File No. 70-9757
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
Pre-Effective Amendment No. 1
to the
Form U-l
___________________________________
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
___________________________________
Entergy Mississippi, Inc.
308 East Pearl Street
Jackson, MS 39201
(Name of company filing this statement and address
of principal executive offices)
___________________________________
Entergy Corporation
(Name of top registered holding company parent of each
applicant or declarant)
___________________________________
Carolyn C. Shanks Steven C. McNeal
President and Chief Executive Officer Vice President and Treasurer
Entergy Mississippi, Inc. Entergy Services, Inc.
308 East Pearl Street 639 Loyola Avenue
Jackson, MS 39201 New Orleans, LA 70113
(Names and addresses of agents for service)
___________________________________
The Commission is also requested to send copies of any
communications in connection with this matter to:
Denise C. Redmann, Esq. John Hood, Esq.
Entergy Services, Inc. Thelen Reid & Priest LLP
639 Loyola Avenue 40 West 57th Street
New Orleans, LA 70113 New York, NY 10019
(504) 576-2272 (212) 603-2140
(504) 576-4150 (fax) (212) 503-2001 (fax)
Betty Collins
Wise Carter Child & Caraway,
Professional Association
P.O. Box 651
Jackson, MS 39205
(601) 968-5563
(601) 968-5519 (fax)
The Application/Declaration is hereby amended in its entirety and
restated to read as follows:
Item 1. Description of Proposed Transactions
Section A. Overview
Entergy Mississippi, Inc., a Mississippi corporation
("Company"), and a subsidiary of Entergy Corporation
("Entergy"), a registered holding company under the Public
Utility Holding Company Act of 1935, as amended, ("Holding
Company Act"), proposes, from time to time through December
31, 2005, through negotiated public offering or competitive
bidding, (1) to issue and sell one or more series of the
Company's first mortgage bonds ("Bonds") and/or one or more
series of the Company's debentures ("Debentures") in a
combined aggregate principal amount of Bonds and Debentures
not to exceed $540 million, and/or the purchasing of
insurance as collateral security for such Bonds and/or
Debentures, and/or (2) to issue and sell (a) through one or
more special purpose subsidiaries of the Company, one or
more series of preferred securities of such subsidiary
having a stated per share liquidation preference ("Entity
Interests") and/or (b) one or more new series of the
Company's Preferred Stock ("Preferred"), in a combined
aggregate amount of Entity Interests and Preferred not to
exceed $50 million (the issuance of the Entity Interests to
include the issuance of one or more series of the Company's
junior subordinated debentures to said special purpose
subsidiaries, each series of junior subordinated debentures
in an amount not to exceed the amount of the respective
series of Entity Interests plus an equity contribution and
in addition to, and not to be included in the $540 million
combined aggregate principal amount of Bonds and Debentures
requested in subsection (1) above), and/or (3) to enter into
arrangements for the issuance and sale of one or more series
of tax-exempt bonds ("Tax-Exempt Bonds") in an aggregate
principal amount not to exceed $46 million for the financing
of certain pollution control facilities, including but not
limited to sewage and/or solid waste disposal facilities
that have not heretofore been the subject of such financing
or for the refinancing of outstanding tax-exempt bonds
issued for that purpose, including the possible issuance and
pledge of one or more new series of Bonds ("Collateral
Bonds") as collateral security for such Tax-Exempt Bonds in
an aggregate principal amount not to exceed $52 million
which amount of said Collateral Bonds is not included in the
$540 million combined aggregate principal amount of Bonds
and Debentures referred to in subsection (1) above and/or
the purchasing of letters of credit and/or insurance as
collateral security for such Tax-Exempt Bonds, and/or (4) to
enter into arrangements for the issuance of municipal
securities in an aggregate principal amount not to exceed
$100,000,000 ("Municipal Securities") to be issued in one or
more series through a state or local municipal entity
("Municipal Entity") (the financings contemplated in (1)
through (4) above being hereinafter collectively referred to
as "New Financing Plan"). Each of these proposed
transactions is discussed in detail below.
Section B. Issuance and Sale of the Bonds
1. The new series of Bonds will be issued under the
Company's Mortgage and Deed of Trust, dated as of February 1,
1988, to Harris Trust Company of New York (formerly Bank of
Montreal Trust Company) and Mark F. McLaughlin (successor to Z.
George Klodnicki), as Trustees, as heretofore amended and
supplemented by fifteen supplemental indentures (each, a
"Supplemental Indenture" and collectively, "Supplemental
Indentures") and as proposed to be so further amended and
supplemented by additional Supplemental Indenture(s), each
relating to one or more new series of Bonds (the "Mortgage").
The Bonds will be issued on the basis of unfunded net property
additions and/or previously retired bonds, as permitted and
authorized by the Mortgage.
2. Each new series of Bonds will be sold at such price,
bear interest at such rate or rates, and mature on such date or
dates as shall be determined at the time of sale or when the
agreement to sell is entered into, as the case may be. No series
of Bonds will be issued at rates in excess of 15% per annum. The
price, exclusive of accrued interest, to be paid to the Company
for each new series of Bonds to be sold at competitive bidding
will be within a range (to be specified by the Company to
prospective purchasers) of 95% to 105% of the principal amount
thereof. Each series of Bonds will mature not later than fifty
years from the day of issuance.
3. As to series having an adjustable interest rate, the
initial interest rate for Bonds of such series will be determined
in discussions between the Company and the purchasers of such
series and will be based on the current market rate for
comparable bonds. Thereafter, the interest rate on such Bonds
will be adjusted according to a pre-established formula or method
of determination ("Floating Rate Bonds") or will be that rate
which, when set, would be sufficient to remarket the Bonds of
such series at their principal amount ("Remarketed Bonds").
4. The interest rate for Floating Rate Bonds after the
initial interest rate period may be set as a percentage of, or as
a specified spread from, a benchmark rate, such as the London
Interbank Offered Rate ("LIBOR") or the yield to maturity of
specified United States Treasury securities ("Treasury Rate"), or
may be established by reference to orders received in an auction
procedure, and will not exceed a specified maximum rate, which
shall not exceed 15% per annum. Such interest rate may be
adjusted at established intervals or may be adjusted
simultaneously with changes in the benchmark rate.
5. The interest rate for Remarketed Bonds after the
initial interest rate period will not exceed 15% per annum.
6. The Supplemental Indenture to the Mortgage for any
series of Remarketed Bonds will provide that holders thereof will
have the right to tender or be required to tender their Bonds at
a price equal to the principal amount thereof, plus any accrued
and unpaid interest thereon, on dates specified in or established
in accordance with the applicable Supplemental Indenture. A
Tender Agent may be appointed to facilitate the tender of any
Bonds by holders. Any holder of Bonds wishing to have such Bonds
purchased may be required to deliver the same during a specified
period of time preceding such purchase date to the Tender Agent,
if one shall have been appointed, or to the Remarketing Agent
appointed to reoffer such tendered Bonds for sale.
