<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 6, 2000)
$150,000,000
Entergy Louisiana, Inc.
FIRST MORTGAGE BONDS,
8 1/2% SERIES DUE JUNE 1, 2003
---------------------
Interest payable on June 1 and December 1
---------------------
WE MAY REDEEM THE BONDS PRIOR TO MATURITY, IN WHOLE OR IN PART, AT THE TIMES, AT
THE REDEMPTION PRICES AND UNDER THE CIRCUMSTANCES DESCRIBED HEREIN.
---------------------
PRICE 99.783% AND ACCRUED INTEREST, IF ANY
---------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO ENTERGY
PUBLIC COMMISSIONS LOUISIANA
------------- ------------- -------------------
<S> <C> <C> <C>
Per bond................................... 99.783% 0.350% 99.433%
Total...................................... $149,674,500 $525,000 1$49,149,500
</TABLE>
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriter expects to deliver the bonds to purchasers on May 23, 2000.
---------------------
MORGAN STANLEY DEAN WITTER
May 18, 2000
<PAGE>
You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not authorized anyone else to provide you with different information. You should
not assume that the information contained in this prospectus supplement, the
accompanying prospectus or the documents incorporated by reference is accurate
as of any date other than as of the dates of these documents or the date these
documents were filed with the SEC. We are not making an offer of the bonds in
any state where the offer is not permitted.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
Where You Can Find More Information......................... S-2
Selected Financial Information.............................. S-3
Use of Proceeds............................................. S-4
Description of the Bonds.................................... S-4
Underwriter................................................. S-7
Experts..................................................... S-7
PROSPECTUS
About This Prospectus....................................... 2
Entergy Louisiana, Inc. .................................... 2
Ratios of Earnings to Fixed Charges......................... 2
Where You Can Find More Information......................... 3
Use of Proceeds............................................. 4
Description of the First Mortgage Bonds..................... 4
Description of the Debt Securities.......................... 9
Book-Entry Only Securities.................................. 15
Experts and Legality........................................ 18
Plan of Distribution........................................ 18
</TABLE>
---------------------
WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to "incorporate by reference" the information filed by us
with the SEC, which means we can refer you to important information without
restating it in this prospectus supplement and the accompanying prospectus. The
information incorporated by reference is considered to be part of this
prospectus supplement and the accompanying prospectus and should be read with
the same care. We incorporate by reference our Annual Report on Form 10-K for
the year ended December 31, 1999, our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000 and any future filings that we make with the SEC
under the Securities Exchange Act of 1934 if the filings are made prior to the
time that all the bonds are sold in this offering. You can also find more
information about us from the sources described under "Where You Can Find More
Information" in the accompanying prospectus.
S-2
<PAGE>
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
You should read our selected financial information set forth below in
conjunction with the financial statements and other financial information
contained in the documents incorporated by reference.
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS ENDED
---------------------------------------------------------------
DECEMBER 31,
MARCH 31, -------------------------------------------------
2000 1999 1998 1997 1996
----------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues............. $1,801,279 $1,806,594 $1,710,908 $1,803,272 $1,828,867
Operating Income............... 400,667 420,142 402,881 367,580 436,446
Interest Expense (net)......... 110,817 113,135 121,161 127,490 130,919
Net Income..................... 181,475 191,770 179,487 141,757 190,762
Ratio of Earnings to Fixed
Charges(1).................. 3.39 3.48 3.18 2.74 3.16
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
------------------------------------------------------
AS ADJUSTED(2)
ACTUAL ------------------------
AMOUNT PERCENT AMOUNT PERCENT
----------- ------- ----------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
First Mortgage Bonds..................... $ 418,359 16.1% $ 568,359 21.4%
Other Long-Term Debt(3).................. 827,188 31.7 727,188 27.4
Preferred Stock (with sinking fund)...... 35,000 1.3 35,000 1.3
Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely junior
subordinated deferrable debentures.... 70,000 2.7 70,000 2.6
Shareholders' Equity:
Preferred Stock (without sinking
fund)............................... 100,500 3.9 100,500 3.8
Common Stock and Paid-in Capital...... 1,086,729 41.7 1,086,729 40.9
Retained Earnings..................... 68,367 2.6 68,367 2.6
---------- ----- ---------- -----
Total Shareholders' Equity.......... 1,255,596 48.2 1,255,596 47.3
---------- ----- ---------- -----
Total Capitalization............. $2,606,143 100.0% $2,656,143 100.0%
========== ===== ========== =====
</TABLE>
- ---------------
(1) "Earnings", as defined by Regulation S-K of the SEC, represent the aggregate
of (a) income before the cumulative effect of an accounting change, (b)
taxes based on income, (c) investment tax credit adjustments -- net and (d)
fixed charges. "Fixed Charges" include interest (whether expensed or
capitalized), related amortization and interest applicable to rentals
charged to operating expenses.
(2) Adjusted to reflect (a) the issuance and sale of the bonds offered by this
prospectus supplement and (b) the repayment by us in April 2000 of a $100
million intercompany advance from our parent, Entergy Corporation, that was
classified as long-term debt.
(3) Excludes current maturities of other long-term debt of approximately $16.4
million.
S-3
<PAGE>
USE OF PROCEEDS
We anticipate our net proceeds from the sale of the bonds will be
approximately $148,864,500 after deducting underwriting discounts and
commissions and estimated offering expenses of $285,000. We will use the net
proceeds we receive from the issuance and sale of the bonds to reduce short-term
debt that was incurred to repay an intercompany advance from our parent, Entergy
Corporation and for working capital needs, capital expenditures and general
corporate purposes.
DESCRIPTION OF THE BONDS
INTEREST, MATURITY AND PAYMENT
We are issuing $150 million of First Mortgage Bonds 8 1/2% Series due June
1, 2003 under the Mortgage described in the accompanying prospectus. We will pay
interest on the bonds on June 1 and December 1 of each year. So long as the
bonds are registered in the name of DTC or its nominee, the record date for
interest payable on any interest payment date shall be the close of business on
the Business Day immediately preceding such interest payment date. We will begin
paying interest on the bonds on December 1, 2000. Interest starts to accrue from
the date the bonds are issued. The bonds will be issued on the basis of retired
first mortgage bonds. As of March 31, 2000, approximately $562.8 million of
first mortgage bonds could have been issued on the basis of retired bond
credits. We have agreed to pay interest on any overdue principal and, if such
payment is enforceable under applicable law, on any overdue installment of
interest on the bonds at a rate of 6% per annum to holders of record at the
close of business on the Business Day immediately preceding our payment of such
interest.
As long as the bonds are registered in the name of DTC or its nominee, we
will pay principal, any premium, and interest due on the bonds to DTC. DTC will
then make payment to its participants for disbursement to the beneficial owners
of the bonds as described in the accompanying prospectus under "Book-Entry Only
Securities".
