale of three additional series of pollution control bonds
('Series 1985 Bonds'), each in the principal amount of
$50,000,000 with a maturity of August 1, 2014.
The Series 1985 Bonds consisted of: (i) a series of
Variable Rate Bonds; (ii) the Adjustable Rate Tender Pollution
Control Revenue Refunding Bonds with an interest rate which
adjusts every five years based upon an index ('Adjustable Rate
Bonds'); and (iii) a series of Fixed Rate Bonds ('Fixed Rate
Bonds') bearing interest at 9-1/4% per annum.
By Order dated October 5, 1994 (HCAR No. 26136), the
Commission authorized I&M to enter into an agreement with the
City whereby the City would issue and sell an additional
series of Fixed Rate Pollution Control Revenue Refunding Bonds
in the aggregate principal amount of up to $50,000,000, the
proceeds of which will be used to provide for the early
redemption of the Fixed Rate Bonds.
I&M's management now believes that the outstanding
Adjustable Rate Bonds do not offer I&M sufficient flexibility
because the interest rate for that series, by its terms,
adjusts every five years. I&M can take advantage of better
interest rates if it is not locked into pricing the Adjustable
Rate Bonds on the basis of a five-year rate. Therefore, it is
proposed that the City issue and sell one or more additional
series of Pollution Control Revenue Refunding Bonds in the
aggregate principal amount of up to $50,000,000 ('Refunding
Bonds' or 'Bonds') with an interest rate adjustment (as
determined by I&M). I&M could convert the interest rate on
the Bonds between the various modes from changing daily to
fixed for a term up to maturity. The proceeds of such Bonds
will be used to redeem the Adjustable Rate Bonds.
In connection with the issuance of the Refunding Bonds,
I&M may enter into one or more interest rate hedging
arrangements (including an interest rate swap, cap, collar, or
similar agreement collectively the 'Hedging Facility') with a
bank or other financial institution (the 'Counterparty'). The
Hedging Facility will be an interest rate conversion agreement
designed to allow I&M to actively manage and limit its
exposure to variable interest rates or to lower its overall
borrowing cost on any fixed rate Refunding Bond. The Hedging
Facility will set forth the specific terms upon which I&M will
agree to pay the Counterparty payments and/or fees for
limiting its exposure to interest rates or lowering its fixed
rate borrowing cost, and the other terms and conditions of any
rights or obligations thereunder.
The terms of each Hedging Facility would be negotiated by
I&M with the respective Counterparty and would be the most
favorable terms that can be negotiated by I&M.
The Refunding Bonds will be issued pursuant to the
Indenture of Trust dated as of December 1, 1984 between the
City and Lincoln National Bank & Trust Company (now Norwest
Bank Fort Wayne, N.A.), as Trustee (the 'Indenture'), as
supplemented by a Sixth Supplemental Indenture of Trust
between the City and the Trustee, the form of which is filed
as Exhibit B-7-6 hereto ('Supplemental Indenture') and the
Third Amendment to Agreement of Sale, the form of which is
filed as Exhibit B-4-5 hereto. Pursuant to the Indenture and
the Sixth Supplemental Indenture, the proceeds of the sale of
the Refunding Bonds will be deposited with the Trustee and
applied by the Trustee, together with other funds supplied by
I&M, to the redemption of the Adjustable Rate Bonds at a price
equal to the principal amount thereof.
While I&M will not be a party to the underwriting
arrangements for the Refunding Bonds, the Agreement provides
that the Refunding Bonds shall have such terms as shall be
specified by I&M. I&M understands that interest on the
Refunding Bonds will be exempt from Federal income taxation
under the provisions of Section 103 of the Internal Revenue
Code of 1986, as amended (except for interest on any Refunding
Bond during a period in which it is held by a person who is a
substantial user of the Project or a related person).
It is expected that the Refunding Bonds will mature at a
date or dates not more than 40 years from the date of their
issuance. The Refunding Bonds may be subject to mandatory or
optional redemption under circumstances and terms specified at
the time of pricing or change in interest rate. In addition,
the Refunding Bonds may not, if it is deemed advisable, be
redeemable at the option of the City in whole or in part at
any time for a period to be determined at the time of pricing
or change in interest rate of the Refunding Bonds. No
Refunding Bond may bear interest at an initial interest rate
higher than 9%.
It is not possible to predict precisely the interest rate
which may be obtained in connection with the original issuance
of the Refunding Bonds. However, I&M has been advised that,
depending on maturity and other factors, the annual interest
rate on obligations, interest on which is so excludable from
gross income, historically has been, and can be expected at
the time of issuance of the Refunding Bonds to be, 1-1/2% to
2-1/2% or more lower than the rates of obligations of like
terms and comparable quality, interest on which is fully
subject to Federal income tax. In any event, no series of
Refunding Bonds will be issued at rates in excess of those
generally obtained at the time of pricing for sales of
substantially similar tax-exempt bonds (having the same
maturity, issued by entities of comparable credit quality and
having similar terms, conditions and features).
