PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 5, 1995
$55,000,000
INDIANA GAS COMPANY, INC.
Medium-Term Notes, Series E
Due Not Less Than 9 Months From Date of Issue
______________
Indiana Gas Company, Inc. may offer from time to time its
Medium-Term Notes, Series E in the aggregate initial offering
price of up to $55,000,000 subject to reduction as a result of
the sale of other Debt Securities as described in the
accompanying Prospectus. Each Note will mature on a date not
less than 9 months from its date of issue. Each Note may also be
subject to redemption at the option of the Company or be
repayable by the Company in whole or in part at the option of the
Holder prior to maturity.
Each Note will bear interest at a fixed rate or at a
floating rate determined by reference to the Commercial Paper
Rate, LIBOR, Treasury Rate, CD Rate, CMT Rate, Federal Funds Rate
or the Prime Rate or any other Base Rate, as selected by the
purchaser and agreed to by the Company, adjusted by the Spread
and/or Spread Multiplier, if any, applicable to such Note.
Unless otherwise indicated in the Pricing Supplement to this
Prospectus Supplement, interest on each Fixed Rate Note will be
payable semiannually in arrears on each March 15 and September 15
and at maturity or redemption or repayment, if any.
The interest rate or interest rate formula, Issue Price,
Stated Maturity, Interest Payment Dates, redemption provisions
and certain other terms with respect to each Note will be
<PAGE>
established at the time of issuance and set forth in a Pricing
Supplement to this Prospectus Supplement.
Each Note will be issued in book-entry form and will be
represented by a Global Note registered in the name of a nominee
of The Depository Trust Company, as Depositary, unless the
applicable Pricing Supplement specifies that the related Notes
will be evidenced by certificates issued in definitive form.
Interests in Global Notes representing Book-Entry Notes will be
shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and its participants. Book-
Entry Notes will not be issuable as Certificated Notes except
under the circumstances described herein. See "Supplemental
Description of the Notes".
______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
______________
<TABLE>
<CAPTION>
Price to Agents' Proceeds to
Public (1) Commissions (2) Company (2)(3)
<S> <C> <C> <C>
Per Note ...... 100% .125% to .875% 99.875% - 99.125%
Total ........ $55,000,000 $68,750 - $481,250 $54,931,250-$54,518,750
__________________
<FN>
(1) Unless otherwise specified in the applicable Pricing
Supplement, the price to the public will be 100% of
the principal amount.
(2) The Company will pay to the Agents a commission of
from .125% to .875%, depending on maturity, of the
principal amount of any Notes sold through them as
agents. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as
principal will be purchased by such Agent at a price
equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an
agency sale of a Note of identical maturity, and may
be resold by such Agent to investors or other
purchasers at varying prices related to prevailing
market prices at the time of resale to be determined
by such Agent or, if so agreed, at a fixed offering
price. The Company may also sell Notes directly to
investors in which case no commission will be payable.
The Company has agreed to indemnify the Agents against
certain liabilities including liabilities under the
<PAGE>
Securities Act of 1933. See "Supplemental Plan of
Distribution".
(3) Before deduction of expenses payable by the Company
estimated at $75,000.00, including reimbursement of
certain expenses of the Agents.
</TABLE>
______________
Offers to purchase Notes are being solicited, on a reasonable
efforts basis, from time to time by the Agents on behalf of the
Company. Notes may be sold to the Agents on their own behalf at
negotiated discounts. The Company reserves the right to sell
Notes directly to investors on its own behalf. The Company
reserves the right to withdraw, cancel or modify the offering
contemplated hereby without notice. The Company or an Agent may
reject an offer as a whole or in part. See "Supplemental Plan of
Distribution".
Goldman, Sachs & Co. Merrill Lynch & Co.
______________
The date of this Prospectus Supplement is April 5, 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
USE OF PROCEEDS
The net proceeds from the sale of the Medium-Term Notes,
Series E of Indiana Gas Company, Inc. (the "Company") (the
"Notes") will be used to finance, in part, the refunding of long-
term debt, the Company's continuing construction program and for
other corporate purposes.
Construction expenditures for the fiscal year 1994 were
approximately $57,000,000 and the Company expects that
approximately $55,000,000 will be expended in fiscal year 1995
and approximately $57,000,000 will be expended in fiscal year
1996. In 1994, 75% of the Company's capital expenditures was
provided by funds generated internally. In 1993, 62% of capital
expenditures was provided by funds generated internally. The
1993 percentage was lower than budget as a result of completing
significant upgrades to the gas distribution system to allow for
greater operating flexibility in the FERC Order 636 environment.
SUPPLEMENTAL DESCRIPTION OF THE NOTES
The following description of the particular terms of the
Notes supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of
the Notes set forth under "Description of Debt Securities" in the
accompanying Prospectus, to which description reference is hereby
made. Capitalized terms used herein, unless otherwise noted, are
defined in the accompanying Prospectus or in the Indenture.
Unless otherwise specified in the applicable Pricing
Supplement, the following description of Notes will apply.
General
The Notes will be issued as a series of debt securities
under the Indenture. The Notes will be limited in aggregate
initial offering price to $55,000,000, subject to reduction as a
result of the sale of other Debt Securities as described in the
accompanying Prospectus.
The Notes will be issued in fully registered form only,
without coupons. Each Note will be issued initially in book-
entry form (a "Book-Entry Note") or in certificated form (a
<PAGE>
"Certificated Note"). Each Book-Entry Note will be represented
by one or more fully registered global notes (a "Global Note")
registered in the name of a nominee of The Depository Trust
Company, as Depositary. Except as set forth herein under "Book-
Entry Notes" or in any Pricing Supplement relating to specific
Notes, the Notes will not be issued as Certificated Notes. The
authorized denominations of Notes will be $1,000 and any larger
amount that is an integral multiple of $1,000. Interest rates
offered by the Company with respect to the Notes may differ
depending upon, among other things, the aggregate principal
amount of the Notes purchased in any single transaction.
Each Note will mature on a date not less than 9 months from
its date of issue, as selected by the purchaser and agreed to by
the Company. Each Note may also be subject to redemption at the
option of the Company or repayment at the option of the Holder
prior to its Stated Maturity (as defined below).
The Pricing Supplement relating to a Note will describe the
following terms: (i) whether such Note will bear interest at a
fixed rate (a "Fixed Rate Note") or will bear interest at a
floating rate (a "Floating Rate Note"); (ii) the price (expressed
as a percentage of the aggregate principal amount thereof) at
which such Note will be issued (the "Issue Price"); (iii) the
date on which such Note will be issued (the "Original Issue
Date"); (iv) the date on which such Note will mature (the "Stated
Maturity"); (v) if such Note is a Fixed Rate Note, the rate per
annum at which such Note will bear interest, if any, and the
Interest Payment Dates: (vi) if such Note is a Floating Rate
Note, the Base Rate, the Initial Interest Rate, the Interest
Reset Period, the Interest Reset Dates, the Interest Payment
Dates, the Index Maturity, the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the Spread and/or Spread
Multiplier, if any (all as defined below), and any other terms
relating to the particular method of calculating the interest
rate for such Notes; (vii) if such Note may be redeemed at the
option of the Company, or repaid at the option of the Holder,
prior to Stated Maturity as described under "Redemption" below, a
description of the provisions relating to such redemption or
repayment; (viii) any sinking fund or other mandatory redemption
provisions applicable to such Note; (ix) if such Note will be
issued as a Certificated Note, a statement to that effect; (x)
any other terms of such Note not inconsistent with the provisions
of the Indenture; and (xi) the identity of any additional Agent
through or to whom the Note is sold.
Unless otherwise specified in the applicable Pricing
Supplement, "Interest Payment Date," in the case of Fixed Rate
Notes, means each March 15 and September 15 and in the case of
Floating Rate Notes, has the meaning specified under the caption
"Floating Rate Notes" below.
<PAGE>
Payment of Principal and Interest
Payments of interest on the Notes will be made by wire
transfer in immediately available funds (except that interest on
Certificated Notes will be paid by check except in certain
circumstances) to the Holders of such Notes (which, in the case
of Global Notes representing Book-Entry Notes, will be a nominee
of the Depositary (as defined below)) as of the Regular Record
Date (as defined below) on each Interest Payment Date and at
Stated Maturity or upon earlier redemption or repayment;
provided, however, that if the Original Issue Date of a Note is
after a Regular Record Date and before the corresponding Interest
Payment Date, interest for the period from and including the
Original Issue Date for such Note to but excluding such Interest
Payment Date will be paid on the next succeeding Interest Payment
Date to the Holder of such Note on the related Regular Record
Date.