REDEMPTION OF BONDS
We may redeem the bonds, in whole or in part, at our option, at any time
before the maturity of the bonds, on not less than 30 days' nor more than 60
days' notice,
(1) by the application of proceeds of insurance or of cash deposited
with the corporate trustee pursuant to the provisions of the Mortgage
relating to eminent domain or sales to governmental entities or designees
thereof of property subject to the Mortgage at the special redemption price
of 100% of the principal amount of the bonds being redeemed, or
(2) at a redemption price equal to the greater of
(a) 100% of the principal amount of the bonds being redeemed and
(b) as determined by an Independent Investment Banker, the sum of
the present values of the remaining scheduled payments of principal of
and interest on the bonds being redeemed (excluding the portion of any
such interest accrued to the redemption date), discounted (for purposes
of determining such present values) to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate plus .125%,
plus, in each case, accrued interest thereon to the redemption date.
If, at the time notice of redemption is given, the redemption monies are
not held by the corporate trustee, the redemption may be made subject to receipt
of such monies before the date fixed for redemption, and such notice shall be of
no effect unless such monies are so received.
S-4
<PAGE>
We may apply cash we deposit under any provision of the Mortgage, with
certain exceptions, to the redemption or purchase, including the purchase from
us, of first mortgage bonds of any series including the bonds offered by this
prospectus supplement.
CERTAIN DEFINITIONS
"Adjusted Treasury Rate" means, with respect to any redemption date:
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after the remaining term of the bonds, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the
nearest month); or
(2) if such release (or any successor release) is not published during
the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to
the Comparable Treasury Price for such redemption date.
The Adjusted Treasury Rate shall be calculated on the third Business Day
preceding the redemption date.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the corporate trust
office of the corporate trustee is closed for business.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the bonds that would be utilized at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
bonds.
"Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of five Reference Treasury Dealer Quotations for such redemption
date after excluding the highest and lowest such Reference Treasury Dealer
Quotations or (2) if the Independent Investment Banker obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by us.
"Reference Treasury Dealer" means (1) Morgan Stanley & Co. Incorporated and
its successors; provided, however, that if it shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), we
will substitute therefor another Primary Treasury Dealer, and (2) any other
Primary Treasury Dealer selected by the Independent Investment Banker after
consultation with us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
an Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to that Independent Investment Banker at 5:00 p.m. on the
third Business Day preceding such redemption date.
S-5
<PAGE>
DIVIDEND COVENANT
We covenant in substance that, so long as any bonds remain outstanding, we
will not pay any cash dividends on common stock or repurchase common stock after
May 14, 2000 if, after giving effect to such dividends or purchases, the
aggregate amount of such dividends or purchases after May 14, 2000 (other than
dividends we have declared on or before May 14, 2000 for payment on or before
July 1, 2000) exceeds credits to earned surplus after May 14, 2000 plus $345
million and plus such additional amounts as shall be approved by the SEC.
TRUSTEES
The Bank of New York (successor to Harris Trust Company of New York) and
Stephen J. Giurlando (successor to Mark F. McLaughlin) are trustees under the
Mortgage.
ADDITIONAL INFORMATION
For additional information about the bonds, see "Description of the First
Mortgage Bonds" in the accompanying prospectus, including:
(1) additional information about the terms of the bonds, including
security,
(2) general information about the Mortgage and the trustees,
(3) a description of certain restrictions contained in the Mortgage,
(4) a description of events of default under the Mortgage, and
(5) the meaning of certain capitalized terms used but not defined in
this prospectus supplement.
S-6
<PAGE>
UNDERWRITER
Under the terms and conditions set forth in the Underwriting Agreement
dated the date of this prospectus supplement, Morgan Stanley & Co. Incorporated,
as underwriter, has agreed to purchase, and we have agreed to sell to the
underwriter, $150 million principal amount of bonds.
Under the terms and conditions of the underwriting agreement, the
underwriter has committed, subject to the terms and conditions set forth
therein, to take and pay for all of the bonds if any of the bonds are taken.
The underwriter has advised us that it proposes to offer all or part of the
bonds directly to purchasers at the public offering price set forth on the cover
page of this prospectus supplement and to certain securities dealers at such
price less a concession not in excess of .250% of the principal amount of the
bonds. The underwriter may allow, and such dealers may reallow to certain
brokers and dealers, a concession not in excess of .125% of the principal amount
of the bonds. After the bonds are released for sale to the public, the public
offering price and other selling terms may from time to time be varied.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933.
There is presently no trading market for the bonds and there is no
assurance that a market will develop since we do not intend to apply for listing
of the bonds on a national securities exchange. Although it is under no
obligation to do so, the underwriter presently intends to act as a market maker
for the bonds in the secondary trading market, but may discontinue such
market-making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the bonds.
In order to facilitate the offering of the bonds, the underwriter may
engage in transactions that stabilize, maintain or otherwise affect the price of
the bonds. Specifically, the underwriter may overallot in connection with the
offering, creating a short position in the bonds for its own account. In
addition, to cover overallotments or to stabilize the price of the bonds, the
underwriter may bid for, and purchase, the bonds in the open market. Finally,
the underwriter may reclaim selling concessions allowed to a dealer for
distributing the bonds in the offering, if it repurchases previously distributed
bonds in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market price for the bonds above independent market levels. The underwriter is
not required to engage in these activities and may end any of these activities
at any time.
The underwriter or its affiliates may engage, or have engaged, in various
general financing and banking transactions from time to time with us or our
affiliates.
EXPERTS
The financial statements incorporated in this prospectus supplement and the
accompanying prospectus by reference to our Annual Report on Form 10-K for the
year ended December 31, 1999 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
S-7
<PAGE>
PROSPECTUS
$500,000,000
FIRST MORTGAGE BONDS
AND
DEBT SECURITIES
ENTERGY LOUISIANA, INC.
4809 JEFFERSON HIGHWAY
JEFFERSON, LOUISIANA 70121
(504) 560-2734
ENTERGY LOUISIANA --
- May periodically offer its first mortgage bonds and its debt securities
in one or more series; and
- Will determine the price and other terms of each series of securities
when sold, including whether any series will be subject to redemption
prior to maturity.
THE FIRST MORTGAGE BONDS --
- Will be secured by a mortgage that constitutes a first mortgage lien on
substantially all of our property.
THE DEBT SECURITIES --
- Will be unsecured and will rank equally with all of our other unsecured
and unsubordinated debt; and
- Will be effectively subordinated to all of our secured debt, including
our first mortgage bonds.
SECURITYHOLDERS --
- Will receive interest payments in the amounts and on the dates specified
in an accompanying prospectus supplement.
This prospectus may be used to offer and sell series of securities only if
accompanied by the prospectus supplement for that series. Entergy Louisiana will
provide the specific terms of these securities, including their offering prices,
interest rates and maturities, in supplements to this prospectus. The
supplements may also add, update or change information in this prospectus. You
should read this prospectus and any supplements carefully before you invest.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
March 6, 2000
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, utilizing a "shelf" registration
process. Under this shelf process, we may sell the securities described in this
prospectus in one or more offerings up to a total dollar amount of $500,000,000.
This prospectus provides a general description of the securities being offered.
Each time we sell a series of securities we will provide a prospectus supplement
containing specific information about the terms of that series of securities and
the related offering. It is important for you to consider the information
contained in this prospectus and the related prospectus supplement together with
additional information described under the heading "Where You Can Find More
Information" in making your investment decision.