7. The Company will be obligated to pay amounts equal to
the amounts to be paid to the Remarketing Agent or the Tender
Agent pursuant to the Supplemental Indenture for the purchase of
Bonds so tendered, such amounts to be paid by the Company on the
dates such payments by the Remarketing Agent or the Tender Agent
are to be made, reduced by the amount of any other moneys
available therefor, including the proceeds of the sale of such
tendered Bonds by the Remarketing Agent. Upon the delivery of
such Bonds by holders to the Remarketing Agent or the Tender
Agent for purchase, the Remarketing Agent will use its best
efforts to sell such Bonds at a price equal to the principal
amount of such Bonds.
8. One or more new series of Bonds may include provisions
for redemption prior to maturity at various percentages of the
principal amount thereof and may include restrictions on optional
redemption for a given number of years. In addition, one or more
series of Bonds may include provisions for the mandatory
retirement of some or all of such series prior to maturity. In
each Supplemental Indenture relating to a series of Bonds, the
Company may create a dividend covenant relating to its payment of
common stock dividends.
9. In order to obtain a more favorable rating on Bonds and
consequently improve the marketability thereof, the Company may
determine to provide an insurance policy for the payment of the
principal of and/or interest and/or premium on one or more series
of Bonds.
10. Reference is made to Exhibits A-1, A-2, A-4, B-1 and B-
2 for further information with respect to the terms of each
series of Bonds.
Section C. Issuance and Sale of the Debentures
1. The Debentures will be issued under one or more
Debenture Indentures or Subordinated Debenture Indentures,
to be substantially in the forms filed as Exhibits A-12 and
A-14, respectively (each, a "Debenture Indenture"), as any
of the same may be supplemented from time to time.
2. Each series of Debentures will be sold at such prices,
will bear interest at such rate(s) and will mature on such
date(s) as shall be determined at the time of sale.
Debentures will not be sold if the fixed interest rate or
initial adjustable interest rate thereon would exceed 15%
per annum. As to series of Debentures having an adjustable
interest rate, the initial interest rate for each such
series will be negotiated by the Company and the purchasers
of such series and will not exceed 15% per annum.
Thereafter, the interest rate on such Debentures ("Floating
Rate Debentures") will be adjusted according to a pre-
established formula or method of determination or will be
that rate which, when set, would be sufficient to remarket
the Debentures of such series ("Remarketed Debentures") at
their principal amount.
3. The interest rate for Floating Rate Debentures after
the initial interest rate period may be set as a percentage
of, or as a specified spread from, a benchmark rate such as
LIBOR or the Treasury Rate, or may be established by
reference to orders received in an auction procedure, and
will not exceed a specified maximum rate, which shall not
exceed 15% per annum. Such interest rate may be adjusted at
established intervals or may be adjusted simultaneously with
changes in the benchmark rate.
4. The interest rate for Remarketed Debentures after the
initial interest rate period will not exceed 15% per annum.
5. The terms of Remarketed Debentures will provide that
holders thereof have the right to tender or are required to
tender their Debentures and have them purchased at a price
equal to the principal amount thereof plus accrued and
unpaid interest thereon, on specified dates. A Tender Agent
may be appointed to facilitate the tender of any Debentures
by holders. Any holder of Remarketed Debentures wishing to
have them purchased may be required to deliver the same
during a specified period of time preceding such purchase
date to the Tender Agent, if one shall be appointed, or to
the Remarketing Agent appointed to reoffer the same for
sale.
6. The Company will be obligated to pay amounts equal to
the amounts to be paid to the Remarketing Agent or the
Tender Agent for the purchase of Remarketed Debentures so
tendered, which amounts will be paid by the Company on the
dates such payments by the Remarketing Agent or the Tender
Agent are to be made, reduced by the amount of any other
moneys available therefor, including the proceeds of the
sale of such tendered Debentures by the Remarketing Agent.
Upon the delivery of such Debentures by holders to the
Remarketing Agent or the Tender Agent for purchase, the
Remarketing Agent will use its best efforts to sell the same
at a price equal to the principal amount thereof.
7. The price, exclusive of accrued interest, to be paid to
the Company for each such series of Debentures sold at
competitive bidding will be within a range (to be specified
by the Company to prospective purchasers) of 95% to 105% of
the principal amount of such series. Each series of
Debentures will mature not later than fifty years from the
day of issuance.
8. One or more series of Debentures may include provisions
for redemption prior to maturity at various percentages of
the principal amount thereof, restrictions on optional
redemption for a given number of years and/or provisions for
the mandatory retirement of some or all of such series prior
to maturity.
9. Debentures issued under a Subordinated Debenture
Indenture will be expressly subordinated to Senior
Indebtedness, as defined therein or pursuant thereto, and
may also provide that, subject to certain specified
conditions, payments of interest on such Subordinated
Debentures may be deferred for specified periods (with or
without cumulative protection), without creating a default
with respect thereto. The Company may covenant that, so
long as any Debentures of a particular series remain
outstanding, the Company, subject to specified exceptions,
will not pay cash dividends on common or preferred stock
subsequent to the date of such series (other than certain
dividends declared prior to the original issuance of such
series) during such period of deferral. However, the Company
may determine not to include any provisions restricting its
ability to pay common stock dividends.
10. In order to obtain a more favorable rating on
Debentures and consequently improve the marketability
thereof, the Company may determine to provide an insurance
policy for the payment of the principal of and/or interest
and/or premium on one or more series of Debentures.
11. Reference is made to Exhibits A-12, A-13, A-14, A-15, B-
8 and B-9 for further information with respect to the terms
of each series of Debentures.
Section D. Issuance and Sale of Entity Interests
1. The Company proposes to organize either a special
purpose limited partnership or a statutory business trust
(the "Issuing Entity") for the sole purpose of issuing the
Entity Interests. The business and affairs of the Issuing
Entity will be conducted by one or more managers or trustees
(individually and collectively, the "Trustee"). Prior to a
default, the Company will, as a result of its ownership of
all voting interest in the Issuing Entity, be entitled to
appoint, remove or replace the Trustee. In the case of a
limited partnership, the Company will either (a) act as the
general partner of the Issuing Entity or (b) organize a
special purpose, wholly-owned corporation for the sole
purpose of acting as the general partner of the Issuing
Entity (the "Participating Subsidiary").
2. The Company will directly or indirectly make an equity
contribution to the Issuing Entity at the time the Entity
Interests are issued and thereby directly or indirectly
acquire all of the general partnership interest (in the case
of a limited partnership) or all of the voting interests (in
the case of a business trust) in such Issuing Entity. The
Company's equity contribution to the Issuing Entity will at
all times constitute a controlling interest in, and at least
a voting majority of the aggregate equity contributions by
all securityholders to, such Issuing Entity.