The Company has appointed Bank of America Illinois as Paying
Agent for the Notes. Unless otherwise specified in the
applicable Pricing Supplement, the principal of the Notes and any
premium thereon payable at Stated Maturity or upon earlier
redemption or repayment will be paid by wire transfer in
immediately available funds (except that payments on Certificated
Notes will be made by check except in certain circumstances) upon
surrender thereof at the office of Bank of America Illinois,
Chicago, Illinois.
If, with respect to any Fixed Rate Note, any Interest
Payment Date, date of redemption ("Redemption Date"), Optional
Repayment Date (as defined below) or the Stated Maturity is not a
Business Day (as defined below), payment of amounts due on such
Fixed Rate Note on such date may be made on the next succeeding
Business Day as if each such payment were made on the date such
payment were due and no interest shall accrue on such amounts for
the period from and after such Interest Payment Date, Redemption
Date, Optional Repayment Date or the Stated Maturity, as the case
may be, to such Business Day.
If, with respect to any Floating Rate Note, any Interest
Payment Date is not a Business Day, such Interest Payment Date
shall be the next succeeding Business Day, except that, if such
Note is a LIBOR Note (as defined below) and such next succeeding
Business Day is in the next succeeding calendar month, such
Interest Payment Date shall be the immediately preceding
Business Day. If the Stated Maturity, Redemption Date or
Optional Repayment Date of a Floating Rate Note is not a Business
Day, payments of principal, premium if any, and interest due on
such Floating Rate Note may be made on the next succeeding
Business Day, and no interest shall accrue on such amounts for
the period from and after such Stated Maturity, Redemption Date
or Optional Repayment Date, as the case may be, to such Business
Day.
<PAGE>
The "Regular Record Date" with respect to any Interest
Payment Date for a Floating Rate Note will be the date (whether
or not a Business Day) fifteen calendar days immediately
preceding such Interest Payment Date, and for a Fixed Rate Note
(unless otherwise specified in the applicable Pricing Supplement)
shall be the March 1 or September 1 (whether or not a Business
Day) immediately preceding an Interest Payment Date for Fixed
Rate Notes.
"Business Day" with respect to any Note means any day, other
than a Saturday or Sunday, which is (i) not a day on which
banking institutions or trust companies in Chicago, Illinois and
The City of New York, New York are authorized or required by law,
regulation or executive order to remain closed and (ii) if such
Note is a LIBOR Note (as defined below), is also a London Banking
Day. "London Banking Day" with respect to any Note means any day
on which dealings in deposits in U.S. dollars are transacted in
the London interbank market.
Fixed Rate Notes
Unless otherwise specified in the applicable Pricing
Supplement, each Fixed Rate Note will bear interest from its
Original Issue Date at the rate per annum stated on the face
thereof until the principal amount thereof is paid or made
available for payment. Unless otherwise specified in the
applicable Pricing Supplement, interest on each Fixed Rate Note
will be payable semiannually in arrears on each Interest Payment
Date and at Stated Maturity or upon earlier redemption or
repayment. Interest payments in respect of Fixed Rate Notes will
equal the amount of interest accrued from and including the
immediately preceding Interest Payment Date in respect of which
interest has been paid or duly made available for payment (or
from and including the Original Issue Date, if no interest has
been paid with respect to the applicable Note) to but excluding
the related Interest Payment Date or the date of Stated Maturity,
redemption or repayment, as the case may be. Interest on Fixed
Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
Floating Rate Notes
Each Floating Rate Note will bear interest from its Original
Issue Date to the first Interest Reset Date (as defined below)
for such Note at the Initial Interest Rate (the "Initial Interest
Rate") set forth on the face thereof and in the applicable
Pricing Supplement. Thereafter, the interest rate on such Note
for each Interest Reset Period will be determined by reference to
an interest rate basis (the "Base Rate"), plus or minus the
Spread, if any, and/or multiplied by the Spread Multiplier, if
any. The "Spread" is the number of basis points (one basis point
equals one one-hundredth of a percentage point) that may be
specified in the applicable Pricing Supplement as being
applicable to such Note, and the "Spread Multiplier" is the
<PAGE>
percentage that may be specified in the applicable Pricing
Supplement as being applicable to such Note. The applicable
Pricing Supplement will designate one of the following Base Rates
as applicable to a Floating Rate Note: (i) the Commercial Paper
Rate (a "Commercial Paper Rate Note"), (ii) LIBOR (a "LIBOR
Note"), (iii) the Treasury Rate (a "Treasury Rate Note"), (iv)
the CD Rate (a "CD Rate Note"), (v) the CMT Rate (a "CMT Rate
Note"), (vi) the Federal Funds Rate (a "Federal Funds Rate
Note"), (vii) the Prime Rate (a "Prime Rate Note"), or (viii)
such other Base Rate or formula as is set forth in such Pricing
Supplement and in such Note. As used herein, the "Index
Maturity" for any Note is the period from issuance to maturity of
the instrument or obligation from which the Base Rate is
calculated; "H.15(519)" means the publication entitled
"Statistical Release H.15(519), Selected Interest Rates", or any
successor publication, published by the Board of Governors of the
Federal Reserve System; and "Composite Quotations" means the
daily statistical release entitled "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or any successor
release published by the Federal Reserve Bank of New York.
As specified in the applicable Pricing Supplement, a
Floating Rate Note also may have either or both of the following
(in each case expressed as a rate per annum on a simple interest
basis): (i) a maximum limitation, or ceiling, on the rate at
which interest may accrue during any interest period ("Maximum
Interest Rate") and (ii) a minimum limitation, or floor, on the
rate at which interest may accrue during any interest period
("Minimum Interest Rate"). Notwithstanding any Maximum Interest
Rate that may be applicable to any Floating Rate Note, the
interest rate on a Floating Rate Note will in no event be higher
than the maximum rate permitted by applicable law, as the same
may be modified by United States law of general application. The
Notes will be governed by the law of the State of Indiana.
The Company will appoint, and enter into an agreement with,
an agent (the "Calculation Agent") to calculate interest rates on
Floating Rate Notes. Unless otherwise specified in the
applicable Pricing Supplement, the Trustee will be the
Calculation Agent. All determinations of interest rates by the
Calculation Agent shall, in the absence of manifest error, be
conclusive for all purposes and binding upon the Holders of the
Floating Rate Notes.
The interest rate on each Floating Rate Note will be reset
daily, weekly, monthly, quarterly, semiannually or annually (such
period being the "Interest Reset Period" for such Note, and the
first day of each Interest Reset Period being an "Interest Reset
Date"), as specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
the Interest Reset Dates will be, in the case of Floating Rate
Notes that reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) that reset
weekly, Wednesday of each week; in the case of Treasury Rate
<PAGE>
Notes that reset weekly, Tuesday of each week (except as provided
below under "Treasury Rate Notes"); in the case of Floating Rate
Notes that reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes that reset quarterly, the third
Wednesday of March, June, September and December of each year; in
the case of Floating Rate Notes that reset semiannually, the
third Wednesday of each of two months of each year specified in
the applicable Pricing Supplement; and, in the case of Floating
Rate Notes that reset annually, the third Wednesday of one month
of each year specified in the applicable Pricing Supplement. If
an Interest Reset Date for any Floating Rate Note would otherwise
be a day that is not a Business Day, such Interest Reset Date
shall be the next succeeding Business Day, except that, in the
case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
Unless otherwise specified in the applicable Pricing
Supplement, interest payable in respect of Floating Rate Notes
will be the accrued interest from and including the Original
Issue Date or the last date to which interest has been paid, as
the case may be, to but excluding the immediately succeeding
Interest Payment Date or the date of Stated Maturity, redemption
or repayment, as the case may be.
Unless otherwise specified in the applicable Pricing
Supplement, with respect to a Floating Rate Note, accrued
interest will be calculated by multiplying the outstanding
principal amount of such Note by an accrued interest factor.