ENTERGY LOUISIANA, INC.
Entergy Louisiana, Inc. is an electric public utility company providing
service to customers in the State of Louisiana since 1927.
We are owned by Entergy Corporation, which is a registered public utility
holding company registered under the Public Utility Holding Company Act of 1935.
The other major public utilities owned by Entergy Corporation are Entergy
Arkansas, Inc., Entergy Gulf States, Inc., Entergy Mississippi, Inc. and Entergy
New Orleans, Inc. Entergy Corporation also owns all of the common stock of
System Energy Resources, Inc., the principal asset of which is the Grand Gulf
Electric Generating Station.
Capacity and energy from Grand Gulf is allocated among ourselves, Entergy
Arkansas, Inc., Entergy Mississippi, Inc. and Entergy New Orleans, Inc. under a
unit power sales agreement. Our allocated share of Grand Gulf's capacity and
energy, together with related costs is 14%. Payments we make under the unit
power sales agreement are generally recovered through rates set by the Louisiana
Public Service Commission, which regulates our electric service, rates and
charges.
Together with Entergy Arkansas, Inc., Entergy Mississippi, Inc. and Entergy
New Orleans, Inc. we own all of the capital stock of System Fuels, Inc. System
Fuels, Inc. is a special purpose company which implements and maintains certain
programs for the purchase, delivery and storage of fuel supplies for Entergy
Corporation's utility subsidiaries.
The information above is only a summary and is not complete. You should
read the incorporated documents listed under the caption "Where You Can Find
More Information" for more specific information concerning our business and
affairs, including significant contingencies, our general capital requirements,
our financing plans and capabilities, and pending legal and regulatory
proceedings, including the status of industry restructuring in our service
areas.
RATIOS OF EARNINGS TO FIXED CHARGES
We have calculated ratios of earnings to fixed charges pursuant to Item 503
of SEC Regulation S-K as follows:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
TWELVE MONTHS ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
1999 1998 1997 1996 1995 1994
------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
4.06 3.18 2.74 3.16 3.18 2.91
</TABLE>
"Earnings," as defined by Regulation S-K, represent the aggregate of (1)
income before the cumulative effect of an accounting change, (2) taxes based on
income, (3) investment tax credit adjustments-net and (4) fixed charges.
"Fixed Charges" include interest (whether expensed or capitalized), related
amortization and interest applicable to rentals charged to operating expenses.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and current reports, proxy
statements and other information with the SEC. Our filings are available to the
public on the Internet at the SEC's home page located at http://www.sec.gov or
you may read and copy any document at the SEC Public Reference Rooms located at:
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549-1004
CitiCorp Center
500 W. Madison Street
Suite 1400
Chicago, Illinois 60661
7 World Trade Center
13th Floor
New York, New York 10048.
Call the SEC at 1-800-732-0330 for more information about the public reference
rooms and how to request documents.
The SEC allows us to "incorporate by reference" the information filed by us
with the SEC, which means we can refer you to important information without
restating it in this prospectus. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below, along with any future filings that we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until we have sold all of the securities described in this
prospectus:
1. Annual Report on Form 10-K for the year ended December 31, 1998;
and
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30, and September 30, 1999.
You may access a copy of any or all of these filings, free of charge, at
our web site http://www.entergy.com or by writing or telephoning us at the
following address:
Mr. Christopher T. Screen
Assistant Secretary
Entergy Louisiana, Inc.
P. O. Box 61000
New Orleans, Louisiana 70161
(504) 576-4212
You may also direct your requests via e-mail to [email protected].
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not, and any
underwriters, dealers or agents have not, authorized anyone else to provide you
with different information about us or the securities. We are not, and any
underwriters, dealers or agents are not, making an offer of the securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any other date than the date on the front of those documents or that the
documents incorporated by reference in this prospectus are accurate as of any
date other than the date those documents were filed with the SEC.
3
<PAGE>
USE OF PROCEEDS
The net proceeds from the offering of the securities will be used either
(a) to acquire or redeem one or more series of our outstanding securities on
their stated due dates or in some cases prior to their stated due dates or (b)
for other general corporate purposes. The specific securities, if any, to be
acquired or redeemed with the proceeds of a particular series of securities will
be set forth in the prospectus supplement relating to that series.
DESCRIPTION OF THE FIRST MORTGAGE BONDS
General
We will issue the first mortgage bonds offered by this prospectus from time
to time in one or more series under one or more separate supplemental indentures
to the Mortgage and Deed of Trust dated as of April 1, 1944 with Harris Trust
Company of New York, successor corporate trustee, and Mark F. McLaughlin,
successor co-trustee, and together referred to in this prospectus as trustees.
This Mortgage and Deed of Trust, as amended and supplemented, is referred to in
this prospectus as the "Mortgage". All first mortgage bonds issued or to be
issued under the Mortgage, including the first mortgage bonds offered by this
prospectus, are referred to herein as "first mortgage bonds."
The statements in this prospectus and any accompanying prospectus
supplement concerning the first mortgage bonds and the Mortgage are not
comprehensive and are subject to the detailed provisions of the Mortgage. The
Mortgage and a form of supplemental indenture are filed as exhibits to the
registration statement. You should read these documents for provisions that may
be important to you. The Mortgage has been qualified under the Trust Indenture
Act of 1939. You should refer to the Trust Indenture Act for provisions that
apply to the first mortgage bonds. Wherever particular provisions or defined
terms in the Mortgage are referred to under the "Description of the First
Mortgage Bonds" those provisions or defined terms are incorporated by reference
in the prospectus.
Terms of Specific Series of the First Mortgage Bonds
A prospectus supplement relating to each series of first mortgage bonds
offered by this prospectus will include a description of the specific terms
relating to the offering of that series. These terms will include any of the
following terms that apply to that series:
(1) the designation, or name, of the series of first mortgage bonds;
(2) the aggregate principal amount of the series;
(3) the offering price of the series;
(4) the date on which the series will mature;
(5) the rate or method for determining the rate at which the series
will bear interest;
(6) the date from which interest on the series accrues;
(7) the dates on which interest on the series will be payable;
(8) the prices and other terms and conditions, if any, upon which we
may redeem the series prior to maturity;
(9) the applicability of the dividend covenant described below to the
series;
(10) the terms of any insurance policy that will be provided for the
payment of principal of and/or interest on the series; and
(11) any other terms or provisions relating to that series that are
not inconsistent with the Mortgage.
As of September 30, 1999, we had $518 million of first mortgage bonds
outstanding.
4
<PAGE>
Replacement Fund
In addition to actual expenditures for maintenance and repairs, the
Mortgage requires us to expend or deposit each year an amount equal to $800,000
plus 2 1/4% of net additions to the mortgaged electric, gas, steam and/or hot
water utility property made after December 31, 1943 and prior to the beginning
of that year. These funds are for replacements and improvements on electric,
gas, steam and/or hot water utility property and certain automotive equipment
subject to the lien of the Mortgage. We can meet this requirement by:
(1) depositing cash;
(2) certifying gross property additions;
(3) certifying net cash expenditures for certain automotive equipment;
or
(4) by taking credit for first mortgage bonds and qualified lien bonds
that we have retired.