In connection with an adjustment in the interest rate,
the Refunding Bonds may be tendered, or may be deemed to be
tendered, to the Trustee, by the owners thereof. I&M intends
to remarket any Refunding Bonds so tendered through a
remarketing agent, and may have a Liquidity Provider back up
I&M's obligations. The Refunding Bonds will be subject to
redemption at the direction of I&M under certain
circumstances.
If it is deemed advisable, I&M may provide some form of
credit enhancement for the Refunding Bonds, such as a letter
of credit, surety bond or bond insurance, and I&M may pay a
fee in connection therewith. In addition, I&M may provide for
a Liquidity Provider for interest payments, remarketing,
redemption or maturity of the Refunding Bonds. Any letter of
credit would not exceed $55,000,000. The type of credit
enhancement may change while the Refunding Bonds are
outstanding. Unreimbursed drawings under the letter of credit
would bear interest at not more than 2% above the bank's prime
rate. I&M may pay an annual or upfront fee for the credit
enhancement which would not exceed 1.25% annually of the face
amount.
The Refunding Bonds could be payable from funds drawn
under an irrevocable letter of credit, bond insurance policy,
Standby Bond Purchase Agreement ('SBPA') or other comparable
obligation of a third party. In connection with such credit
enhancement, I&M may enter into a reimbursement agreement,
SBPA or other comparable agreement substantially in the form
attached hereto as Exhibit B-12.
I&M will not agree, without further order of this Commis-
sion, to the issuance of any Refunding Bond by the City (i) if
the stated maturity of any such Bond shall be more than forty
(40) years, (ii) if the discount from the initial public
offering price of any such Bond shall exceed 5% of the
principal amount thereof, or (iii) if the initial public
offering price shall be less than 95% of the principal amount
thereof. I&M will not enter into the proposed refunding
transaction unless the estimated present value savings derived
from the net difference between interest payments on a new
issue of comparable securities and on the securities to be
refunded is, on an after tax basis, greater than the present
value of all redemption and issuing costs, assuming an
appropriate discount rate. The discount rate used shall be
the estimated after-tax interest rate on the Refunding Bonds
to be issued.
The transactions described herein will be consummated no
later than December 31, 1996. I&M hereby requests that an
Order be issued by this Commission (i) releasing jurisdiction
with respect to the purchase price of the Project as it is
affected by the sale of the Refunding Bonds and (ii) reserving
jurisdiction with respect to the purchase price of the Project
as it is affected by the sale of further series of Revenue
Bonds."
2. By adding the following paragraph to the end of Item 2 of
said U-1:
"Estimates of the fees, commissions and expenses to be
paid or incurred directly or indirectly by I&M in connection
with the preparation for and the issuance of Refunding Bonds
will be filed by a further post-effective amendment to this
Application or Declaration."
3. By adding the following paragraph to the end of Item 4 of
said Form U-1:
"The proposed issuance of the Refunding Bonds has been
authorized by the Indiana Utility Regulatory Commission and
Michigan Public Service Commission."
4. By adding the following paragraph at the end of Item 5 of
said Form U-1:
"I&M requests that the Commission's order herein with
respect to the Refunding Bonds be issued on or before April
17, 1995 that there be no thirty-day waiting period between
the issuance of the Commission's order and the date on which
it is to become effective."
5. By supplying the following exhibits:
B-4-5 Form of Third Amendment to Agreement of Sale
(to be filed by amendment)
B-7-6 Form of Sixth Supplemental Indenture between
the City and the Trustee (to be filed by
amendment)
B-12 Form of reimbursement agreement (to be filed
by amendment)
H-2 Form of Notice
6. By supplying the following Financial Statements:
Balance sheets as of December 31, 1994 and Statements of
Income and Retained Earnings, per books and pro forma, for the 12
months ended December 31, 1994, of I&M and of American Electric
Power Company, Inc. and its subsidiaries consolidated, together
with journal entries reflecting the proposed transactions (to be
filed by amendment).
7. By adding the following paragraph at the end of Item 7 of
said Form U-1:
"It is believed that the granting and permitting to
become effective of this Application-Declaration, as it
relates to the Refunding Bonds, will not constitute a major
Federal action significantly affecting the quality of the
human environment. No other Federal agency has prepared or is
preparing an environmental impact statement with respect to
the proposed transaction."
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Post-Effective Amendment No. 17 to be signed on its behalf by the
undersigned thereunto duly authorized.