Such accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which
accrued interest is being calculated. The interest factor
(expressed as a decimal calculated to seven decimal places
without rounding) for each such day is computed by dividing the
interest rate in effect on such day by 360, in the case of
Commercial Paper Rate Notes, CD Rate Notes, Prime Rate Notes,
Federal Funds Rate Notes and LIBOR Notes or by the actual number
of days in the year, in the case of CMT Rate Notes or Treasury
Rate Notes. For purposes of making the foregoing calculation,
the interest rate in effect on any Interest Reset Date will be
the applicable rate as reset on such date.
Unless otherwise specified in the applicable Pricing
Supplement, all percentages resulting from any calculation of the
rate of interest on a Floating Rate Note will be rounded, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five
one-millionths of a percent point rounded upward, and all dollar
amounts used in or resulting from such calculation on Floating
Rate Notes will be rounded to the nearest cent (with .5 of a cent
being rounded upward).
Unless otherwise specified in the applicable Pricing
Supplement and except as provided below, interest will be payable
in arrears (i) on the following Interest Payment Dates: in the
<PAGE>
case of Floating Rate Notes that reset daily, weekly or monthly,
on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in
the applicable Pricing Supplement; in the case of Floating Rate
Notes that reset quarterly, on the third Wednesday of March,
June, September and December of each year; in the case of
Floating Rate Notes that reset semiannually, on the third
Wednesday of each of two months of each year specified in the
Pricing Supplement; and in the case of Floating Rate Notes that
reset annually, on the third Wednesday of one month of each year
specified in the applicable Pricing Supplement, and (ii) at
Stated Maturity or upon earlier redemption or repayment.
Upon the request of the Holder of any Floating Rate Note,
the Calculation Agent for such Note will provide the interest
rate then in effect and, if determined, the interest rate that
will become effective on the next Interest Reset Date with
respect to such Floating Rate Note.
As used herein, "Interest Determination Date" means the date
as of which the interest rate for a Floating Rate Note is to be
calculated, to be effective as of the following Interest Reset
Date and calculated on the related Calculation Date (as defined
below). Unless otherwise specified in the applicable Pricing
Supplement, the "Interest Determination Date" pertaining to an
Interest Reset Date for Commercial Paper Rate Notes, CD Rate
Notes, CMT Rate Notes, Federal Funds Rate Notes and Prime Rate
Notes will be the second Business Day next preceding such
Interest Reset Date; the Interest Determination Date pertaining
to an Interest Reset Date for LIBOR Notes will be the second
London Banking Day next preceding such Interest Reset Date; and
the Interest Determination Date pertaining to an Interest Reset
Date for Treasury Rate Notes will be the day of the week in which
such Interest Reset Date falls on which Treasury Bills (hereafter
defined) are normally auctioned. At the date of this Prospectus
Supplement, Treasury Bills are normally sold at auction on Monday
of each week, unless that day is a legal holiday, in which case
the auction is normally held on the following Tuesday, except
that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on a day that
otherwise would be an Interest Reset Date for a Treasury Rate
Note, such Interest Reset Date will be the next following
Business Day. If no auction is held for a particular week, the
Interest Determination Date pertaining to the Interest Reset Date
occurring in that week will be the first Business Day of that
week.
Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date", if applicable, pertaining to
any Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date, or, if
<PAGE>
such day is not a Business Day, the next succeeding Business Day
or (ii) the Business Day immediately preceding the applicable
Interest Payment Date or the Stated Maturity, as the case may be.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest for each
Interest Reset Period at an interest rate calculated with
reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any, specified in such Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, the "Commercial Paper Rate" means, with respect to
any Interest Determination Date relating to a Commercial Paper
Rate Note (a "Commercial Paper Rate Determination Date"), the
Money Market Yield (as defined below) on such date of the rate
for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement, as such rate shall be published in
H.l5(519) under the heading "Commercial Paper". In the event
that such rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date, then the "Commercial Paper Rate"
for such Interest Reset Period will be the Money Market Yield as
of such Commercial Paper Rate Determination Date of the rate for
commercial paper of the specified Index Maturity as published in
Composite Quotations under the heading "Commercial Paper". If by
3:00 p.m., New York City time, on the Calculation Date such rate
is not yet published in either H.15 (519) or Composite
Quotations, then the "Commercial Paper Rate" for such Interest
Reset Period shall be the Money Market Yield of the arithmetic
mean of the offered rates, as of 11:00 a.m., New York City time,
on such Commercial Paper Rate Determination Date of three leading
dealers in commercial paper in The City of New York selected by
the Calculation Agent, in its discretion, for commercial paper of
the specified Index Maturity placed for an industrial issuer
whose bonds are rated "AA", or the equivalent, by a nationally
recognized rating agency; provided, however, that if the dealers
selected as aforesaid are not quoting offered rates described in
this sentence, the "Commercial Paper Rate" for such Interest
Reset Period will be deemed to be the same as the Commercial
Paper Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the Initial
Interest Rate).
"Money Market Yield" will be a yield calculated in
accordance with the following formula:
D x 360
Money Market Yield = ------------------ x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial
paper quoted on a bank discount basis and expressed as a decimal,
<PAGE>
and "M" refers to the actual number of days in the interest
period for which accrued interest is being calculated.
LIBOR Notes
Each LIBOR Note will bear interest for each Interest Reset
Period at an interest rate calculated with reference to LIBOR and
the Spread and/or Spread Multiplier, if any, specified in such
Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, "LIBOR" for each Interest Reset Period will be
determined by the Calculation Agent as follows:
(i) With respect to an Interest Determination Date
relating to a LIBOR Note (a "LIBOR Interest Determination
Date") LIBOR will be, as specified in the applicable Pricing
Supplement, either (a) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the arithmetic mean of
the offered rates for deposits in U.S. dollars for the
period of the Index Maturity specified in the applicable
Pricing Supplement (commencing on the Interest Reset Date),
which appear on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on such LIBOR Determination Date, if at
least two such offered rates appear on the Reuters Screen
LIBO Page ("LIBOR Reuters") or (b) if "LIBOR Telerate" is
specified in the applicable Pricing Supplement, the offered
rate for deposits in U.S. dollars having the Index Maturity
specified in the applicable Pricing Supplement that appears
on the Telerate Page 3750 as of 11:00 a.m. London time, on
that LIBOR Determination Date ("LIBOR Telerate"). "Reuters
Screen LIBO Page" means the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such
other page as may replace the LIBOR page on that service for
the purpose of displaying London interbank offered rates of
major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such
other page as may replace the 3750 page on that service or
such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying
London interbank offered rates for U.S. dollar deposits).
If neither LIBOR Reuters nor LIBOR Telerate is specified in
the applicable pricing supplement, LIBOR will be determined
as if LIBOR Telerate had been specified. In the case where
(a) above applies, if fewer than two offered rates appear on
the Reuters Screen LIBO Page, or, in the case where (b)
above applies, if no rate appears on the Telerate Page 3750,
as applicable, LIBOR with respect to that Interest Reset
Date will be determined as if the parties had specified the
rate described in (ii) below.
(ii) The Calculation Agent will request the
principal London office of each of four major banks in the
London interbank market selected by the Calculation Agent,
<PAGE>
in its discretion, to provide the Calculation Agent with its
offered quotations for deposits in U.S. dollars for the
period of the specified Index Maturity, commencing on the
Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on such
LIBOR Determination Date and in a principal amount equal to
an amount not less than $1,000,000 that is representative of
a single transaction in such market at such time. If at
least two such quotations are provided, "LIBOR" for such
Interest Reset Period will be the arithmetic mean of such
quotations. If fewer than two such quotations are provided,
"LIBOR" for such Interest Reset Period will be the
arithmetic mean of rates quoted by three major banks in the
City of New York selected by the Calculation Agent, in its
discretion, at approximately 11:00 a.m., New York City time,
on such LIBOR Determination Date for loans in U.S. dollars
to leading European banks, for the period of the specified
Index Maturity commencing on such Interest Reset Date, and
in a principal amount equal to an amount not less than
$1,000,000 that is representative of a single transaction in
such market at such time; provided, however, that if fewer
than three banks selected as aforesaid by the Calculation
Agent are quoting rates as described in this sentence,
"LIBOR" for such Interest Reset Period will be deemed to be
the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset
Period, the Initial Interest Rate).
Treasury Rate Notes
Each Treasury Rate Note will bear interest for each Interest
Reset Period at an interest rate calculated with reference to the
Treasury Rate and the Spread and/or Spread Multiplier, if any,
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, the "Treasury Rate" means, with respect to any
Interest Determination Date relating to a Treasury Note (a
"Treasury Rate Determination Date"), the rate for the auction
held on such Treasury Rate Determination Date of direct
obligations of the United States ("Treasury bills") having the
Index Maturity specified in the applicable Pricing Supplement, as
such rate shall be published in H.15(519) under the heading "U.S.