We may withdraw the cash against gross property additions or by waiving our
right to issue first mortgage bonds on the basis of retired bond credits.
We have reserved the right to amend the Mortgage without any consent or
other action of the holders of any series of first mortgage bonds created after
February 29, 1996 to eliminate the requirements of the replacement fund under
the Mortgage.
Sinking or Improvement Fund
The Mortgage also requires us to make annual sinking or improvement fund
payments for certain outstanding series of first mortgage bonds. This amount is
stated as 1% per year of the greatest amount for each of these series
outstanding prior to the beginning of the year, less certain retired first
mortgage bonds. Any series of first mortgage bonds that we issue under this
prospectus will not be entitled to these sinking or improvement fund
requirements.
Redemption and Retirement
GENERAL
The prospectus supplement for a particular series of first mortgage bonds
offered by this prospectus will contain the prices and other terms and
conditions, if any, for redemption of that series prior to maturity.
SPECIAL RETIREMENT PROVISIONS
If, during any 12 month period, we dispose of mortgaged property by order
of or to any governmental authority, resulting in the receipt of $5,000,000 or
more as proceeds, we, subject to certain conditions, must apply such proceeds,
less certain deductions, to the retirement of outstanding first mortgage bonds.
If this occurs, we may redeem the outstanding first mortgage bonds of any series
that are redeemable before maturity by the application of cash deposited for
this purpose at the redemption prices applicable to those first mortgage bonds.
If any series of first mortgage bonds offered by this prospectus will be
redeemable for this purpose, the special redemption prices applicable to that
series will be set forth in the prospectus supplement related to that series.
Security
The first mortgage bonds offered by this prospectus, together with all
other first mortgage bonds outstanding now or in the future under the Mortgage,
will be secured by the Mortgage. In the opinion of our counsel, the Mortgage
constitutes a first mortgage lien on substantially all of our property subject
to:
(1) leases of minor portions of our property to others for uses which,
in the opinion of our counsel, do not interfere with our business,
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(2) leases of certain of our property that we do not use in our
business, and
(3) excepted encumbrances.
The Mortgage does not create a lien on the following "excepted property":
(1) cash and securities;
(2) certain equipment, materials and supplies;
(3) automobiles and other vehicles and aircraft, timber, minerals,
mineral rights and royalties; and
(4) receivables, contracts, leases and operating agreements.
The Mortgage contains provisions that impose a lien of the Mortgage on
property that we acquired after the date of the Mortgage, other than the
excepted property, subject to pre-existing liens. However, if we consolidate or
merge with, or sell substantially all of our assets to, another corporation, the
lien created by the Mortgage will generally not cover the property of the
successor company, other than the property it acquires from us and improvements,
replacements and additions to that property.
The Mortgage also provides that the trustees have a lien on the mortgaged
property to ensure the payment of their reasonable compensation, expenses and
disbursements and for indemnity against certain liabilities. This lien takes
priority over the lien securing the first mortgage bonds.
The Mortgage also contains restrictions on the acquisition of property
subject to liens and on the issuance of bonds under divisional or prior lien
mortgages. Some of these restrictions only apply if certain series of first
mortgage bonds are outstanding.
Issuance of Additional First Mortgage Bonds
The maximum principal amount of first mortgage bonds that may be issued
under the Mortgage is limited to $100 billion at any time outstanding under the
Mortgage, subject to property additions, earnings and other limitations of the
Mortgage. First mortgage bonds of any series may be issued from time to time on
the following bases:
(1) 60% of the cost or fair value, whichever is less, of unfunded
property additions after adjustments to offset retirements;
(2) retirements of first mortgage bonds or qualified lien bonds; or
(3) deposit of cash with the trustees.
Property additions generally include, among other things, electric, gas, steam
or hot water property acquired after December 31, 1943. Securities, automobiles
or other vehicles or aircraft, or property used principally for the production
or gathering of natural gas may not be included as property additions.
As of September 30, 1999, we could have issued approximately $35 million of
additional first mortgage bonds on the basis of property additions and $620
million on the basis of retired first mortgage bonds. We expect to issue the
first mortgage bonds offered by this prospectus on the basis of property
additions or on the basis of retired first mortgage bonds.
When first mortgage bonds are issued on the basis of property additions as
described in clause (1) above, cash as described in clause (3) above or with
certain exceptions, retired first mortgage bonds as described in clause (2)
above, the issuance must meet an "earnings" test. The adjusted net earnings,
before interest and income taxes, for 12 consecutive months of the preceding 15
months must be at least twice the annual interest requirements on all first
mortgage bonds outstanding at the time, plus the first mortgage bonds to be
issued, plus all indebtedness, if any, of prior rank. The adjusted net earnings
are
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calculated after provisions are made for retirement and depreciation of property
at least equal to the replacement fund requirements for that period.
We have reserved the right to amend the Mortgage without any consent or
other action of the holders of any series of first mortgage bonds created after
February 29, 1996
(1) to permit the issuance of first mortgage bonds on the basis of 80%
of the cost or fair value, whichever is less, of unfunded property
additions after adjustments to offset retirements; and
(2) to modify the net earnings test
(a) to provide that the period over which we will calculate net
earnings will be 12 consecutive months of the preceding 18 months,
(b) to specifically permit the inclusion in net earnings of
revenues collected subject to possible refund and allowances for funds
used during construction, and
(c) to provide for no deduction for non-recurring charges.
We have also reserved the right to amend the Mortgage without any consent
or other action by holders of any first mortgage bonds to include nuclear fuel,
and similar or analogous devices or substances, as property additions. We have
also reserved the right to amend the Mortgage without any consent or other
action of the holders of any first mortgage bonds created after June 30, 1978 to
make any form of space satellites including solar power satellites, space
stations and other analogous facilities available as property additions.
No first mortgage bonds may be issued on the basis of property additions
subject to qualified liens if the qualified lien bonds secured thereby exceed
50% of such property additions, or if the qualified lien bonds and first
mortgage bonds then outstanding which have been issued against property
additions subject to continuing qualified liens and certain other items would in
the aggregate exceed 15% of the first mortgage bonds and qualified lien bonds
outstanding.
Release and Substitution of Property
We may release property from the lien of the Mortgage, without applying an
earnings test, on the following bases:
(1) the deposit of cash or, to a limited extent, purchase money
mortgages;
(2) property additions, after adjustments in certain cases to offset
retirements and after making adjustments for qualified lien bonds, if any,
outstanding against property additions; and
(3) a waiver of the right to issue first mortgage bonds on the basis
of retired bond credits.
We can withdraw cash upon the bases stated in clause (2) and (3) above without
applying an earnings test.
If unfunded property is released, the property additions used to effect the
release may become available again as credits under the Mortgage and the waiver
of the right to issue first mortgage bonds on the basis of retired bond credits
to effect the release may cease to be effective as such a waiver. Similar
provisions are in effect as to cash proceeds of such property. The Mortgage also
contains special provisions with respect to qualified lien bonds pledged and the
disposition of moneys received on pledged prior lien bonds.