3. The Entity Interests, which shall have a stated per
share liquidation preference, may be registered under the
Securities Act of 1933, as amended (the "Securities Act"),
by virtue of a registration statement filed thereunder (the
"Entity Registration Statement"). The form of the Entity
Registration Statement will be filed herein though
incorporation by reference as Exhibit C-4. The holders of
the Entity Interests will be either (a) the limited partners
(in the case of a limited partnership) or (b) the holders of
preferred interests (in the case of a business trust) of the
Issuing Entity, and the amounts paid by such holders for the
Entity Interests will be treated as capital contribution to
the Issuing Entity.
4. The Company will issue, from time to time in one or
more series, Subordinated Debentures (the "Entity
Subordinated Debentures") to the Issuing Entity. The
Issuing Entity will use the proceeds from the sale of its
Entity Interests, plus the equity contributions made to it
by either (a) its general partner (in the case of a limited
partnership) or (b) the Company (in the case of a business
trust), to purchase the Entity Subordinated Debentures. If
the corresponding series of Entity Interests are registered,
then the Entity Subordinated Debentures will be registered
under the Securities Act, along with the Entity Interests,
pursuant to the Entity Registration Statement. The Entity
Subordinated Debentures will be issued by the Company
pursuant to a Subordinated Debenture Indenture (the "Entity
Subordinated Debenture Indenture"), which, if the
corresponding series of Entity Interests and Entity
Subordinated Debentures are registered, will be qualified
under the Trust Indenture Act of 1939, as amended Reference
is made to Exhibits A-16 and A-17, respectively for forms of
the Entity Subordinated Debenture Indenture and the Entity
Subordinated Debenture.
5. Each series of Entity Subordinated Debentures will
mature at such time, not more than fifty years from their
date of issuance, as the Company may determine at the time
of issuance. The Entity Subordinated Debenture Indenture
may permit the Entity Subordinated Debentures to be issued
with an initial term, and optional additional terms which
together do not exceed fifty years from the date of
issuance. For example, the Entity Subordinated Debentures
may have an initial term of thirty years with the Company
having the right to extend the maturity for up to an
additional twenty years. Prior to maturity, the Company
will pay interest only on the Entity Subordinated
Debentures, at either a fixed or adjustable rate as set
forth in the Entity Subordinated Debenture Indenture. The
distribution rates, payment dates, redemption, maturity, and
other terms applicable to each series of Entity Interests
will be substantially identical to the interest rates,
payment dates, redemption, maturity, and other terms
applicable to the Entity Subordinated Debentures relating
thereto, and will be determined by the Company at the time
of issuance. The interest paid by the Company on the Entity
Subordinated Debentures will constitute the only source of
income for the Issuing Entity and will be used by the
Issuing Entity to pay monthly or quarterly (as determined at
the time of the sale of each series) distributions on the
Entity Interests.
6. The Company may also enter into a guaranty (the
"Guaranty") pursuant to which it will unconditionally
guarantee (i) payment of distributions on the Entity
Interests, if and to the extent the Issuing Entity has funds
legally available therefor, (ii) payments to the holders of
Entity Interests of certain amounts due upon liquidation of
the Issuing Entity or redemption of the Entity Interests,
and (iii) certain additional "gross up" amounts that may be
payable in respect of the Entity Interests, as described in
paragraph 12 of this section. Such Guaranty (if issued and
if the corresponding series of Entity Interests is
registered) will be registered pursuant to the Entity
Registration Statement. A form of the Guaranty will be
filed by Rule 24 Certificate as Exhibit A-19, unless the
Company has decided not to provide the guaranties described
in this paragraph.
7. The Company's Entity Subordinated Debentures issued
under the Entity Subordinated Debenture Indenture and the
Guaranty (if issued) will be expressly subordinated to
Senior Indebtedness, as defined therein or pursuant thereto,
and may also provide that payment of interest on such Entity
Subordinated Debentures may be deferred for specified
periods not to exceed 60 consecutive months without creating
a default with respect thereto, so long as no dividends are
being paid on, or certain actions are being taken with
respect to the retirement of, the common or preferred stock
of the Company during such period of deferral. In addition,
in each Entity Subordinated Debenture Indenture relating to
a series of Entity Subordinated Debentures, the Company may
create a dividend covenant relating to its payment of common
stock dividends.
8. Distributions on the Entity Interests will be paid
monthly or quarterly (as determined at the time of sale of
each series), will be cumulative, and will be mandatory to
the extent that the Issuing Entity has legally available
funds sufficient for such purposes. The availability of
funds will depend entirely upon the Issuing Entity's receipt
of the amounts due under the Entity Subordinated Debentures.
The Issuing Entity will have the right to defer
distributions on the Entity Interests for a specified
period, but only if and to the extent that the Company
defers the interest payments on the Entity Subordinated
Debentures as described in paragraph 7 of this section. If
distributions on the Entity Interests (including all
previously deferred distributions, if any) are deferred
beyond a specified period, then the holders of Entity
Interests may have the right to appoint a special
representative to enforce the Issuing Entity's rights under
the Entity Subordinated Debentures and Guaranty (if issued),
including the right to accelerate the maturity of the Entity
Subordinated Debentures.
9. It is anticipated that interest payments on the Entity
Subordinated Debentures made by the Company will be
deductible by it for federal and state income tax purposes
and that the Issuing Entity will be treated as either a
partnership or a trust, as the case may be, for federal
income tax purposes. Consequently, the holders of Entity
Interests will be deemed to have received interest income
rather than dividends, and will not be entitled to any
"dividends received deduction" under the Internal Revenue
Code.
10. One or more series of Entity Interests and Entity
Subordinated Debentures may include provisions for the
mandatory retirement of some or all of such series prior to
maturity. The Entity Interests may be subject to
redemption, in whole or in part, on and after a specified
date (the "Earliest Redemption Date") at the option of the
Issuing Entity, with the consent of the Company, at a price
equal to their stated liquidation preference plus any
accrued and unpaid distributions (the "Redemption Price").
The Earliest Redemption Date will be determined based upon,
among other factors, market conditions at the time of
issuance but will be not later than five years after the
date of issuance. The Entity Subordinated Debenture
Indenture and the Entity Agreement (as defined in paragraph
14 of this section) may set forth additional provisions
governing the optional redemption of the Entity Interests.
It is expected that the Issuing Entity will have the option,
with the consent of the Company, to redeem the Entity
Interests at the Redemption Price upon the occurrence of
specified adverse tax events (each a "Tax Event"). Examples
of possible Tax Events are (a) the Issuing Entity becoming
subject to federal income tax with respect to interest
received on the Entity Subordinated Debentures or otherwise
not being treated as a partnership or a trust, as the case
may be, for federal income tax purposes, (b) interest
payments by the Company on the Entity Subordinated
Debentures being determined not to be deductible for federal
income tax purposes, or (c) the Issuing Entity becoming
subject to more than a minimal amount of other taxes, duties
or other governmental impositions. The Entity Subordinated
Debenture Indenture and the Entity Agreement may also
provide that the Entity Interests are subject to optional or
mandatory redemption upon the occurrence of specified
adverse regulatory events (each, a "Regulatory Event"). An
example of a possible Regulatory Event is the Issuing Entity
becoming subject to regulation as an "investment company"
under the Investment Company Act of 1940, as amended.