INDIANA MICHIGAN POWER COMPANY
By __/s/ G. P. Maloney________
Vice President
Dated: March 22, 1995
6458pe17.i&m
<PAGE> Exhibit H-2
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. / , 1995
___________________________________
:
In the Matter of :
:
INDIANA MICHIGAN POWER COMPANY :
One Summit Square, P.O. Box 60 :
Fort Wayne, Indiana 46801 :
:
(70-6458) :
___________________________________:
NOTICE OF PROPOSED ISSUANCE OF REFUNDING BONDS BY CITY OF ROCKPORT,
INDIANA IN CONNECTION WITH POLLUTION CONTROL FINANCING
NOTICE IS HEREBY GIVEN that Indiana Michigan Power Company ("I&M"),
an electric utility subsidiary of American Electric Power Company,
Inc., a registered holding company, has filed with this Commission
a post-effective amendment to its Application or Declaration previ-
ously filed and amended pursuant to the Public Utility Holding
Company Act of 1935 (the "Act"), designating Sections 9(a), 10 and
12(d) of the Act and Rule 44(b) promulgated thereunder as
applicable to the proposed transaction. All interested persons are
referred to the Application or Declaration, as amended by said
post-effective amendments, which is summarized below, for a com-
plete statement of the proposed transaction.
By Order dated June 11, 1980 (HCAR No. 21618), the Commission
authorized I&M to dispose of and acquire certain pollution control
systems ("Project") at its Rockport Generating Station ("Plant"),
under construction near the City of Rockport in Spencer County,
Indiana ("City") to comply with prescribed environmental control
standards of the State of Indiana. I&M's disposition and acqui-
sition was undertaken pursuant to an Agreement of Sale with the
City, dated June 1, 1980, and in connection with the issuance by
the City of pollution control revenue bonds in the amount of
$40,000,000 to finance the project (HCAR No. 21642, June 25, 1980).
This represented a portion of I&M's then estimated cost of
$150,000,000, for its 50% obligation for the Project shared with
AEP Generating Company, another subsidiary of AEP (HCAR No. 23399,
August 17, 1984).
By Order dated December 4, 1984 (HCAR No. 23514), the Commission
authorized I&M to enter a further Agreement of Sale (the "1984
Agreement") with the City providing for the disposition and
acquisition of the Project in connection with the issuance by the
City of $110,000,000 principal amount of pollution control bonds
("Series 1984A Bonds") to finance the Project (HCAR No. 23528,
December 12, 1984).
By Order dated August 2, 1985 (HCAR No. 23781), the Commission
authorized I&M to enter into a First Amendment to Agreement of Sale
(the "1985 Agreement") with the City providing for the issuance and
sale of three additional series of pollution control bonds ("Series
1985 Bonds"), each in the principal amount of $50,000,000 with a
maturity of August 1, 2014. One series of Floating Rate Bonds
bears interest at a variable rate, based upon an index and not to
exceed 12% per annum, determined weekly and payable monthly. A
second series of Adjustable Bonds bears interest payable semi-
annually at a rate which will be adjusted every five years based
upon an index (the "Adjustable Rate Bonds"). A third series of
Fixed Rate Bonds was refunded with another series of fixed rate
bonds pursuant to this Commission's Order dated October 5, 1994
(HCAR No. 26136). The proceeds of the Series 1985 Bonds were used
to cover a portion of the cost of construction of the Project and
to refund the outstanding short-term Series 1984 A Bonds in the
principal amount of $110,000,000.
By post-effective amendment it is stated that the City now proposes
to issue and sell a series of refunding bonds (the "Refunding
Bonds") in the aggregate principal amount of $50,000,000, the net
proceeds from the sale of which will be used to provide for the
principal payment required for the refunding of $50,000,000
principal amount of the Adjustable Rate Bonds. The Refunding Bonds
will be issued under and secured by the Indenture and a sixth
supplemental indenture and will mature at a date or dates not more
than forty years from the date of issuance. I&M may provide credit
enhancement for the Refunding Bonds in the form of a letter of
credit, surety bond or bond insurance and pay any related fees.
The fees and expenses to be incurred in connection with the pro-
posed transaction will be supplied by further amendment. It is
stated that the Indiana Utility Regulatory Commission and Michigan
Public Service Commission have authorized the transaction and that
no other state commission and no federal commission, other than
this Commission, has jurisdiction thereover.
The Application or Declaration and any amendments thereto are
available for public inspection through the Commission's Office of
Public Reference. Interested persons wishing to comment or request
a hearing should submit their views in writing by April __, 1995 to
the Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the applicant or declarant at the
address specified above. Proof of service (by affidavit or, in
case of any attorney at law, by certificate) should be filed with
the request. Any request for a 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 this matter. After
said date, the Application or Declaration, as filed or as it may be
amended, may be permitted to become effective.
For the Commission, by the Office of Public Utility Regulation,
pursuant to delegated authority.
Jonathan G. Katz
Secretary
6458pe17.exh