We have reserved the right to amend the Mortgage without any consent or
other action by the holders of any series of first mortgage bonds created after
February 29, 1996
(1) to permit the release of property from the lien of the mortgage in
an amount equal to the aggregate principal amount of retired bonds that we
elect to use as the basis for such release times the reciprocal of the
bonding ratio in effect when such retired bonds were originally issued;
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(2) to permit the release of unfunded property so long as we have at
least $1 in unfunded property additions remaining;
(3) to remove the existing limitation on the amount of obligations
secured by purchase money mortgages upon any property being released that
can be used as the basis for such release;
(4) to specifically provide that if we transfer all or substantially
all of our property subject to the Mortgage to a successor corporation, we
would be released from all obligations under the Mortgage; and
(5) to change the definition of "Funded Property" to mean only
property we specify with a fair value, to be determined by an independent
expert, of not less than 10/8 of the sum of the amount of outstanding first
mortgage bonds and retired bond credits.
Dividend Covenant
We may covenant that, so long as a particular series of first mortgage
bonds remains outstanding, we will not pay any cash dividends on common stock
after a selected date close to the date of the original issuance of that series
of first mortgage bonds, other than certain dividends that we may declare prior
to this date, except out of credits to earned surplus after this selected date
plus an amount not to exceed $345 million and plus any additional amounts that
the SEC may approve. The prospectus supplement relating to a particular series
of first mortgage bonds will state if this covenant will apply to that series.
Modification
Your rights as a bondholder may be modified with the consent of the holders
of 66 2/3% of the outstanding first mortgage bonds, and, if less than all series
of first mortgage bonds are affected, the consent also of holders of 66 2/3% of
the outstanding first mortgage bonds of each series affected. In general, no
modification of the terms
(1) of payment of principal or interest,
(2) affecting the lien of the Mortgage, or
(3) reducing the percentage required for modification,
is effective against any bondholder without that bondholder's consent.
We have reserved the right to amend the Mortgage without any consent or
other action by the holders of any series of first mortgage bonds created after
February 29, 1996
(1) to reduce the percentage vote required to modify certain rights of
the holders of the first mortgage bonds to a majority of the holders of all
outstanding first mortgage bonds;
(2) to provide that if a proposed change affects less than all series
of outstanding first mortgage bonds then only the consent of a majority of
the first mortgage bonds of each series affected is required to make this
change; and
(3) to permit us to amend the Mortgage without the consent of the
holders of first mortgage bonds to make changes which do not adversely
affect the interests of the holders in any material respect.
Defaults
Defaults under the Mortgage include:
(1) default in the payment of principal;
(2) default for 60 days in the payment of interest or installments of
funds for the retirement of first mortgage bonds;
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(3) certain events of bankruptcy, insolvency or reorganization;
(4) defaults with respect to qualified lien bonds; and
(5) default in other covenants for 90 days after notice.
The trustees may withhold notice of default, except in payment of
principal, interest or funds for retirement of first mortgage bonds, if they
determine it is in your best interests.
The corporate trustee or the holders of 25% of the first mortgage bonds may
declare the principal and interest due and payable on default. However, a
majority of the holders may annul such declaration if the default has been
cured. No holder of first mortgage bonds may enforce the lien of the Mortgage
without giving the trustees written notice of a default and unless
(1) the holders of 25% of the first mortgage bonds have requested the
trustees in writing to act and offered them reasonable opportunity to act
and indemnity satisfactory to them against the costs, expenses and
liabilities to be incurred thereby; and
(2) the trustees shall have failed to act.
The holders of a majority of the first mortgage bonds may direct the time,
method and place of conducting any proceedings for any remedy available to the
trustees or exercising any trust or power conferred upon the trustees.
We are required to file an annual certificate with the trustees as to
compliance with the provisions of the Mortgage and as to the absence of a
default with respect to any of the covenants in the Mortgage.
DESCRIPTION OF DEBT SECURITIES
General
The debt securities will be our direct unsecured general obligations. We
will issue the debt securities offered by this prospectus from time to time in
one or more series under one or more separate indentures between us and the
financial institution(s) that we will name in the prospectus supplement, as
trustee. This indenture or indentures are collectively referred to in this
prospectus as the "indenture".
The following description summarizes certain general terms and provisions
of the debt securities offered by this prospectus. This summary is not complete
and should be read together with the prospectus supplement describing the
specific terms of the debt securities. The form of the indenture is filed as an
exhibit to the registration statement. You should read the indenture for
provisions that may be important to you. The indenture will be qualified under
the Trust Indenture Act of 1939. You should refer to the Trust Indenture Act for
provisions that apply to the debt securities. Whenever particular provisions or
defined terms in the indenture are referred to under this "Description of Debt
Securities," those provisions or defined terms are incorporated by reference in
this prospectus.
The debt securities will rank equally with all of our other unsecured and
unsubordinated debt. As of September 30, 1999, we had $81.9 million of unsecured
and unsubordinated debt that would have ranked equally with the debt securities.
The debt securities will be effectively subordinated to all of our secured
debt, including our first mortgage bonds. As of September 30, 1999, we had $1.2
billion of secured debt outstanding.
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Terms of Specific Series of the Debt Securities
A prospectus supplement relating to each series of debt securities offered
by this prospectus will include a description of the specific terms relating to
the offering of that series. These terms will include any of the following terms
that apply to that series:
(1) the title of the debt securities;
(2) the total principal amount of the debt securities;
(3) the date or dates on which the principal of the debt securities
will be payable or how the date or dates will be determined;
(4) the rate or rates at which the debt securities will bear interest,
or how the rate or rates will be determined, the date or dates from which
any such interest will accrue, the interest payment dates for the debt
securities and the regular record dates for interest payments;
(5) the percentage, if less than 100%, of the principal amount of the
debt securities that will be payable if the maturity of the debt securities
is accelerated;
(6) any period or periods within which, or any date or dates on which,
and the price or prices at which and the terms and conditions upon which,
we may redeem the debt securities at our option and any restrictions on
those redemptions;
(7) any sinking fund or other provisions or options held by holders of
debt securities that would obligate us to repurchase or otherwise redeem
the debt securities;
(8) any changes or additions to the events of default under the
indenture or changes or additions to our covenants under the indenture;
(9) if the debt securities will be issued in denominations other than
$1,000;
(10) if payments on the debt securities may be made in a currency or
currencies other than United States dollars;
(11) any collateral, security, assurance or guarantee for the debt
securities; and
(12) any other terms of the debt securities not inconsistent with the
terms of the indenture.
The indenture does not limit the principal amount of debt securities that
we may issue under the indenture. Our amended and restated articles of
incorporation generally limit the amount of unsecured debt that we may issue to
the equivalent of 20% of the total of all our secured debt and total equity. As
of September 30, 1999, approximately $259.3 million of additional unsecured debt
with a maturity of less than ten years or $368.2 million of additional unsecured
debt with a maturity ten years or greater could have been issued under this
provision.
We may sell debt securities at a discount below their principal amount. We
may describe in the prospectus supplement United States federal income tax
considerations applicable to debt securities sold at an original issue discount.
In addition, we may describe in the prospectus supplement important United
States federal income tax or other tax considerations applicable to any debt
securities denominated or payable in a currency or currency unit other than
United States dollars.