11. The Company may also reserve the right upon the
occurrence of a Tax Event or a Regulatory Event, to exchange the
Entity Subordinated Debentures for the Entity Interests or
otherwise to distribute the Entity Subordinated Debentures to the
holders of Entity Interests, whereupon the Entity Interests would
be canceled.
12. If, as a result of (a) the Entity Subordinated
Debentures not being treated as indebtedness for federal income
tax purposes, or (b) the Issuing Entity not being treated as
either a partnership or a trust, as the case may be, for federal
income tax purposes, the Issuing Entity is required under
applicable tax laws to withhold or deduct from payments on the
Entity Interests amounts that otherwise would not be required to
be withheld or deducted, the Issuing Entity may also have the
obligation, if the Entity Interests are not redeemed (as
discussed in paragraph 10 of this section) or exchanged (as
discussed in paragraph 11 of this section), to increase or "gross
up" such payments so that the holders of Entity Interests will
receive the same payment after such withholding or deduction as
they would have received if no such withholding or deduction were
required.
13. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Issuing
Entity, holders of Entity Interests will be entitled to
receive, out of the assets of the Issuing Entity available
for distribution to the limited partners (in the case of a
limited partnership) or the preferred securityholders (in
the case of a business trust), before any distribution of
assets to the Company, an amount equal to the stated
liquidation preference of the Entity Interests plus any
accrued and unpaid distributions.
14. Under either the Amended and Restated Agreement of
Limited Partnership or Declaration of Trust, as the case may
be, that shall govern the activities of the Issuing Entity
upon the issuance of the Entity Interests (the "Entity
Agreement"), the activities of the Issuing Entity will be
limited solely to (i) the issuance and sale of Entity
Interests, (ii) the use of the proceeds thereof and the
equity contributions by either the general partner (in the
case of a limited partnership) or the Company (in the case
of a business trust) to purchase the Entity Subordinated
Debentures, (iii) the receipt of interest on the Entity
Subordinated Debentures, and (iv) the payment of
distributions on the Entity Interests. Reference is made to
Exhibit A-18 for a form of the Entity Agreement.
15. The Entity Agreement will further state that either the
general partner (in the case of a limited partnership) or
the Trustee (in the case of a business trust), shall manage
and control the Issuing Entity's business and affairs and be
responsible for all liabilities and obligations of the
Issuing Entity; and that the general partnership interest
(in the case of a limited partnership) or the voting
interests (in the case of a business trust) shall not be
transferable except for a transfer made (a) with the consent
of all other partners (in the case of a limited partnership)
or securityholders (in the case of a business trust), (b) to
a direct or indirect wholly-owned subsidiary, or (c) in the
event of merger, subject to certain conditions.
16. Because the Entity Interests will be supported by the
Company's Entity Subordinated Debentures and Guaranty (if
issued), and the distributions to holders of Entity
Interests will be paid out of the interest payments on such
Entity Subordinated Debentures or pursuant to such Guaranty
(if issued), the Entity Agreement will not include any
interest or distribution coverage or capitalization ratio
restrictions on the ability to issue and sell additional
Entity Interests, because the interest payments of the
Company on the Entity Subordinated Debentures will be
sufficient to service fully the distributions on Entity
Interests. For this reason, financial statements for the
Issuing Entity are not included with this Application-
Declaration.
17. Each series of Entity Interests and any corresponding
series of Entity Subordinated Debentures will be sold at
such price and will be entitled to receive such
distributions or interest payments on such periodic basis as
shall have been determined at the time of sale. No series
of Entity Interests or corresponding series of Entity
Subordinated Debentures will be sold if the fixed
distribution or interest rate or initial adjustable
distribution or interest rate thereon will exceed 15% per
annum. The initial distribution or interest rate for Entity
Interests of such series having an adjustable distribution
or interest rate will be determined in negotiations between
the Company and the underwriters or purchasers of such
series. Thereafter, the distribution rate on such Entity
Interests ("Floating Rate Entity Interests") would be
adjusted according to a pre-established formula or method of
determination or would be that rate which, at the time of
remarketing, would be sufficient to remarket the Entity
Interests of such series ("Remarketed Entity Interests") at
their principal amount.
18. The distribution or interest rate for Floating Rate
Entity Interests after the initial distribution or interest
rate period will be set as a percentage of, or as a
specified spread from, a benchmark rate, such as LIBOR or
the Treasury Rate, or may be established by reference to
orders received in an auction procedure, and will not exceed
a specified maximum rate that will be no greater than 15%
per annum. Such distribution or interest rate may be
adjusted at established intervals or may be adjusted
simultaneously with changes in the benchmark rate.
19. The distribution or interest rate for Remarketed Entity
Interests after the initial distribution or interest rate
period will not exceed 15% per annum.
20. The Entity Agreement will provide that holders of
Remarketed Entity Interests will have the right to tender,
or can be required to tender, their Entity Interests and
have them purchased at a price equal to the liquidation
preference thereof plus accrued and unpaid distributions
thereon, if any, on dates specified in, or established in
accordance with, the Entity Agreement. A Tender Agent may
be appointed to facilitate the tender of Remarketed Entity
Interests by holders. Any holder of Remarketed Entity
Interests wishing to have the same purchased may be required
to deliver such Entity Interests during a specified period
of time preceding such purchase date to the Tender Agent, if
one shall be appointed, or to the Remarketing Agent
appointed to reoffer such tendered Entity Interests for
sale.
21. The Issuing Entity will be obligated to pay amounts
equal to the amounts to be paid to the Remarketing Agent or
the Tender Agent pursuant to the Entity Agreement for the
purchase of Remarketed Entity Interests so tendered (on the
dates such payments by the Remarketing Agent or the Tender
Agent are to be made), reduced by the amount of any other
moneys available therefor, including the proceeds of the
sale of such tendered Entity Interests by the Remarketing
Agent. Upon the delivery of such Entity Interests by
holders to the Remarketing Agent or the Tender Agent for
purchase, the Remarketing Agent will use its best efforts to
sell such Entity Interests at a price equal to the
liquidation amount of such Entity Interests.
22. The price, exclusive of accrued distributions, to be
paid to the Issuing Entity for each such series of Entity
Interests to be sold at competitive bidding will be within a
range (to be specified by the Company to prospective
purchasers) from 95% to 105% of the liquidation amount of
such series of Entity Interests.
Section E. Issuance and Sale of Preferred.
1. The Company expects that each series of the Preferred
will consist of shares of the Company's Preferred Stock,
Cumulative, $100 Par Value ("$100 Preferred"), as currently
authorized by the Company's Restated Articles of
Incorporation, as amended ("Articles"). In accordance with
the Articles, the Company had authorized and unissued at
June 30, 2000, 1,675,000 shares of $100 Preferred.