Government Securities-Treasury bills-auction average
(investment)" or, in the event that such rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date,
the auction average rate (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on
a daily basis) on such Treasury Rate Determination Date as
otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of
Treasury bills having the specified Index Maturity are not
published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such auction is
<PAGE>
held on such Treasury Rate Determination Date, then the "Treasury
Rate" for such Interest Reset Period will be calculated by the
Calculation Agent and will be a yield to maturity (expressed as a
bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 p.m.,
New York City time, on such Treasury Rate Determination Date, of
three leading primary United States Government securities dealers
selected by such Calculation Agent for the issue of Treasury
bills with a remaining maturity closest to the specified Index
Maturity: provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting bid rates as
described in this sentence, then the "Treasury Rate" for such
Interest Reset Period will be deemed to be the same as the
Treasury Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the Initial
Interest Rate).
CD Rate Notes
CD Rate Notes will bear interest at the rates (calculated
with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in such CD Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, "CD Rate" means, with respect to any Interest
Determination Date relating to a CD Rate Note (a "CD Rate
Interest Determination Date"), the rate on such date for
negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in
H.15(519) under the heading "CDs (Secondary Market)," or, if not
published by 3:00 p.m., New York City time, on the related
Calculation Date, the rate on such CD Rate Interest Determination
Date for negotiable certificates of deposit of the Index Maturity
specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit."
If such rate is not yet published in either H.15(519) or
Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the CD Rate on such CD Rate
Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank
dealers in negotiable United States dollar certificates of
deposit in The City of New York (which may include the Agent or
its affiliates) selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks
for negotiable certificates of deposit with a remaining maturity
closest to the Index Maturity designated in the applicable
Pricing Supplement in an amount that is representative for a
single transaction in that market at that time; provided,
however, that if the dealers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the CD Rate
<PAGE>
determined as of such CD Rate Interest Determination Date will be
the CD Rate in effect for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
CMT Rate Notes
CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any) specified in such CMT Rate Notes and any
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, "CMT Rate" means, with respect to any Interest
Determination Date relating to a CMT Rate Note (a "CMT Rate
Interest Determination Date"), the rate displayed on the
Designated CMT Telerate Page (as defined below) under the caption
"--- Treasury Constant Maturities --- Federal Reserve Board
Release H.15 --- Mondays Approximately 3:45 p.m.," under the
column for the Designated CMT Maturity Index (as defined below)
for (i) if the Designated CMT Telerate Page is 7055, the rate on
such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the
related CMT Rate Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or if
not published by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the CMT
Rate Interest Determination Date with respect to such Interest
Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated
CMT Telerate Page and published in the relevant H.15(519). If
such information is not provided by 3:00 p.m. New York City time,
on the related Calculation Date, then the CMT Rate for the CMT
Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 p.m., New York City time, on the CMT
Rate Interest Determination Date reported, according to their
written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The
City of New York (which may include the Agent or its affiliates)
selected by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the
<PAGE>
highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality,
one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of
not less than such Designated CMT Maturity Index minus one year.
If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination
Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 p.m., New York
City time, on the CMT Rate Interest Determination Date of three
Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest
to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an
amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then
the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such
quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are
quoting as described herein, the CMT Rate will be the CMT Rate in
effect for the immediately preceding Interest Reset Period (or,
if there was no such Interest Reset Period, the Initial Interest
Rate). If two Treasury Notes with an original maturity as
described in the third preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the
quotes for the Treasury Note with the shorter remaining term to
maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service on the page designated in the applicable
Pricing Supplement (or any other page as may replace such page on
that service for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519)), for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519).
If no such page is specified in the applicable Pricing
Supplement, the Designated CMT Telerate Page shall be 7052, for
the most recent week.
"Designated CMT Maturity Index" means the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7,
10, 20 or 30 years) specified in the applicable Pricing
Supplement with respect to which the CMT Rate will be calculated.
If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be 2 years.
<PAGE>
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the rates
(calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in such
Federal Funds Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any
Interest Determination Date relating to a Federal Funds Rate Note
(a "Federal Funds Rate Interest Determination Date"), the rate on
such date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not published by 3:00
p.m., New York City time, on the related Calculation Date, the
rate on such Federal Funds Rate Interest Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If by 3:00 p.m., New York City time, on
the related Calculation Date such rate is not published in either
H.15(519) or Composite Quotations, then the Federal Funds Rate on
such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic
mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of
federal funds transactions in The City of New York (which may
include the Agent or its affiliates) selected by the Calculation
Agent prior to 9:00 a.m., New York City time, on such Federal
Funds Rate Interest Determination Date; provided, however that if
the brokers so selected by the Calculation Agent are not quoting
as mentioned in this sentence, the Federal Funds Rate determined
as of such Federal Funds Rate Interest Determination Date will be
the Federal Funds Rate in effect for immediately preceding
Interest Reset Period (or, if there was no such Interest Reset
Period, the Initial Interest Rate).
Prime Rate Notes
Prime Rate Notes will bear interest at the rates (calculated
with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any) specified in such Prime Rate Notes and the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, "Prime Rate" means, with respect to any Interest
Determination Date relating to a Prime Rate Note (a "Prime Rate
Interest Determination Date"), the rate on such date published in
H.15(519) under the heading "Bank Prime Loan." If such rate is
not published prior to 3:00 p.m., New York City time, on the
related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by
each bank that appears on the Reuters Screen NYMF Page (as
defined below) as such bank's prime rate or base lending rate is
in effect for such Prime Rate Interest Determination Date. If
fewer than four such rates appear on the Reuters Screen NYMF Page
<PAGE>
for such Prime Rate Interest Determination Date, the Prime Rate
shall be the arithmetic mean of the prime rates quoted on the
basis of the actual number of days in the year divided by a 360-
day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks in The City
of New York selected by the Calculation Agent. If fewer than
four such quotations are provided, the Prime Rate will be
determined by the Calculation Agent on the basis of the rates
furnished in The City of New York by three substitute banks or
trust companies organized and doing business under the laws of
the United States, or any State thereof, each having total equity
capital of at least $500 million and being subject to supervision
or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies selected as
aforesaid are not quoting as mentioned in this sentence, the
Prime Rate determined as of such Prime Rate Interest
Determination Date will be the Prime Rate in effect for
immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the Initial Interest Rate).
"Reuters Screen, NYMF Page" means the display designated as
page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the
purpose of displaying prime rates or base lending rates of major
United States banks).
Redemption
The Pricing Supplement relating to each Note will indicate
either that such Note cannot be redeemed prior to Stated Maturity
or that such Note will be redeemable at the option of the Company
(subject to any refunding limitations described therein) in whole
or in part, on any date on or after the date designated as the
Initial Redemption Date in such Pricing Supplement, at prices
declining from a specified premium, if any, to par, together with
accrued interest to the date of redemption.
The Pricing Supplement relating to each Note will also
specify any sinking fund or other mandatory redemption provisions
applicable to such Note.
Notice of redemption shall be given by mail to Holders, not
less than 30 days nor more than 60 days prior to the date fixed
for redemption, all as provided in the Indenture. As provided in
the Indenture, notice of redemption at the election of the
Company may state that such redemption shall be conditional upon
the receipt by the Trustee of money sufficient to pay the
principal of and premium, if any, and interest on a Note on or
prior to the date fixed for such redemption; a notice of
redemption so conditioned shall be of no force or effect if such
money is not so received and, in such event, the company shall
not be required to redeem such Note.
<PAGE>
Repayment at the Option of the Holder
If so specified in the applicable Pricing Supplement, the
Notes will be repayable by the Company in whole or in part at the
option of the Holders thereof on the date or dates specified in
such Pricing Supplement (the "Optional Repayment Dates"). If no
Optional Repayment Date is specified with respect to a Note, such
Note will not be repayable at the option of the Holder thereof
prior to the date of Stated Maturity. Any repayment in part will
be in increments of $1,000 or the minimum denomination specified
in the applicable Pricing Supplement (provided that any remaining
principal amount thereof shall be at least $1,000 or such minimum
denomination). Unless otherwise specified in the applicable
Pricing Supplement, the repayment price for any Note to be repaid
means an amount equal to the sum of (i) 100% of the unpaid
principal amount thereof or the portion thereof plus (ii) accrued
interest to the date of repayment. For any Note to be repaid,
such Note must be received, together with the form thereon
entitled "Option to Elect Repayment" duly completed, by the
Trustee at its Corporate Trust Office (or such other address of
which the Company shall from time to time notify the Holders) not
more than 60 nor less than 30 days prior to the date of
repayment. Exercise of such repayment option by the Holder will
be irrevocable.