Except as we may otherwise describe in the prospectus supplement, the
covenants contained in the indenture will not afford holders of debt securities
protection in the event of a highly-leveraged or similar transaction involving
us or in the event of a change of control.
Payment and Paying Agents
Except as we may otherwise provide in the prospectus supplement, we will
pay interest, if any, on each debt security payable on each interest payment
date to the person in whose name that debt security is registered as of the
close of business on the regular record date for that interest payment date.
However,
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interest payable at maturity will be paid to the person to whom the principal is
paid. If there has been a default in the payment of interest on any debt
security, the defaulted interest may be paid to the holder of such debt security
as of the close of business on a date to be fixed by the trustee between 10 and
15 days prior to the date proposed by us for payment of such defaulted interest
or in any other manner permitted by any securities exchange on which that debt
security may be listed, if the trustee finds it practicable.
Unless we otherwise specify in the prospectus supplement, principal of, and
premium, if any, and interest on the debt securities at maturity will be payable
upon presentation of the debt securities at the corporate trust office of the
trustee in The City of New York, as our paying agent. We may change the place of
payment on the debt securities, may appoint one or more additional paying
agents, including us, and may remove any paying agent, all at our discretion.
As long as the debt securities are registered in the name of The Depository
Trust Company, or DTC, or its nominee, as described under the caption
"Book-Entry Only Securities," payments of principal, premium, if any, and
interest will be made to DTC for subsequent disbursement to beneficial owners of
the debt securities.
Registration and Transfer
Unless we otherwise specify in the prospectus supplement, and subject to
restrictions related to the issuance of debt securities through DTC's book-entry
system, the transfer of debt securities may be registered, and debt securities
may be exchanged for other debt securities of the same series or tranche, of
authorized denominations and with the same terms and principal amount, at the
corporate trust office of the trustee in The City of New York. We may change the
place for registration of transfer and exchange of the debt securities and may
designate additional places for registration and exchange. Unless we otherwise
provide in the prospectus supplement, no service charge will be made for any
registration of transfer or exchange of the debt securities. However, we may
require payment to cover any tax or other governmental charge that may be
imposed. We will not be required to execute or to provide for the registration
of transfer of, or the exchange of, (1) any debt security during the 15 days
prior to giving any notice of redemption or (2) any debt security selected for
redemption, except the unredeemed portion of any debt security being redeemed in
part.
Satisfaction and Discharge
We will be discharged from our obligations on the debt securities of a
particular series if we deposit with the trustee sufficient cash or government
securities to pay the principal, interest, any premium and any other sums when
due on the stated maturity date or a redemption date of that series of debt
securities.
The indenture will be deemed satisfied and discharged when no debt
securities remain outstanding and when we have paid all other sums payable by us
under the indenture.
Consolidation, Merger and Sale of Assets
Under the terms of the indenture, we may not consolidate with or merge into
any other entity or convey, or transfer or lease our properties and assets
substantially as an entirety to any entity, unless:
(1) the surviving or successor entity is organized and validly
existing under the laws of any domestic jurisdiction and it expressly
assumes our payment obligations on all outstanding debt securities and our
obligations under the indenture;
(2) immediately after giving effect to the transaction, no event of
default and no event which, after notice or lapse of time or both, would
become an event of default, shall have occurred and be continuing; and
(3) we shall have delivered to the trustee an officer's certificate
and an opinion of counsel as provided in the indenture.
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The terms of the indenture do not restrict us in a merger in which we are
the surviving entity.
Events of Default
"Event of default", when used in the indenture with respect to any series
of debt securities, means any of the following:
(1) failure to pay interest on any debt security of that series for 60
days after it is due;
(2) failure to pay the principal of or any premium on any debt
security of that series when due;
(3) failure to perform any other covenant in the indenture, other than
a covenant that does not relate to that series of debt securities, that
continues for 60 days after we receive written notice from the trustee, or
after we and the trustee receive a written notice from the holders of at
least 33% in principal amount of the outstanding debt securities of that
series; however, the trustee or the trustee and the holders of that
principal amount of debt securities of that series can agree to an
extension of the 60 day period and such an agreement to extend will be
automatically deemed to occur if we are diligently pursuing action to
correct the default;
(4) events in bankruptcy, insolvency or our reorganization specified
in the indenture; or
(5) any other event of default specified for that series of debt
securities.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under the indenture. The trustee may withhold notice to the
holders of debt securities of any default, except default in the payment of
principal, premium or interest, if it considers the withholding of notice to be
in the interests of holders.
Remedies
ACCELERATION OF MATURITY
If an event of default for any series of debt securities occurs and
continues, then either the trustee or the holders of at least 33% in principal
amount of that series may declare the entire principal amount of all the debt
securities of that series, together with accrued interest, to be due and payable
immediately. However, if the event of default is applicable to more than one
series of debt securities under the indenture, only the trustee or holders of at
least 33% in aggregate principal amount of the outstanding debt securities of
all affected series, voting as one class, and not the holders of any one series,
may make that declaration of acceleration.
At any time after a declaration of acceleration with respect to the debt
securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained, the event of default giving rise to
that declaration of acceleration will be considered waived, and that declaration
and its consequences will be considered rescinded and annulled, if:
(1) we have paid or deposited with the trustee a sum sufficient to
pay:
(a) all overdue interest on all debt securities of that series;
(b) the principal of and premium, if any, on any debt securities of
that series which have otherwise become due and interest that is
currently due;
(c) interest on overdue interest; and
(d) all amounts due to the trustee under the indenture; and
(2) any other event of default with respect to the debt securities of
that series has been cured or waived as provided in the indenture.
There is no automatic acceleration, even in the event of our bankruptcy,
insolvency or reorganization.
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RIGHT TO DIRECT PROCEEDINGS
Other than its duties in case of an event of default, the trustee is not
obligated to exercise any of its rights or powers under the indenture at the
request, order or direction of any of the holders, unless the holders offer the
trustee reasonable security or indemnity. If they provide this reasonable
security or indemnity, the holders of a majority in principal amount of any
series of 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 power conferred upon the trustee. However, if the event of
default relates to more than one series of debt securities, only the holders of
a majority in aggregate principal amount of all affected series, voting as one
class, will have the right to give this direction and not the holders of any one
series. The trustee is not obligated to comply with directions that conflict
with law or other provisions of the indenture.
LIMITATION ON RIGHT TO INSTITUTE PROCEEDINGS
No holder of debt securities of any series will have any right to institute
any proceeding under the indenture, or any remedy under the indenture, unless:
(1) the holder has previously given to the trustee written notice of a
continuing event of default;
(2) the holders of a majority in aggregate principal amount of the
outstanding debt securities of all series in respect of which an event of
default shall have occurred and be continuing have made a written request
to the trustee, and have offered reasonable indemnity to the trustee to
institute proceedings; and
(3) the trustee has failed to institute any proceeding for 60 days
after that notice, request and offer of indemnity.
However, these limitations do not apply to a suit by a holder of a debt
security for payment of the principal, premium, if any, or interest on that debt
security on or after the applicable due date.