2. The price, exclusive of accumulated dividends, to be
paid to the Company for each series of Preferred will be
determined at the time of sale and will not be less than par
on a per share basis. With respect to any series of
Preferred to be sold at competitive bidding, the price to be
paid to the Company will be not less than the par value nor
more than 105% thereof per share plus accumulated dividends,
if any. No series of Preferred will be sold if the dividend
rate thereon would exceed 15% per annum.
3. The terms of one or more series of Preferred may
include provisions for redemption at various redemption
prices, may include restrictions on optional redemption for
a given number of years and may include provisions for
purchases in lieu of redemption. The Company may include
for any series of Preferred provisions for a sinking fund
designed to redeem annually, commencing a specified number
of years after the first day of the calendar month in which
such series is issued, at the par value per share of such
series, plus accumulated dividends, a number of shares equal
to a given percentage of the total number of shares up to a
given percentage of the total number of shares of such
series, with the Company having an option to redeem (or
purchase in lieu of redemption) annually an additional
number of shares up to a given percentage of the total
number of shares of such series. Any such sinking fund
provisions will be designed to redeem all outstanding shares
of such series not later than fifty years after the date of
original issuance thereof.
4. Depending upon market conditions at the time of the
offering of a given series of Preferred, if the Company
determines that preferred stock having a public offering
price of less than $100 per share is likely to have a
materially better market reception than shares of $100
Preferred, the Company may issue and sell such series of
$100 Preferred to underwriters for deposit with a bank or
trust company ("Depositary"). The underwriters would then
receive from the Depositary, and deliver to the purchasers
in a subsequent public offering, shares of depositary
preferred stock ("Depositary Preferred"), each representing
a stated fraction of a share of the new series of $100
Preferred. Depositary Preferred would be evidenced by
depositary receipts entitling each owner thereof
proportionally to all the rights and preferences of the
series of $100 Preferred (including dividends, redemption
and voting). A holder of Depositary Preferred will be
entitled to surrender Depositary Preferred to the Depositary
and receive the number of whole shares of $100 Preferred
represented thereby; and a holder of Preferred will be
entitled to surrender shares of $100 Preferred to the
Depositary and receive a proportional amount of Depositary
Preferred.
5. For further information as to the terms of the
Preferred, including possible depositary arrangements,
reference is made to Exhibits A-6 through A-8 and A-10
through A-11.
6. As an alternative to the use of Depositary Preferred to
meet market demand, the Company may determine to amend the
Articles to establish a new class of preferred stock having
no par value or a nominal par value. It is expected that
such class would rank pari passu with the $100 Preferred and
would be identical with the $100 Preferred, except as to par
value, variations among series of the new class and series
of the $100 Preferred, and voting entitlement per share in
cases where the two classes are required to vote together or
with the common stock as a voting group. The new class of
preferred stock would permit the board of directors greater
flexibility in setting the terms of new series to respond to
market conditions by permitting the board to set the stated
value (usually tied to the amount per share payable on
involuntary liquidation) of the shares of each series of
such class. In the event the Company so amends the
Articles, one or more series of the Preferred may consist of
shares of the new class, and the stated value would be
substituted for the par value and any redemption and sinking
fund provisions. In conjunction with this amendment, the
Company may also determine to amend the Articles in other
respects, including, but not limited to, an amendment to
increase the number of authorized shares of $100 Preferred
and/or amendments to clarify certain provisions with respect
to issuance of Preferred with market based dividend rates
and varying dividend payment periods. Approval of the
holders of outstanding $100 Preferred and of Entergy, as
sole holder of the Company's common stock, would be required
in order to effect such an amendment to the Articles. In
the event the Company determines to effect such an
amendment, information on the proposed terms of the new
class and on solicitation of proxies and consents in
connection with shareholder approval of the amendment would
be provided by amendment. Reference is made to Exhibits A-
7, A-8, H-2 and H-3 hereto.
Section F. General Matters Relating to Bonds, Debentures,
Entity
Interests and Preferred
1. The Company anticipates that the issuance and sale of
each series of Bonds, Debentures, Entity Interests and/or
Preferred will be by means of competitive bidding, or
negotiated public offering or private placement with
institutional investors in order to secure the advantages of
an advance marketing effort and/or the best available terms.
2. Reference is made to Exhibits B-1 through B-4 and B-8
through B-11 hereto for information with respect to, among
other things, the procedures to be followed in connection
with the issuance and sale of Bonds, Debentures, Entity
Interests and/or Preferred. Sale(s) of Bonds, Debentures,
Entity Interests and Preferred are separate transactions not
contingent upon one another.
3. The Company proposes to use the net proceeds derived
from the issuance and sale of Bonds, Debentures, Entity
Interests and/or Preferred for general corporate purposes,
including, but not limited to, the conduct of its business
as an electric utility, the repayment of outstanding
securities when due and/or the possible redemption,
acquisition, or refunding of certain outstanding securities
issued by or on behalf of the Company prior to their stated
maturity or due date. The Company's request for
authorization for such sales is in part to provide the
flexibility to permit a quick response to changing market
conditions if it becomes beneficial for the Company to
refinance, refund, or otherwise acquire outstanding high
cost securities.
4. The Mortgage and Articles include earnings coverage
tests for the issuance of additional Bonds and Preferred,
respectively. Reference is made to Exhibits I-1 and I-2 for
information on the amounts of such securities currently
issuable based on such tests. The Company will not issue
any Bonds or Preferred unless all applicable relevant
earnings coverage tests are satisfied.
Section G. Issuance and Sale of Tax-Exempt Bonds and
Related Transactions
1. The Company also may seek to enter into arrangements
for the issuance of Tax-Exempt Bonds, and the Company
proposes from time to time through December 31, 2005 to
enter into one or more leases, subleases, installment sale
agreements, refunding agreements or other agreements and/or
supplements and/or amendments thereto (each and all of the
foregoing being referred to herein as the "Facilities
Agreement") with one or more issuing governmental
authorities (each an "Issuer") that will contemplate the
issuance and sale by the Issuer(s) of one or more series of
Tax-Exempt Bonds in an aggregate principal amount not to
exceed $46 million pursuant to one or more trust indentures
and/or supplements thereto (individually and collectively,
the "Indenture") between the Issuer and one or more trustees
(individually and collectively, the "Trustee").
2. The proceeds of the sale of Tax-Exempt Bonds, net of
any underwriters' discounts or other expenses payable from
proceeds, will be applied to finance certain pollution
control facilities, including but not limited to sewage
and/or solid waste disposal facilities (referred to herein
individually and collectively as the "Facilities"), that
have not heretofore been the subject of such financing, or
to refinance outstanding tax-exempt bonds issued for that
purpose. Pursuant to the terms of each Facilities
Agreement, the Company will agree to purchase, acquire,
construct and install the Facilities unless the Facilities
are already in operation. The Issuer will agree to pay to
the Company an amount equal to the lesser of (a) the total
amount of the proceeds from the sale of the Tax-Exempt Bonds
or (b) the total cost of the Facilities, in the case of
Facilities under construction. Pursuant to the provisions
of the Facilities Agreement, the Company will be obligated
to make payments sufficient to provide for payment by the
Issuer of the principal or redemption price of, premium (if
any) and interest on, and other amounts owing with respect
to the Tax-Exempt Bonds, together with related expenses.