While the Book-Entry Notes are represented by the Global
Notes held by or on behalf of the Depositary, and registered in
the name of the Depositary or the Depositary's nominee, the
option for repayment may be exercised by the applicable
participant that has an account with the Depositary, on behalf of
the beneficial owners of the Global Note or Notes representing
such Book-Entry Notes, by delivering a written notice
substantially similar to the above mentioned form to the Trustee
at its Corporate Trust Office ( or such other address of which
the Company shall from time to time notify the Holders), not more
than 60 nor less than 30 days prior to the Optional Repayment
Date. Notices of elections from Participants on behalf of
beneficial owners of the Global Note or Notes representing such
Book-Entry Notes to exercise their option to have such Book-Entry
Notes repaid must be received by the Trustee by 5:00 p.m., New
York City time, on the last day for giving such notice. In order
to ensure that a notice is received by the Trustee on a
particular day, the beneficial owner of the Global Note or Notes
representing such Book-Entry Notes must so direct the applicable
Participant before such participant's deadline for accepting
instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers.
Accordingly, beneficial owners of the Global Note or Notes
representing Book-Entry Notes should consult the Participants
through which they own their interest therein for the respective
deadlines for such Participants. All notices shall be executed
by a duly authorized officer of such Participant (with signature
guaranteed) and shall be irrevocable. In addition, beneficial
owners of the Global Note or Notes representing Book-Entry Notes
<PAGE>
shall effect delivery at the time such notices of election are
given to the Depositary by causing the applicable Participant to
transfer such beneficial owner's interest in the Global Note or
Notes representing such Book-Entry Notes, on the Depositary's
records, to the Trustee. See "Book-Entry Notes".
If applicable, the Company will comply with the requirements
of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended, and any other securities laws or regulations in
connection with any such repayment.
The Company may at any time purchase Notes at any price or
prices in the open market or otherwise. Notes so purchased by the
Company may be held or resold or, at the discretion of the
Company, may be surrendered to the Trustee for cancellation.
Book-Entry Notes
Book-Entry Notes will be represented by one or more Global
Notes that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York ("DTC"), or such
other depositary as may be subsequently designated (the
"Depositary"), and registered in the name of the Depositary.
Upon issuance, all Fixed Rate Book-Entry Notes having the
same Original Issue Date, interest rate, redemption provisions,
repayment provisions and Stated Maturity will be represented by
one or more Global Notes, and all Floating Rate Book-Entry Notes
having the same Original Issue Date, Initial Interest Rate, Base
Rate, Interest Reset Period, Interest Reset Dates, Interest
Payment Dates, Index Maturity, Spread and/or Spread Multiplier,
if any, redemption provisions, repayment provisions, Minimum
Interest Rate, if any, Maximum Interest Rate, if any, and Stated
Maturity will be represented by one or more Global Notes. Book-
Entry Notes represented by a Global Note will not be exchangeable
for Certificated Notes and, except under the circumstances
described below, will not otherwise be issuable as Certificated
Notes.
So long as the Depositary, or its nominee, is the owner of a
Global Note, such Depositary or such nominee, as the case may be,
will be considered the sole holder of the individual Book-Entry
Notes represented by such Global Note for all purposes under the
Indenture. Payments of principal of and premium, if any, and any
interest on individual Book-Entry Notes represented by a Global
Note will be made to the Depositary or its nominee, as the case
may be, as the Holder of such Global Note. Except as set forth
below, owners of beneficial interests in a Global Note will not
be entitled to have any of the individual Book-Entry Notes
represented by such Global Note registered in their names, will
not receive or be entitled to receive physical delivery of any
such Book-Entry Notes and will not be considered the Holders
thereof under the Indenture, including, without limitation, for
<PAGE>
purposes of consenting to any amendment or supplement to the
Indenture.
If the Depositary is at any time unwilling or unable to
continue as depositary and a successor depositary is not
appointed, the Company will issue individual Certificated Notes
in exchange for the Global Note or Notes representing the
corresponding Book-Entry Notes. In addition, the Company may at
any time and in its sole discretion determine not to have any
particular Book-Entry Notes represented by one or more Global
Notes and, in such event, will issue individual Certificated
Notes in exchange for the Global Notes representing such Book-
Entry Notes. In any such instance, an owner of a Book-Entry Note
represented by a Global Note will be entitled to physical
delivery of individual Certificated Notes equal in principal
amount to such Book-Entry Note and to have such Certificated
Notes registered in its name. Individual Certificated Notes so
issued will be issued as registered Notes in denominations,
unless otherwise specified by the Company, of $1,000 and integral
multiples thereof.
The following is based solely upon information furnished by
DTC:
1. DTC will act as securities depositary for the Global
Notes. The Global Notes will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Global Note will be
issued for each issue of the Notes having the same issue date and
terms, each in the aggregate principal amount of such issue, and
will be deposited with DTC.
2. 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 Board, 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. 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
("Direct Participants") include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other
organizations. 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
<PAGE>
or indirectly ("Indirect Participants"). The rules applicable to
DTC and its Participants are on file with the Securities and
Exchange Commission.
3. Purchases of Notes under the DTC system must be made by
or through Direct Participants, which will receive a credit for
the Notes on DTC's records. The ownership interest of each
actual purchaser of each Note ("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 purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the
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 Notes, except in the event that use of the book-
entry system for the Notes is discontinued.
4. To facilitate subsequent transfers, all Global Notes
deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Global
Notes with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership of the Notes. DTC has
no knowledge of the actual Beneficial Owners of the Notes; DTC's
records reflect only the identity of the Direct Participants to
whose accounts such notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible
for keeping account of their holding on behalf of their
customers.
5. 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.
6. Redemption notices shall be sent to Cede & Co. If less
than all of the Notes within an issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. will consent or vote with
respect to the Notes. Under its usual procedures, DTC mails 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
Notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
<PAGE>
8. Principal and interest payments on the Notes will be
made to DTC. DTC's practice is to credit Direct Participants'
accounts on the date on which interest is payable in accordance
with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on such
date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as in
the case of securities held for the accounts of customers in
bearer form or registered in "street name", and will be the
responsibility of such participant and not of DTC, the Agents or
the Company, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal and
interest to DTC is the responsibility of the Trustee.
Disbursement of such payments to Direct Participants shall be the
responsibility of DTC and disbursement of such payment to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
9. DTC may discontinue providing its services as
securities depositary with respect to the Notes at any time by
giving reasonable notice to the Company and the Trustee. Under
such circumstances, in the event that a successor securities
depositary is not obtained, Notes in certificated form are
required to be printed and delivered.
10. The Company may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities
depositary). In that event, Notes in certificated form will be
printed and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources (including DTC)
that the Company believes to be reliable, but the Company takes
no responsibility for the accuracy thereof.
NONE OF THE COMPANY, THE TRUSTEE, THE AGENTS OR ANY AGENT
FOR PAYMENT ON OR REGISTRATION OF TRANSFER OR EXCHANGE OF SUCH
NOTES WILL HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF
THE RECORDS RELATING TO OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL
INTERESTS IN ANY GLOBAL NOTE OR FOR MAINTAINING, SUPERVISING OR
REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL INTERESTS.
SUPPLEMENTAL PLAN OF DISTRlBUTlON
Subject to the terms and conditions set forth in the
Distribution Agreement with respect to the Notes (the
"Distribution Agreement"), the Notes will be offered on a
continuing basis by the Company through Goldman, Sachs & Co. and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Agents") who have agreed to use reasonable
efforts to solicit purchases of the Notes. The Company has
reserved the right to appoint other agents, dealers or
underwriters as Agents under the Distribution Agreement or as
<PAGE>
Agents with respect to a particular issuance of Notes. Any such
additional Agents will enjoy all the rights and benefits, and be
subject to all of the obligations, of an Agent as set forth in
the Distribution Agreement.