ANNUAL NOTICE TO TRUSTEE
We will provide to the trustee an annual statement by an appropriate
officer as to our compliance with all conditions and covenants under the
indenture.
Modification and Waiver
Without the consent of any holder of debt securities, we may enter into one
or more supplemental indentures for any of the following purposes:
(1) to evidence the assumption by any permitted successor of our
covenants in the indenture and in the debt securities;
(2) to add additional covenants or to surrender any of our rights or
powers under the indenture;
(3) to add additional events of default;
(4) to change or eliminate any provision of the indenture or to add
any new provision to the indenture; provided, however, if the change,
elimination or addition will adversely affect the interests of the holders
of debt securities of any series in any material respect, the change,
elimination or addition will become effective only:
(a) when the consent of the holders of debt securities of that
series has been obtained in accordance with the indenture; or
(b) when no debt securities of the affected series remain
outstanding under the indenture;
(5) to provide collateral security for all but not part of the debt
securities;
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(6) to establish the form or terms of debt securities of any series as
permitted by the indenture;
(7) to provide for the authentication and delivery of bearer
securities and coupons attached thereto;
(8) to evidence and provide for the acceptance of appointment of a
successor trustee;
(9) to provide for the procedures required for use of a
non-certificated system of registration for the debt securities of all or
any series;
(10) to change any place where principal, premium, if any, and
interest shall be payable, debt securities may be surrendered for
registration of transfer or exchange and notices to us may be served; or
(11) to cure any ambiguity or inconsistency or to make any other
change to the provisions or to add other provisions with respect to matters
or questions arising under the indenture; provided that the action does not
adversely affect the interests of the holders of debt securities of any
series in any material respect.
The holders of a majority in aggregate principal amount of the debt
securities of all series then outstanding may waive our compliance with some
restrictive provisions of the indenture. The holders of not less than a majority
in principal amount of the outstanding debt securities of any series may waive
any past default under the indenture with respect to that series, except a
default in the payment of principal, premium, if any, or interest and certain
covenants and provisions of the indenture that cannot be modified or be amended
without the consent of the holder of each outstanding debt security of the
series affected.
If the Trust Indenture Act of 1939 is amended after the date of the
indenture in such a way as to require changes to the indenture, the indenture
will be deemed to be amended so as to conform to that amendment to the Trust
Indenture Act of 1939. We and the trustee may, without the consent of any
holders, enter into one or more supplemental indentures to evidence that
amendment.
The consent of the holders of a majority in aggregate principal amount of
the debt securities of all series then outstanding, voting as one class, is
required for all other modifications to the indenture. However, if less than all
of the series of debt securities outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the holders of a majority in
aggregate principal amount of all series that are directly affected, voting as
one class, will be required. No supplemental indenture may:
(1) change the stated maturity of the principal of, or any installment
of principal of or interest on, any debt security, or reduce the principal
amount of any debt security or its rate of interest or change the method of
calculating the interest rate or reduce any premium payable upon
redemption, or reduce the amount of principal that would be due and payable
upon a declaration of acceleration of the maturity thereof, or change the
currency in which payments are made, or impair the right to institute suit
for the enforcement of any payment on or after the stated maturity of any
debt security, without the consent of the holder of that debt security;
(2) reduce the percentage in principal amount of the outstanding debt
securities of any series the consent of the holders of which is required
for any supplemental indenture or any waiver of compliance with a provision
of the indenture or any default thereunder and its consequences, or reduce
the requirements for quorum or voting, without the consent of all the
holders of the series; or
(3) modify some of the provisions of the indenture relating to
supplemental indentures, waivers of certain covenants and waivers of past
defaults with respect to the debt securities of any series, without the
consent of the holder of each outstanding debt security affected thereby.
A supplemental indenture which changes the indenture solely for the benefit
of one or more particular series of debt securities, or modifies the rights of
the holders of debt securities of one or more series, will not affect the rights
under the indenture of the holders of the debt securities of any other series.
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The indenture provides that debt securities owned by us or anyone else
required to make payment on the debt securities shall be disregarded and
considered not to be outstanding in determining whether the required holders
have given a request or consent.
We may fix in advance a record date to determine the required number of
holders entitled to give any request, demand, authorization, direction, notice,
consent, waiver or other such act of the holders, but we shall have no
obligation to do so. If we fix a record date, that request, demand,
authorization, direction, notice, consent, waiver or other act of the holders
may be given before or after that record date, but only the holders of record at
the close of business on that record date will be considered holders for the
purposes of determining whether holders of the required percentage of the
outstanding debt securities have authorized or agreed or consented to the
request, demand, authorization, direction, notice, consent, waiver or other act
of the holders. For that purpose, the outstanding debt securities shall be
computed as of the record date. Any request, demand, authorization, direction,
notice, consent, election, waiver or other act of a holder will bind every
future holder of the same debt securities and the holder of every debt security
issued upon the registration of transfer of or in exchange of those debt
securities. A transferee will be bound by acts of the trustee or us in reliance
thereon, whether or not notation of that action is made upon the debt security.
Resignation of Trustee
A trustee may resign at any time by giving written notice to us or may be
removed at any time by act of the holders of a majority in principal amount of
all series of debt securities then outstanding delivered to the trustee and us.
No resignation or removal of a trustee and no appointment of a successor trustee
will be effective until the acceptance of appointment by a successor trustee. So
long as no event of default or event which, after notice or lapse of time, or
both, would become an event of default has occurred and is continuing and except
with respect to a trustee appointed by act of the holders, if we have delivered
to the trustee a resolution of our board of directors appointing a successor
trustee and such successor has accepted the appointment in accordance with the
terms of the respective indenture, the trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the indenture.
Notices
Notices to holders of debt securities will be given by mail to the
addresses of such holders as they appear in the security register under the
indenture.
Title
We, the trustee, and any of our agents or any agent of the trustee, may
treat the person in whose name debt securities are registered as the absolute
owner thereof, whether or not the debt securities may be overdue, for the
purpose of making payments and for all other purposes irrespective of notice to
the contrary.
Governing Law
Each indenture and the debt securities will be governed by, and construed
in accordance with, the laws of the State of New York.
BOOK-ENTRY ONLY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, DTC,
will act as securities depository for the securities offered by this prospectus.
The securities will be issued only as fully registered securities registered in
the name of Cede & Co., DTC's partnership nominee or such other name as may be
requested by an authorized representative of DTC. One fully-registered
certificate will be issued for each series of securities, representing the
aggregate principal amount of that series of securities, and will be deposited
with DTC or its custodian. If, however, the aggregate principal amount of any
series of
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securities offered exceeds $400 million, one certificate will be issued with
respect to each $400 million of principal amount and an additional certificate
will be issued for any remaining principal amount of such series.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized records for Direct Participants'
accounts. This eliminates the need for physical movement of securities
certificates.
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 The New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly (the "Indirect Participants," and, together with the Direct
Participants, the "Participants"). The rules applicable to DTC and its
Participants are on file with the SEC.