Such payments will be paid by the Company directly to the
Trustee under the Indenture. Under the Facilities
Agreement, the Company may also be obligated to pay (i) the
fees and charges of the Trustee and any registrar or paying
agent under the Indenture, and the Remarketing Agent and the
Tender Agent, as hereinafter referred to, (ii) all expenses
incurred by the Issuer in connection with its rights and
obligations under the Facilities Agreement, (iii) all
expenses necessarily incurred by the Issuer or the Trustee
under the Indenture in connection with the transfer or
exchange of Tax-Exempt Bonds, and (iv) certain other fees
and expenses.
3. The Indenture may provide that, upon the occurrence of
certain events relating to the operation of the Facilities,
a series of Tax-Exempt Bonds will be redeemable by the
Issuer at the direction of the Company. Any series of Tax-
Exempt Bonds may be made subject to a mandatory cash sinking
fund under which certain principal amounts and/or specific
portions of Tax-Exempt Bonds of such series are to be
retired at stated times, and may be subject to mandatory
redemption in certain other cases. The payments by the
Company under the Facilities Agreement in such circumstances
shall be sufficient (together with any other moneys held by
the Trustee under the Indenture and available therefor) to
pay the principal of all Tax-Exempt Bonds to be redeemed or
retired, the premium (if any) and interest accrued or to
accrue to the redemption date thereon.
4. Each series of Tax-Exempt Bonds will mature not earlier
than one year nor later than fifty years from the date of
issuance. The Tax-Exempt Bonds may be subject to optional
redemption by the Issuer, at the direction of the Company,
in whole or in part at the redemption prices (expressed as
percentages of the principal amount thereof) plus accrued
interest to the redemption date, and at the times, as are
set forth in the Indenture.
5. The Facilities Agreement and the Indenture may provide
for a fixed and/or an adjustable interest rate for one or
more series of Tax-Exempt Bonds. No series of Tax-Exempt
Bonds will be sold if the fixed interest rate or initial
adjustable interest rate thereon would exceed 13% per annum.
The initial interest rate for Tax-Exempt Bonds of a series
having an adjustable interest rate will be determined in
negotiations between the Company and the purchasers of such
series. For each Rate Period thereafter, the interest rate
on such Tax-Exempt Bonds will be a rate which, when set,
will be sufficient to remarket the Tax-Exempt Bonds of such
series at a price equal to their principal amount. Such
subsequent interest rates will not exceed 13% per annum.
6. The term "Rate Period", as used herein, refers to a
period during which the interest rate on Tax-Exempt Bonds of
a particular series, while bearing an adjustable rate (or
method of determination of such interest rate), is fixed.
The initial Rate Period will commence on the date when
interest begins to accrue on the Tax-Exempt Bonds of such
series. The length of each Rate Period would be not less
than one day nor more than thirty years.
7. The Facilities Agreement and the Indenture will provide
that the holders of Tax-Exempt Bonds will have the right to
tender or be required to tender their Tax-Exempt Bonds and
have them purchased at a price equal to the principal amount
thereof, plus any accrued and unpaid interest thereon, on
dates specified in, or established in accordance with, the
Indenture. A Tender Agent may be appointed to facilitate
the tender of Tax-Exempt Bonds by holders thereof. Any
holders of Tax-Exempt Bonds wishing to have such Tax-Exempt
Bonds purchased may be required to deliver the same during a
specified period of time preceding such purchase date to the
Tender Agent, if one shall be appointed, or to the
Remarketing Agent appointed to reoffer such tendered Tax-
Exempt Bonds for sale.
8. Under the Facilities Agreement, the Company will be
obligated to pay amounts equal to the amounts to be paid by
the Remarketing Agent or the Tender Agent for the purchase
of Tax-Exempt Bonds so tendered, such amounts to be paid by
the Company on the dates when payments by the Remarketing
Agent or the Tender Agent are to be made; provided, however,
that the obligation of the Company to make any such payment
under the Facilities Agreement will be reduced by the amount
of any other moneys available therefor, including the
proceeds of the sale of tendered Tax-Exempt Bonds by the
Remarketing Agent.
9. Upon the delivery of Tax-Exempt Bonds by holders to the
Remarketing Agent or the Tender Agent for purchase, the
Remarketing Agent will be obligated to use its best efforts
to sell such Tax-Exempt Bonds at a price equal to the
principal amount thereof.
10. In order to obtain a more favorable rating on any
series of Tax-Exempt Bonds, and thereby improve the
marketability thereof, the Company may arrange for one or
more irrevocable letter(s) of credit for an aggregate amount
up to $52 million from one or more banks (individually and
collectively the "Bank") in favor of the Trustee. In that
event, payments with respect to principal, premium, if any,
interest and purchase obligations in connection with such
series of Tax-Exempt Bonds coming due during the term of
such letter of credit, which will not exceed ten years, will
be secured by, and payable from funds (if any) drawn under,
the letter of credit. To induce the Bank to issue such
letter of credit, the Company would enter into one or more
reimbursement agreements ("Reimbursement Agreement") with
the Bank pursuant to which the Company will agree to
reimburse the Bank for all amounts drawn under such letter
of credit within a specified period (not to exceed sixty
months) after the date such funds are drawn and with
interest thereon at a rate that will not exceed the Bank's
prime commercial lending rate plus 2%. The terms of the
Reimbursement Agreement will correspond to the terms in the
letter of credit.
11. It is anticipated that the Reimbursement Agreement
would require the payment in advance by the Company to the
Bank of letter of credit arrangement fees not to exceed 1%
of the face amount of the letter of credit and annual fees
not to exceed 2% of the face amount of the letter of credit.
Any such letter of credit will expire or be terminable prior
to the maturity date of the series of Tax-Exempt Bonds that
such letter of credit supports and, in connection with such
expiration or termination, such series of Tax-Exempt Bonds
can be made subject to mandatory redemption or purchase on
or prior to the date of expiration or termination of such
letter of credit, subject to the rights of owners of Tax-
Exempt Bonds of such series not to have their Tax-Exempt
Bonds redeemed or purchased. Provision may be made, as to
any such series of Tax-Exempt Bonds, for extension of the
term of such letter of credit or for the replacement
thereof, upon its expiration or termination, by another
letter of credit (having substantially the same terms as the
original letter of credit) from the Bank or another bank.
Such extended or replacement letters of credit will expire
not later than the final maturity date of the related Tax-
Exempt Bonds.