The Company will have the sole right to accept offers to
purchase Notes and may reject any proposed purchase of Notes in
whole or in part. The Agents shall have the right, in their
discretion reasonably exercised, to reject any offer to purchase
Notes, in whole or in part. The Company will pay the Agents a
commission of from 0.125% to 0.875% of the principal amount of
Notes, depending upon maturity, for sales made through them as
Agents.
The Company may also sell Notes to the Agents as principals
for their own accounts at a discount to be agreed upon at the
time of sale, or the purchasing Agents may receive from the
Company a commission or discount equivalent to that set forth on
the cover page hereof in the case of any such principal
transaction in which no other discount is agreed upon. Such
Notes may be resold to investors and other purchasers at varying
prices related to prevailing market prices at the time of such
resale, as determined by the Agents or, if so agreed, at a fixed
public offering price. The Company reserves the right to sell
Notes directly on its own behalf. No commission will be payable
on any Notes sold directly by the Company.
In addition, the Agents may offer the Notes they have
purchased as principal to other dealers. The Agents may sell
Notes to any dealer at a discount and, unless otherwise specified
in the applicable Pricing Supplement, such discount allowed to
any dealer may include all or part of the discount to be received
from the Company. Unless otherwise indicated in the applicable
Pricing Supplement, any Note sold to an Agent as principal will
be purchased by such Agent at a price equal to 100% of the
principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical
maturity. After the initial public offering of Notes to be
resold to investors and other purchasers, the public offering
price (in the case of Notes to be resold at a fixed public
offering price), concession and discount may be changed.
The Agents, as agents or principals, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933
(the "Act"). The Company has agreed to indemnify the Agents
against certain liabilities, including liabilities under the Act.
The Company has agreed to reimburse the Agents for certain
expenses.
The Agents may sell to or through dealers who may resell to
investors, and the Agents may pay all or part of their discount
or commission to such dealers. Such dealers may be deemed to be
"underwriters' within the meaning of the Act.
<PAGE>
Unless otherwise indicated in the applicable Pricing
Supplement, payment of the purchase price of Notes will be
required to be made in immediately available funds in The City of
New York.
Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and other Agents, if any, may
be customers of, engage in transactions with, and perform
services for the Company in the ordinary course of business.
The Notes are a new issue of securities with no established
trading market and will not be listed on any securities exchange.
No assurance can be given as to the existence or liquidity of the
secondary market for the Notes.
<PAGE>
$90,000,000
INDIANA GAS COMPANY, INC.
Debt Securities
____________________
Indiana Gas Company, Inc. (the "Company") intends from time
to time to issue up to $90,000,000 aggregate principal amount of
its Debt Securities (the "Debt Securities") consisting of
unsecured debentures, notes or other evidences of indebtedness,
in one or more series, on terms to be determined at the time or
times of sale. For each offering of Debt Securities for which
this Prospectus is being delivered, there will be an accompanying
Prospectus Supplement (the "Prospectus Supplement") that sets
forth the title, aggregate principal amount, maturity, rate or
rates and times of payment of interest, any terms for redemption
at the option of the Company or the holders, any terms for
sinking fund payments, any listing on a national securities
exchange and the initial public offering price and any other
terms in connection with the offering and sale of such Debt
Securities.
The Debt Securities may be sold directly by the Company or
through agents designated from time to time or through
underwriters or dealers, which may include Goldman, Sachs & Co.
or which may be a group of underwriters represented by Goldman,
Sachs & Co. or other firms. If any agents of the Company or any
underwriters are involved in any sale of the Debt Securities in
respect of which this Prospectus is being delivered, the names of
such agents or underwriters, the principal amount, if any, to be
purchased by the underwriters and the compensation, if any, of
such underwriters or agents will be set forth in the Prospectus
Supplement.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
____________________
The date of this Prospectus is April 5, 1995.
<PAGE>
AVAILABLE INFORMATION
Indiana Gas Company, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities
and Exchange Commission (the "SEC"). Such material may be
inspected and copied at the public reference facilities
maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices located
at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and Seven World Trade Center,
Suite 1300, New York, New York 10048; and copies of such material
can also be obtained at prescribed rates from the Public
Reference Section of the SEC at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Company has filed with the SEC a registration statement
on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities
Act of 1933, as amended (the "Act"). This Prospectus does not
contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. For further information,
reference is hereby made to the Registration Statement.
___________________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the SEC
pursuant to the Exchange Act are incorporated by reference into
this Prospectus:
(a) The Company's Annual Report on Form 10-K for the year
ended September 30, 1994.
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994.
(c) The Company's Report on Form 8-K dated April 5, 1995.
All documents filed by the Company pursuant to Sections 13,
14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the
Debt Securities offered hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
<PAGE>
The Company will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus
is delivered, upon the written or oral request of such person, a
copy of any or all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents unless specifically
incorporated by reference into such documents. Requests for such
copies should be directed to Vice President and Treasurer,
Indiana Gas Company, Inc., 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496, telephone (317) 926-3351.
___________________
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
<PAGE>
PROSPECTUS SUMMARY
The following summary information is qualified in its
entirety by the detailed information and financial statements
appearing in this Prospectus or in the documents incorporated
herein by reference.
Indiana Gas Company, Inc.
Business . . . . . . . . . . . . Gas utility company providing
natural gas sales and
transportation services.
Service Area . . . . . . . . . . As of September 30, 1994, the
Company supplied gas to
approximately 442,000
customers in 281 communities
in 48 of Indiana's 92
counties.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The selected consolidated financial information of the
Company set forth below has been derived from and should be read
in conjunction with the consolidated financial statements and
other financial information which is incorporated by reference
herein.
<TABLE>
<CAPTION>
12 Months Ended Fiscal Years Ended September 30
December 31, 1994 1994 1993 1992 1991 1990(1)
(unaudited) (in thousands, except ratios)
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues $436,467 $475,297 $499,278 $411,260 $389,550 $353,078
Operating Income 43,542 47,843 44,273 38,127 35,616 31,495
Net Income 30,219 34,596 28,534 25,743 23,286 22,257
Earnings Available For
Common Stock 30,219 $ 34,596 $ 28,249 $ 24,033 $ 21,576 $ 20,547
Ratio of Earnings to
Fixed Charges (2)
Actual 3.7 4.1 3.5 3.5 3.3x 3.8x
December 31, 1994
Actual Percent
(unaudited)
Capitalization:
Long Term Debt $153,815 37%
Common Stock Equity 265,074 63%
<PAGE>
--------- ---
Total Capitalization 418,889 100%
<FN>
(1) Includes consolidation of Richmond Gas Corporation and Terre
Haute Gas Corporation beginning August 1990.
(2) For the purpose of computing the ratio of earnings to fixed
charges, (i) earnings consist of net income to which have
been added income taxes, investment tax credits and fixed
charges and (ii) fixed charges include interest charges,
amortization of debt discount and expense, and the estimated
interest component of rents.
</TABLE>
THE COMPANY
The Company is an operating public utility engaged in the
business of providing gas utility service in the State of
Indiana. The Company was incorporated under the laws of the
State of Indiana on July 16, 1945. All of the outstanding shares
of Common Stock of the Company are owned by Indiana Energy, Inc.,
which is a public holding company.
At September 30, 1994, the Company supplied gas to
approximately 442,000 customers in 281 communities in 48 of the
92 counties in the State of Indiana. The Company's service area
has a population of approximately 2 million and contains
diversified manufacturing and agricultural-related enterprises.
The principal industries served include automotive parts and
accessories, feed, flour and grain processing, metal castings,
aluminum products, gypsum products, electrical equipment, metal
specialties and glass. The largest communities served include
Muncie, Anderson, Lafayette-West Lafayette, Bloomington, Terre
Haute, Marion, New Albany, Columbus, Jeffersonville, New Castle
and Richmond. The Company does not provide gas service in
Indianapolis although its general office is located in that city.
The address of the general office of the Company is 1630
North Meridian Street, Indianapolis, Indiana 46202. Its
telephone number is 317-926-3351.
USE OF PROCEEDS
The Company may use a portion of the net proceeds from the
sale of the Debt Securities offered hereby to refinance certain
series of its long-term debt or its preferred stock (depending
upon interest rates, market prices and other factors). The net
proceeds from the sale of Debt Securities not used to refinance
<PAGE>
such existing indebtedness or capital will be applied to finance,
in part, the Company's continuing construction program, for the
payment of obligations incurred in connection with such
refinancing or such construction expenditures, and for other
corporate purposes.