Purchases of securities within the DTC system must be made by or through
Direct Participants which will receive a credit for the securities on DTC's
records. The ownership interest of each actual purchaser of a security (a
"Beneficial Owner") will, in turn, be recorded on the Direct and Indirect
Participant's respective records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the securities 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 the securities, except in the
event that the use of the book-entry system for the securities is discontinued.
To facilitate subsequent transfers, all securities deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the securities with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of actual beneficial
ownership of the securities; DTC's records reflect only the identity of the
Direct Participants to whose accounts such securities are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be applicable. Beneficial Owners of securities may wish to take certain
steps to augment transmission to them of notices of significant events with
respect to the securities, such as redemptions, tenders, defaults, and proposed
amendments to the security documents. Beneficial Owners of securities may wish
to ascertain that the nominee holding the securities for their benefit has
agreed to obtain and transmit notices to Beneficial Owners, or in the
alternative, Beneficial Owners may wish to provide their names and addresses to
the registrar and request that copies of the notices be provided directly to
them.
Redemption notices, if any, will be sent to Cede & Co. If less than all of
the securities of a particular series are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series to be redeemed.
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Neither DTC nor Cede & Co., nor such other DTC nominee, will consent or
vote with respect to the securities. Under its usual procedures, DTC mails an
omnibus proxy (an "Omnibus Proxy") to the appropriate trustee 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
securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Payments of redemption proceeds, principal of, premium, if any, and
interest on the securities will be made to DTC, or such other nominee as may be
requested by an authorized representative of DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with 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 underwriters, the appropriate trustee or
us, subject to any statutory or regulatory requirements that may be in effect
from time to time. Payment of redemption proceeds, principal, premium, if any,
and interest to DTC is our responsibility or that of the appropriate trustee.
Disbursement of such payments to Direct Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the securities at any time by giving reasonable notice to us or the
appropriate trustee. Under such circumstances and in the event that a successor
securities depository is not obtained, certificates for the securities are
required to be printed and delivered. In addition, we may, at any time,
discontinue use of the system of book-entry transfers through DTC or a successor
securities depository. In that event, certificates for the securities will also
be printed and delivered.
We will not have any responsibility or obligation to Participants or the
persons for whom they act as nominees with respect to the accuracy of the
records of DTC, its nominee or any Direct or Indirect Participant with respect
to any ownership interest in the securities, or with respect to payments to, or
providing of notice to, the Direct Participants, the Indirect Participants or
the Beneficial Owners.
So long as Cede & Co. is the registered owner of any series of securities,
as nominee of DTC, references herein to holders of such series of securities
shall mean Cede & Co. or DTC and shall not mean the Beneficial Owners of the
securities.
DTC management is aware that some computer applications, systems and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its Participants and other members of the financial
community that it has developed and is implementing a program so that its
Systems, as the same relate to the timely payment of distributions, including
principal and income payments, to security holders, book entry deliveries, and
settlement of trades within DTC, continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which is
complete. Additionally, DTC's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not, limited to issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the financial community that it is contacting,
and will continue to contact, third party vendors from whom DTC acquires
services to: (a) impress upon them the importance of such services being Year
2000 compliant and (b) determine the extent of their efforts for Year 2000
remediation, and, as appropriate, testing, of their services. In addition, DTC
is in the process of developing such contingency plans as it deems appropriate.
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DTC has established a Year 2000 Project Office and will provide information
concerning DTC's Year 2000 compliance to persons requesting that information.
The address is as follows:
The Depository Trust Company
Year 2000 Project Office
55 Water Street
New York, New York 10041
(212) 855-8068 or
(212) 855-8881
In addition, information concerning DTC's Year 2000 compliance can be obtained
from its web site at the following address: www.dtc.org.
According to DTC, the foregoing information with respect to DTC has been
provided to the financial community for informational purposes only and is not
intended to serve as a representation, warranty or contract modification of any
kind.
The information in this section concerning DTC, its Year 2000 efforts and
its book-entry system has been obtained from DTC. Neither ourselves, the
appropriate trustee nor any underwriters, dealers or agents takes responsibility
for its accuracy or completeness.
EXPERTS AND LEGALITY
The financial statements incorporated in this prospectus by reference to
our Annual Report on Form 10-K for the year ended December 31, 1998 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The legality of the securities will be passed upon for us by Thelen Reid &
Priest LLP, New York, New York, and Denise C. Redmann, Esq., Senior
Counsel -- Corporate and Securities, of Entergy Services, Inc., and for any
underwriters, dealers or agents by Winthrop, Stimson, Putnam & Roberts, New
York, New York. All legal matters pertaining to our organization, titles to
property, franchises and the lien of the Mortgage and all matters pertaining to
Louisiana law will be passed upon only by Denise C. Redmann, Esq.
The statements in this prospectus as to matters of law and legal
conclusions made under "Description of the First Mortgage Bonds -- Security,"
have been reviewed by Denise C. Redmann, Esq., and are set forth herein in
reliance upon the opinion of said counsel, and upon her authority as an expert.
PLAN OF DISTRIBUTION
Methods and Terms of Sale
We may use a variety of methods to sell the securities including:
(1) through one or more underwriters or dealers;
(2) directly to one or more purchasers;
(3) through one or more agents; or
(4) through a combination of any such methods of sale.
The prospectus supplement relating to a particular series of the securities will
set forth the terms of the offering of the securities, including:
(1) the name or names of any underwriters, dealers or agents and any
syndicate of underwriters;
(2) the initial public offering price;
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(3) any underwriting discounts and other items constituting
underwriters' compensation;
(4) the proceeds we receive from that sale; and
(5) any discounts or concessions allowed or reallowed or paid by any
underwriters to dealers.
Underwriters
If we sell the securities through underwriters, they will acquire the
securities for their own account and may resell them from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The underwriters for
a particular underwritten offering of securities will be named in the prospectus
supplement and, if an underwriting syndicate is used, the managing underwriter
or underwriters will be named on the cover page. In connection with the sale of
securities, the underwriters may receive compensation from us or from purchasers
in the form of discounts, concessions or commissions. The obligations of the
underwriters to purchase securities will be subject to certain conditions. The
underwriters will be obligated to purchase all of the securities of a particular
series if any are purchased. However, the underwriters may purchase less than
all of the securities of a particular series should certain circumstances
involving a default of one or more underwriters occur.
The initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers by any underwriters may be changed from time to
time.
Stabilizing Transactions
Underwriters may engage in stabilizing transactions and syndicate covering
transactions in accordance with Rule 104 under the Securities Exchange Act of
1934. Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the securities in the open market
after the distribution has been completed in order to cover syndicate short
positions. These stabilizing transactions and syndicate covering transactions
may cause the price of the securities to be higher than it would otherwise be if
such transactions had not occurred.
Agents
If we sell the securities through agents, the prospectus supplement will
set forth the name of any agent involved in the offer or sale of the securities
as well as any commissions we will pay to them. Unless otherwise indicated in
the prospectus supplement, any agent will be acting on a best efforts basis for
the period of its appointment.
Related Transactions
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our affiliates in the ordinary course of business.
Indemnification
We will agree to indemnify any underwriters, dealers, agents or purchasers
and their controlling persons against certain civil liabilities, including
liabilities under the Securities Act of 1933.
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