12. In order to secure the Company's obligations under the
Facilities Agreement and/or, in the event the Company enters
into a Reimbursement Agreement, under the Reimbursement
Agreement, the Company may grant to the Issuer, the Trustee
and/or the Bank, a lien, subordinate to the lien of the
Mortgage on the Facilities or other assets of the Company
(the "Subordinate Lien").
13. In addition or as an alternative to the security
provided by a letter of credit or the Subordinate Lien, in
order to obtain a more favorable rating on one or more
series of Tax-Exempt Bonds and improve the marketability
thereof, the Company may provide (a) an insurance policy for
the payment of the principal of and/or interest and/or
premium on one or more series of Tax-Exempt Bonds, and/or
(b) security for the holders of Tax-Exempt Bonds and/or the
Bank through the issuance and pledge of one or more new
series of Collateral Bonds. Premiums on such insurance
policies will not exceed premiums generally obtainable at
the time of entering into the insurance arrangements by
companies of comparable credit quality on insurance policies
having comparable terms. Collateral Bonds would be issued
and delivered to the Trustee under the Indenture and/or the
Bank and/or the Issuer to evidence, in part, and secure the
Company's obligations under the applicable Facilities
Agreement and/or the Company's obligations to reimburse the
Bank under the Reimbursement Agreement. The principal
amount of and interest rate borne by the Collateral Bonds
could be determined in several ways. Firstly, if the series
of Tax-Exempt Bonds bears a fixed interest rate, Collateral
Bonds can be issued in a principal amount equal to the
principal amount of such series and bear interest at a rate
equal to the rate of interest on such series. Secondly, non-
interest bearing Collateral Bonds can be issued in a
principal amount equivalent to the principal amount of such
series plus an amount equal to interest thereon for a
specified period. Thirdly, Collateral Bonds can be issued
in a principal amount equivalent to the principal amount of
such series plus an amount equal to interest on such series
for a specified period, but carry a fixed interest rate that
will be lower than the fixed interest rate of the series of
Tax-Exempt Bonds. Fourthly, Collateral Bonds can be issued
in a principal amount equivalent to the principal amount of
the series of Tax-Exempt Bonds at an adjustable rate of
interest, varying with the rate of interest borne by such
series of Tax-Exempt Bonds but having a "cap" (not greater
than 13%) above which the interest on Collateral Bonds can
not rise. For further information with respect to the
Reimbursement Agreement, the proposed insurance arrangements
and the Collateral Bonds, reference is made to Exhibits A-3,
A-5 and B-12. The Company will not use a combination of
letter of credit, insurance arrangements, Collateral Bonds
and/or Subordinate Liens to secure any series of Tax-Exempt
Bonds unless the resulting effective interest cost savings
on such series is greater than the total cost of providing
such additional security.
14. Each series of the Collateral Bonds that bear interest
will bear interest at a fixed interest rate or initial
adjustable interest rate not to exceed 13%. The maximum
aggregate principal amount of the Collateral Bonds would be
$52 million, which will be in addition to the aggregate
limitation on the Bonds and/or Debentures authorized in
Sections B and C above. The terms of the Collateral Bonds
relating to maturity, interest payment dates, if any,
redemption provisions and acceleration will correspond to
the terms of the related Tax-Exempt Bonds. The terms of
each series of the Collateral Bonds will not vary during the
life of such series except for the interest rate of any such
series that bears interest at an adjustable rate.
15. For further information with respect to the terms of
the Facilities Agreement and Indenture, reference is made to
Exhibits B-5 and B-6.
16. Each series of Tax-Exempt Bonds may be sold by the
Issuer pursuant to arrangements with an underwriter or a
group of underwriters or by private placement in a
negotiated sale or sales. While the Company may not be
party to the underwriting or placement arrangements, such
arrangements will assure that the terms of each series of
Tax-Exempt Bonds, and their sale by the Issuer(s), are
satisfactory to the Company, and the Company will provide
certain related representations and certain indemnities for
liabilities arising from material misstatements or omissions
in disclosures made by the Company in connection with the
issuance of Tax-Exempt Bonds. The Company anticipates that
interest payable on Tax-Exempt Bonds (except for interest on
any Tax-Exempt Bond during a period in which it is held by a
person who is a "substantial user" of the Facilities or a
"related person" within the meaning of Section 147(a) of the
Internal Revenue Code of 1986, as amended) will not be
includable in the gross income of the holders thereof for
certain state income tax purposes and for federal income tax
purposes under provisions of such Code. The interest rates
on tax-exempt bonds have been, and are expected to be, lower
than the interest rates on bonds of similar tenor,
maturities and quality, on which interest is subject to
federal income tax.
Section H. Issuance and Sale of Municipal Securities
1. The Company may also seek to enter into arrangements
for the issuance of up to $100,000,000 aggregate principal
amount of Municipal Securities. The Company proposes from
time to time through December 31, 2005 to enter into one or
more agreements, either directly or through an affiliate of
the Company, with such governmental authority as may be
authorized by state or local law (collectively referred to
herein as the "Municipal Entity"), whereby the Municipal
Entity will issue securities to the public on behalf of the
Company or will loan money to the Company through a bank, an
affiliate of the Company, or other person, where the
proceeds of such financing will be used to pay certain of
the Company's costs. The Company will enter into such
arrangements to benefit from certain tax exemptions offered
by a state or local taxing authority. Certain purchasers of
Municipal Securities may benefit from state or local income
tax exemptions on interest they receive from the Municipal
Securities.
2. The proceeds of the sale of Municipal Securities, net
of any underwriters' discounts or other expenses payable
from proceeds, will be applied to finance certain costs of
the Company. The Municipal Entity will agree to pay to the
Company an amount equal to the proceeds of the Municipal
Securities. Pursuant to the provisions of an agreement
between the Company and the Municipal Entity, the Company
will be obligated to make payments sufficient to provide for
payment by the Municipal Entity of the principal or
redemption price of, premium (if any) and interest on, and
other amounts owing with respect to the Municipal
Securities, together with related expenses.
3. Each series of Municipal Securities will mature not
earlier than one year nor later than fifty years from the
date of issuance. The Municipal Securities may be subject
to optional or mandatory redemption by the Municipal Entity,
at the direction of the Company, in whole or in part at the
redemption prices (expressed as percentages of the principal
amount thereof) plus accrued interest to the redemption
date, and at the times, as are set forth in the agreement
relating thereto. Any series of Municipal Securities may be
made subject to a mandatory cash sinking fund under which
certain principal amounts and/or specific portions of
Municipal Securities of such series are to be retired at
stated times, and may be subject to mandatory redemption in
certain other cases. The payments by the Company under the
related agreement with the related Municipal Entity in such
circumstances shall be sufficient (together with any other
moneys held by any person relating to such Municipal
Securities and available therefor) to pay the principal of
all Municipal Securities to be redeemed or retired, the
premium (if any) and interest accrued or to accrue to the
redemption date thereon.