Construction expenditures for the fiscal year 1994 were
approximately $57,000,000 and the Company expects that
approximately $55,000,000 will be expended in fiscal year 1995
and approximately $57,000,000 will be expended in fiscal year
1996. In 1994, 75% of the Company's capital expenditures was
provided by funds generated internally. In 1993, 62% of capital
expenditures was provided by funds generated internally. The
1993 percentage was lower than budget as a result of completing
significant upgrades to the gas distribution system to allow for
greater operating flexibility in the FERC Order 636 environment.
DESCRIPTION OF THE DEBT SECURITIES
General
The Debt Securities will be issued under the Indenture dated
as of February 1, 1991, between the Company and Bank of America
Illinois (successor to Continental Bank, National Association),
as Trustee (the "Trustee"), as supplemented and modified by
indentures supplemental thereto (the "Indenture"), a copy of
which is filed as an exhibit to the Registration Statement.
The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all of the
provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections or defined terms of
the Indenture are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated
herein or therein by reference.
The Indenture provides that, in addition to the Debt
Securities offered hereby, additional debt securities (including
both interest bearing and original issue discount securities) may
be issued thereunder, without limitation as to the aggregate
principal amount. The Indenture does not limit the amount of
other debt, secured or unsecured, which may be issued by the
Company. The Debt Securities are unsecured and rank equally with
the Company's other unsecured indebtedness. Substantially all
property of the Company is subject to the lien of a certain First
<PAGE>
Mortgage Indenture dated as of September 1, 1950, as supplemented
and amended by twelve supplemental indentures, between the
Company and National City Bank, Indiana (formerly, Merchants
National Bank & Trust Company of Indianapolis), as Trustee (the
"First Mortgage Indenture"). The First Mortgage Indenture
constitutes a direct first mortgage lien upon substantially all
the property now owned by the Company, subject only to "permitted
liens." The First Mortgage Indenture contains provisions
subjecting after-acquired property to the lien thereof (except in
certain cases in the event of consolidation, merger, sale or
lease of the mortgaged property), subject, however, to permitted
liens and to liens existing or placed thereon at the time of
acquisition by the Company. Further, there are certain
restrictions on the Company's acquisition of property subject to
liens equal or prior to the lien of the First Mortgage Indenture.
As of February 28, 1995, the aggregate principal amount of bonds
outstanding under the First Mortgage Indenture was $18,950,000.
Unless otherwise indicated in the Prospectus Supplement, the
Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any multiple
thereof, will be registered for transfer and exchange, and
principal and interest, if any, will be payable at the Corporate
Trust Offices of the Trustee in Chicago, Illinois and New York,
New York. No service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other government
charge payable in connection therewith.
The applicable Prospectus Supplement or Prospectus
Supplements will describe the following terms of the series of
Debt Securities ("Offered Securities") in respect of which the
same is being delivered: (1) the title of the Offered Securities;
(2) any limit on the aggregate principal amount of the Offered
Securities; (3) the date or dates on which the principal of the
Offered Securities will be payable; (4) the rate or rates at
which the Offered Securities will bear interest, if any, and the
date or dates from which any such interest will accrue; (5) the
Interest Payment Dates on which any such interest on the Offered
Securities will be payable and the Regular Record Date for any
interest payable on any Offered Securities; (6) the place or
places where the principal of (and premium, if any) and interest,
if any, on Offered Securities will be payable, any Offered
Securities may be surrendered for registration or transfer, and
Offered Securities may be surrendered for exchange; (7) the
period or periods within which, the price or prices at which, and
the terms and conditions upon which, the Offered Securities may
be redeemed or purchased, in whole or in part; (8) any mandatory
or optional sinking fund or analogous provisions; (9) the
denominations in which any Offered Securities will be issuable if
other than denominations of $1,000 and any integral multiple
thereof; (10) the currency or currencies of payment of principal
of (and premium, if any) and interest on the Offered Securities
<PAGE>
will be payable (if other than U.S. dollars); (11) the amount of
payments of principal of (and premium, if any) or interest on the
Offered Securities may be determined with reference to an index,
the manner in which such amounts will be determined; (12) if
other than the full principal amount thereof, the portion of the
principal amount of Offered Securities which will be payable upon
declaration of acceleration of Maturity; (13) any additional
Events of Default or covenants of the Company pertaining to the
Offered Securities; and (14) any other terms of the Offered
Securities. Any such Prospectus Supplement will also describe
any special provisions for the payment of additional amounts with
respect to the Offered Securities.
Limitations on Liens
The Company has agreed that, so long as any of the Debt
Securities are outstanding, it will not create or suffer to be
created or to exist any mortgage on, pledge of, or other lien on
or security interest in ("Lien"), any property of the Company now
owned or hereafter acquired, securing any indebtedness for money
borrowed ("Debt"), without first offering to the Holder of each
Debt Security an undertaking by the Company to make effective
provision whereby such Debt Security shall be equally and ratably
secured with any and all such indebtedness and with any other
indebtedness similarly entitled to be equally and ratably secured
(which offer may only be accepted by any Holder in writing
delivered to the Company on or prior to the 30th day following
the date of the Company's notice) and in accordance with such
provisions as are acceptable to the Trustee. However, these
restrictions on Liens do not apply to nor prevent the creation or
existence of: (i) certain governmental and similar Liens, pledges
and deposits described in the Indenture; leases made, or existing
on property acquired, in the ordinary course of business
(including leases made in sale and lease-back transactions); and
zoning restrictions, easements, licenses or restrictions on the
use of real property or minor irregularities in the title
thereto, which do not, in the opinion of the Company, materially
impair the use of such property in the operation of the business
of the Company or the value of such property for the purpose of
such business; (ii) Liens on any property acquired, constructed
or improved by the Company after the date of the Indenture which
are created or assumed contemporaneously with, or within 120 days
after, such acquisition or completion of such construction or
improvement, or within six months thereafter pursuant to a firm
commitment for financing arranged with a lender or investor
within such 120-day period, to secure or provide for the payment
of all or any part of the purchase price of such property or the
cost of such construction or improvement incurred after the date
of the Indenture, or, in addition to Liens contemplated by clause
(iii) below, Liens on any property existing at the time of
acquisition thereof, so long as the Liens do not apply to any
property theretofore owned by the Company other than, in the case
of any such construction or improvement, any theretofore
unimproved real property on which the property so constructed or
<PAGE>
the improvement is located; (iii) existing Liens on any property
or indebtedness of a corporation which is merged with or into or
consolidated with the Company; (iv) Liens in favor of the United
States of America, any State, or any department, agency or
instrumentality or political subdivision of any such
jurisdiction, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any
indebtedness incurred for the purpose of financing all or any
part of the purchase price of the cost of constructing or
improving the property subject to such Liens, including, without
limitation, Liens to secure Debt of the pollution control or
industrial revenue bond type; (v) Liens to secure loans to the
Company maturing within 12 months from the creation thereof and
made in the ordinary course of business; (vi) Liens on any
property (including any natural gas, oil or other mineral
property) to secure all or part of the cost of exploration,
drilling or development thereof or to secure Debt incurred to
provide funds for any such purpose; (vii) Lien of the First
Mortgage Indenture to secure Debt outstanding on January 15,
1991, and other Liens existing on the date of the Indenture; and
(viii) Liens for the sole purpose of extending, renewing or
replacing in whole or in part Debt secured by any Lien referred
to in clauses (i) through (vii) or this clause (viii), so long as
the principal amount of Debt secured thereby does not exceed the
principal amount of Debt so secured at the time of such
extension, renewal or replacement, and that such extension,
renewal or replacement is limited to all or a part of the
property or indebtedness which secured the Lien so extended,
renewed or replaced (plus improvements on such property), and so
long as the Company does not issue any Debt (whether by way of
refunding or otherwise) after January 15, 1991 secured under the
First Mortgage Indenture unless the Company makes the offer
referenced above of an undertaking to make effective provision to
secure equally and ratably the Debt Securities with any and all
such indebtedness and with any other unsecured indebtedness
similarly entitled to be equally and ratably secured by the
issuance of New Secured Instruments of the Company in exchange
for the Debt Securities.
