File No. 70-8343
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM U-1
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
KINGSPORT POWER COMPANY
422 Broad Street, Kingsport, Tennessee 37660
(Name of company filing this statement and
address of principal executive office)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
G. P. Maloney, Executive Vice President
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
A. Joseph Dowd, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
The undersigned Kingsport Power Company ("Kingsport") hereby
amends its Application or Declaration on Form U-1 in File No. 70-
8343 as follows:
1. By restating the third paragraph of Item 1. Description
of Proposed Transaction as follows:
"The Proposed Term Loan Agreement would provide that
the Notes bear interest at a fixed rate. The actual rate
of interest which each Note shall bear shall be subject
to further negotiation between Kingsport and the lender.
Any fixed rate of interest of the Notes will not be
greater than 250 basis points above the yield at the time
of issuance of the Notes to maturity of United States
Treasury obligations that mature on or about the date of
maturity of the Notes."
2. By supplying the following exhibit:
Exhibit D-1 Copy of Application to Tennessee Public
Service Commission
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
statement to be signed on its behalf by the undersigned thereunto
duly authorized.
KINGSPORT POWER COMPANY
By /s/ G. P. Maloney
Vice President
Dated: April 19, 1994
kgpt.94\70-8343.#2
Exhibit D-1
Before the
TENNESSEE PUBLIC SERVICE COMMISSION
_____________________________________________
:
In the Matter of the Application :
:
of :
: Docket No.
KINGSPORT POWER COMPANY :
:
For Permission to Make Notes to Evidence :
Indebtedness Not to Exceed $5,000,000 :
_____________________________________________:
TO THE HONORABLE PUBLIC SERVICE COMMISSION OF THE STATE OF
TENNESSEE:
Comes the Petitioner, Kingsport Power Company (hereinafter
called "Kingsport"), and presents this Application for the
following purposes:
Kingsport seeks approval from this Commission to
issue up to $5,000,000 of its unsecured long-term
indebtedness from time to time through June 30, 1995.
The proceeds will be used to reduce the short-term
unsecured indebtedness of the Company. Short-term
indebtedness of the Company was $6,225,000 at September
30, 1993. The proposed financing will bear interest at
a fixed rate, a fluctuating rate or some combination of
fixed and fluctuating rates. In order to obtain a
favorable rate of interest, however, it is generally
necessary to be able to commit to the financing within 24
hours from the time that funds become available.
Therefore, this Application seeks approval of the
financing within the ranges of maturities and interest
specified herein without the need for a separate hearing
on the final commitment.
In support of this Application, Kingsport respectfully submits
the following:
ONE. It is a corporation duly organized and existing under
the laws of Virginia, and qualified to transact business in the
State of Tennessee and with its principal office in the City of
Kingsport. A true copy of its Articles of Association has been
filed in proceedings before the Commission, Docket No. 2894.
TWO. Kingsport proposes, subject to receipt of appropriate
authorization from the Commission and the Securities and Exchange
Commission ("SEC"), to pay up to $5,000,000 of short-term unsecured
indebtedness, with proceeds of new borrowings to be evidenced by
the unsecured promissory note or notes of Kingsport bearing
interest at a fixed rate, a fluctuating rate or some combination of
fixed and fluctuating rates. Accordingly, Kingsport proposes to
issue from time to time through June 30, 1995 up to $5,000,000
principal amount of its unsecured promissory note or notes (the
"Notes") to one or more commercial banks, financial institutions or
other institutional investors pursuant to one or more term loan
agreements (the "Proposed Agreement") with terms similar to those
contained in the preliminary draft attached hereto as Exhibit A,
with appropriate insertions and deletions.
THREE. Kingsport has been advised that funds for long-term
unsecured note borrowings of the magnitude proposed herein are
generally available for not more than 24 hours, which is inadequate
time to request a special Order from this Commission approving that
loan. Consequently, Kingsport is requesting an Order of this
Commission approving the proposed financing in all respects such
that, upon receipt of such Order, Kingsport may unconditionally,
and without further Order of this Commission, enter into a
definitive agreement with a bank or banks, in the form of the
Proposed Agreement and subject to the conditions, restrictions and
limitations specified herein.