Events of Default
The following constitute Events of Default under the
Indenture with respect to Debt Securities of any series: (1)
default in the payment of principal of (or premium, if any, on)
any Debt Security when due and the continuation of such default
for a period of three Business Days thereafter; (2) default in
the payment of interest on any Debt Security when due and the
continuation thereof for a period of 30 days; (3) default in the
payment of any sinking fund payment when due by the terms of the
Debt Securities of that series and the continuation of such
default for a period of three Business Days thereafter; (4)
default in the performance or breach of any covenant or warranty
of the Company in the Indenture (other than a covenant or
warranty included in the Indenture solely for the benefit of one
<PAGE>
or more series of Debt Securities other than such series), and
the continuation thereof for 60 days after written notice to the
Company as provided in the Indenture; (5) default in the payment
of principal, premium, if any, or interest on (after any
applicable period of grace), or acceleration of, indebtedness
evidenced by any other series issued under the Indenture or any
other mortgage, indenture or instrument, or other evidence of
indebtedness of the Company for borrowed money, in an aggregate
amount exceeding $10,000,000, which default is not rescinded or
annulled, or indebtedness not discharged, within 90 days after
written notice to the Company as provided in the Indenture; (6)
certain events of bankruptcy, insolvency or reorganization; and
(7) any other Event of Default provided with respect to Debt
Securities of a particular series.
If an Event of Default with respect to the Debt Securities
occurs and is continuing, either the Trustee or the Holders of
33% in aggregate principal amount of the outstanding Debt
Securities may declare the principal amount of all Debt
Securities to be due and payable immediately. At any time after
the declaration of acceleration with respect to the Debt
Securities has been made, but before a judgment or decree based
on acceleration has been obtained, the Holders of a majority in
principal amount of the outstanding Debt Securities may, under
certain circumstances, rescind and annul such acceleration.
The Indenture provides that, subject to the duty of the
Trustee during default to act with the required standard of care,
the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee, the Holders of a majority in
principal amount of the outstanding Debt Securities will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the
Debt Securities. The right of a Holder of any Debt Security to
institute a proceeding with respect to the Indenture is subject
to certain conditions precedent, but each Holder has an absolute
right to receive payment of principal, premium, if any, and
interest when due and to institute suit for the enforcement of
any such payment. The Indenture provides that the Trustee, within
90 days after the occurrence of a default with respect to the
Debt Securities, is required to give the Holders of the Debt
Securities notice of such default, unless cured or waived;
provided that, except in the case of default in the payment of
principal or of interest on any Debt Security, the Trustee may
withhold such notice if it determines it is in the interest of
such Holders to do so and the Trustee must withhold such notice
for 45 days in the event of a default described in clause 4 of
the second preceding paragraph.
<PAGE>
The Company is required to furnish annually to the Trustee a
statement as to the performance by the Company of certain of its
obligations under the Indenture and as to any default in such
performance.
Other than the restrictions on the Issuance of additional
secured Debt described above, there are no provisions of the
Indenture which afford Holders of the Debt Securities protection
in the event of a highly leveraged transaction involving the
Company. However, such a transaction would require regulatory
approval and management of the Company believes that such
approval would be unlikely in a highly leveraged context.
Consolidation, Merger, Sale or Conveyance
The Indenture provides that the Company may, without the
consent of the holders of the Debt Securities, consolidate with,
or convey, transfer or lease its property and assets
substantially as an entity to another corporation, only if in any
such case (i) if the Company is not the continuing corporation,
the successor corporation shall assume by a supplemental
indenture the Company's obligations under the Indenture and (ii)
immediately after giving effect to such transaction, no Event of
Default, and no event which after notice or lapse of time would
become an Event of Default, shall have occurred and be
continuing.
Modification of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in principal amount (calculated as provided in the
Indenture) of the Outstanding Securities, if all series of
Outstanding Securities are affected, or the Holders of a majority
in aggregate principal amount of each series affected by such
modification, in case one or more, but less than all, of the
series of Outstanding Securities are affected, to modify the
Indenture or any supplemental indenture or the rights of the
Holders of the Debt Securities of any series; provided that no
such modification shall, without the consent of the Holders of
each Debt Security affected thereby, change the maturity of any
Debt Security, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or
reduce any amount payable upon redemption of any Debt Security,
or reduce the overdue rate thereof or change the currency of
payment of principal or interest on any Debt Security or reduce
the above stated percentage in principal amount of Outstanding
Securities the consent of the Holders of which is required for
modification or amendment of the Indenture or for waiver of
certain defaults, or change any obligation of the Company to
maintain an office or agency in each Place of Payment.
The Indenture also permits the Company and the Trustee to
amend the Indenture in certain circumstances without the consent
<PAGE>
of the Holders of any Debt Securities to evidence the merger of
the Company or the replacement of the Trustee and for certain
other purposes.
EXPERTS
The audited financial statements and schedules incorporated
by reference into this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports
included or incorporated by reference herein, and are
incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
The statements as to matters of law and legal conclusions
under the caption "Description of the Debt Securities" have been
reviewed by Barnes & Thornburg, counsel for the Company, and are
made on the authority of said firm.
LEGAL OPINIONS
The validity of the Debt Securities will be passed upon for
the Company by Barnes & Thornburg, 1313 Merchants Bank Building,
11 South Meridian Street, Indianapolis, Indiana 46204, counsel
for the Company, and for the Underwriters by Reid & Priest, 40
West 57th Street, New York, New York 10019, which will rely on
Barnes & Thornburg as to matters of Indiana law. Howard J.
Cofield, a director of the Company and its parent, Indiana
Energy, is of counsel with Barnes & Thornburg. Attorneys in such
firm own beneficially in the aggregate approximately 36,106
shares of the Common Stock of Indiana Energy.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities to or through
underwriters, and also may sell the Debt Securities directly to
other purchasers or through dealers or agents. Such underwriters
may include Goldman, Sachs & Co. and/or a group of underwriters
represented by firms including Goldman, Sachs & Co. Goldman,
Sachs & Co. may also act as agents.
The distribution of the Debt Securities may be effected from
time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at
<PAGE>
the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
In connection with the sale of the Debt Securities,
underwriters may receive compensation from the Company or from
purchasers of the Debt Securities for whom they may act as agents
in the form of discounts, concessions or commissions.
Underwriters may sell the Debt Securities to or through dealers,
and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the
distribution of the Debt Securities may be deemed to be
underwriters, and any discounts or commissions received by them
from the Company and any profit on the resale of the Debt
Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such underwriter, dealer or agent
will be identified, and any such compensation received from the
Company will be described, in a Prospectus Supplement.
Under agreements which may be entered into by the Company,
underwriters, dealers and agents who participate in the
distribution of the Debt Securities may be entitled to
indemnification by the Company against certain liabilities,
including liabilities under the Act, or to contribution from the
Company with respect to payments which the underwriters, dealers
or agents may be required to make in respect thereof.
If so indicated in a Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's
agents to solicit offers by certain institutions to purchase the
Debt Securities from the Company pursuant to contracts providing
for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all
cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Offered
Securities shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject.
The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such
contracts.
<PAGE>
No person has been authorized to give any information or to
make any representations other than those contained in this
Prospectus Supplement or the Prospectus and, if given or made,
such information or representations must not be relied upon as
having been authorized. This Prospectus Supplement and the
Prospectus do not constitute an offer to sell or the solicitation
of an offer to buy any securities other than the securities
described in this Prospectus Supplement or an offer to sell or
the solicitation of an offer to buy such securities in any
circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus Supplement or the
Prospectus nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or
that the information contained herein or therein is correct as of
any time subsequent to the date of such information.
TABLE OF CONTENTS
Prospectus Supplement
Page
Use of Proceeds........................ S-2
Supplemental Description of the Notes . S-2
Supplemental Plan of Distribution .....S-15
Prospectus
Available Information ...........................2
Incorporation of Certain Documents
by Reference ..................................2
Prospectus Summary .............................3
Selected Consolidated Financial Information ...3
The Company ....................................3
Use of Proceeds .................................4
Description of the Debt Securities ..............4
Experts ........................................8
Legal Opinions ..................................8
Plan of Distribution ............................8
<PAGE>
$55,000,000
INDIANA GAS COMPANY, INC.
Medium-Term Notes, Series E,
Due Not Less Than 9 Months
From Date of Issue
LOGO
PROSPECTUS SUPPLEMENT
Goldman, Sachs & Co.
Merrill Lynch & Co.