FOUR. The Proposed Agreement does not represent a definitive
form of agreement with any bank and would provide that the Notes
bear interest at either a fixed rate, fluctuating rate or some
combination of fixed and fluctuating rates. Kingsport believes
that it would be beneficial to commit itself to a long-term
obligation. The actual rate of interest which each Note shall
bear, and the maturity thereof, shall be subject to further
negotiation between Kingsport and the lender.
Any fixed rate of interest of the Notes will not, at the time
of issuance of the Notes, be greater than 250 basis points above
the yield to maturity of United States Treasury obligations that
mature on or about the date of maturity of the Notes. Any
fluctuating rate will not be greater than 200 basis points above
the rate of interest announced publicly by the lending bank from
time to time as its base or prime rate.
No compensating balances shall be maintained with, or fees in
the form of substitute interest paid to, a lender under the
Proposed Agreement. However, in the event a bank or financial
institution arranges for a borrowing from a third party, such
institution may charge Kingsport a placement fee, not to exceed
0.875% of the principal amount of such borrowing.
A lender may desire to assign, or to sell participations in,
all or any part of the Proposed Agreement and the Notes thereunder
to other entities. Such assignee would have the same rights and
benefits under the Proposed Agreement as the lender. Such
participant would not have any rights under the Proposed Agreement,
but would have rights against the lender in respect of the
agreement between the participant and the lender.
The Proposed Agreement specifies that, in the event a Note
bearing interest at a fixed rate is paid prior to maturity in whole
or in part, Kingsport shall pay to the lender a fee equal to the
present value of the amount by which the sum of the quarterly
interest payments on that part of the principal amount of the loan
prepaid, calculated at the fixed rate, exceeds the sum of the
interest payments on the principal amount of the loan prepaid,
calculated at a rate per annum equal to a moving average on yields
to maturity of United States Treasury Notes trading closest to par
value and maturing on, or within three months of, the maturity date
of the Note.
The Proposed Agreement may contain restrictive covenants which
would prohibit Kingsport from: (i) creating, incurring, assuming
or suffering to exist any liens on its property, with certain
stated exceptions; (ii) creating or incurring any indebtedness for
borrowed money, except as specified therein; (iii) entering into
certain mergers, consolidations and dispositions of assets; and
(iv) permitting certain events to occur in connection with its
pension plans.
A borrowing by Kingsport from a bank under the Proposed
Agreement will be evidenced by one or more Notes of Kingsport,
substantially in the form of Exhibit A, B or C to the Proposed
Agreement with appropriate insertions. The Proposed Agreement and
such Notes thereunder would be for a term of not less than one year
nor more than ten years from the date of borrowing.
FIVE. Kingsport proposes to apply all of the proceeds of the
financing to pay short-term indebtedness incurred by Kingsport.
SIX. Balance sheets of Kingsport as of September 30, 1993 and
the related statements of income and retained earnings of Kingsport
for the twelve-month period then ended are annexed hereto as
Exhibit B.
WHEREFORE, Kingsport respectfully prays that an Order be
entered (1) authorizing Kingsport from time to time through June
30, 1995 to borrow up to $5,000,000 pursuant to the Proposed
Agreement and to execute a note or notes substantially in the form
of the Notes in an amount not to exceed $5,000,000 to evidence the
borrowings to be made pursuant to the Proposed Agreement and (2)
granting to Kingsport such other, further or general relief as, in
your judgment, Kingsport may be entitled to have upon the facts
hereinabove set forth.
KINGSPORT POWER COMPANY
By:_/s/ G. P. Maloney_
Vice President
Dated: January 25, 1994
T. Arthur Scott, Jr., Esq.
Hunter, Smith & Davis
1212 North Eastman Road
Kingsport, Tennessee 37664
Attorney for Petitioner
kgpt.94\kgptapp.tn