4. The agreement between the Municipal Entity and the
Company may provide for a fixed and/or an adjustable
interest rate for one or more series of Municipal
Securities. No series of Municipal Securities will be sold
if the fixed interest rate or initial adjustable interest
rate thereon would exceed 15% per annum. The initial
interest rate for Municipal Securities of a series having an
adjustable interest rate will be determined in negotiations
between the Company and the purchasers of such series. For
each Rate Period thereafter, the interest rate on such
Municipal Securities will be a rate which, when set, will be
sufficient to remarket the Municipal Securities of such
series at a price equal to their principal amount. Such
subsequent interest rates will not exceed 15% per annum.
5. The term "Rate Period", as used herein, refers to a
period during which the interest rate on Municipal
Securities of a particular series, while bearing an
adjustable rate (or method of determination of such interest
rate), is fixed. The initial Rate Period will commence on
the date when interest begins to accrue on the Municipal
Securities of such series. The length of each Rate Period
would be not less than one day nor more than thirty years.
6. The agreement between the Company and the Municipal
Entity may provide that the holders of Municipal Securities
will have the right to tender or be required to tender their
Municipal Securities and have them purchased at a price
equal to the principal amount thereof, plus any accrued and
unpaid interest thereon, on certain dates, or on dates to be
established. A Tender Agent may be appointed to facilitate
the tender of Municipal Securities by holders thereof. Any
holders of Municipal Securities wishing to have such
Municipal Securities purchased may be required to deliver
the same during a specified period of time preceding such
purchase date to the Tender Agent, if one shall be
appointed, or to the Remarketing Agent appointed to reoffer
such tendered Municipal Securities for sale.
7. Under the agreement between the Company and the
Municipal Entity, the Company will be obligated to pay
amounts equal to the amounts to be paid by the Remarketing
Agent or the Tender Agent for the purchase of Municipal
Securities so tendered, such amounts to be paid by the
Company on the dates when payments by the Remarketing Agent
or the Tender Agent are to be made; provided, however, that
the obligation of the Company to make any such payment under
such agreement will be reduced by the amount of any other
moneys available therefor, including the proceeds of the
sale of tendered Municipal Securities by the Remarketing
Agent.
8. Upon the delivery of Municipal Securities by holders to
the Remarketing Agent or the Tender Agent for purchase, the
Remarketing Agent will be obligated to use its best efforts
to sell such Municipal Securities at a price equal to the
principal amount thereof.
9. In order to obtain a more favorable rating on any
series of Municipal Securities, and thereby improve the
marketability thereof, the Company may arrange for one or
more irrevocable letter(s) of credit for an aggregate amount
up to $115 million from one or more banks (individually and
collectively the "Bank"). In that event, payments with
respect to principal, premium, if any, interest and purchase
obligations in connection with such series of Municipal
Securities coming due during the term of such letter of
credit, which will not exceed ten years, will be secured by,
and payable from funds (if any) drawn under, the letter of
credit. To induce the Bank to issue such letter of credit,
the Company would enter into one or more reimbursement
agreements ("Reimbursement Agreement") with the Bank
pursuant to which the Company will agree to reimburse the
Bank for all amounts drawn under such letter of credit
within a specified period (not to exceed sixty months) after
the date such funds are drawn and with interest thereon at a
rate that will not exceed the Bank's prime commercial
lending rate plus 2%. The terms of the Reimbursement
Agreement will correspond to the terms in the letter of
credit.
10. It is anticipated that the Reimbursement Agreement
would require the payment in advance by the Company to the
Bank of letter of credit arrangement fees not to exceed 1%
of the face amount of the letter of credit and annual fees
not to exceed 2% of the face amount of the letter of credit.
Any such letter of credit will expire or be terminable prior
to the maturity date of the series of Municipal Securities
that such letter of credit supports and, in connection with
such expiration or termination, such series of Municipal
Securities can be made subject to mandatory redemption or
purchase on or prior to the date of expiration or
termination of such letter of credit, subject to the rights
of owners of Municipal Securities of such series not to have
their Municipal Securities redeemed or purchased. Provision
may be made, as to any such series of Municipal Securities,
for extension of the term of such letter of credit or for
the replacement thereof, upon its expiration or termination,
by another letter of credit (having substantially the same
terms as the original letter of credit) from the Bank or
another bank. Such extended or replacement letters of
credit will expire not later than the final maturity date of
the related Municipal Securities.
11. In order to secure the Company's obligations under the
agreement with the Municipal Entity and/or, in the event the
Company enters into a Reimbursement Agreement, under the
Reimbursement Agreement, the Company may grant a lien,
subordinate to the lien of the Mortgage on certain assets of
the Company (the "Municipal Subordinate Lien").
12. In addition or as an alternative to the security
provided by a letter of credit or the Municipal Subordinate
Lien, in order to obtain a more favorable rating on one or
more series of Municipal Securities and improve the
marketability thereof, the Company may provide (a) an
insurance policy for the payment of the principal of and/or
interest and/or premium on one or more series of Municipal
Securities, and/or (b) security for the holders of Municipal
Securities and/or the Bank through the issuance and pledge
of one or more new series of first mortgage bonds
("Municipal Collateral Bonds"). Premiums on such insurance
policies will not exceed premiums generally obtainable at
the time of entering into the insurance arrangements by
companies of comparable credit quality on insurance policies
having comparable terms. Municipal Collateral Bonds would
be issued and delivered to evidence, in part, and secure the
Company's obligations under the applicable agreement between
the Company and the Municipal Entity and/or the Company's
obligations to reimburse the Bank under the Reimbursement
Agreement. The principal amount of and interest rate borne
by the Municipal Collateral Bonds could be determined in
several ways. Firstly, if the series of Municipal
Securities bears a fixed interest rate, Municipal Collateral
Bonds can be issued in a principal amount equal to the
principal amount of such series and bear interest at a rate
equal to the rate of interest on such series. Secondly, non-
interest bearing Municipal Collateral Bonds can be issued in
a principal amount equivalent to the principal amount of
such series plus an amount equal to interest thereon for a
specified period. Thirdly, Municipal Collateral Bonds can
be issued in a principal amount equivalent to the principal
amount of such series plus an amount equal to interest on
such series for a specified period, but carry a fixed
interest rate that will be lower than the fixed interest
rate of the series of Municipal Securities. Fourthly,
Municipal Collateral Bonds can be issued in a principal
amount equivalent to the principal amount of the series of
Municipal Securities at an adjustable rate of interest,
varying with the rate of interest borne by such series of
Municipal Securities but having a "cap" (not greater than
15%) above which the interest on Municipal Collateral Bonds
can not rise. The Company will not use a combination of
letter of credit, insurance arrangements, Municipal
Collateral Bonds and/or Municipal Subordinate Liens to
secure any series of Municipal Securities unless the
resulting effective interest cost savings on such series is
greater than the total cost of providing such additional
security.
13. Each series of the Municipal Collateral Bonds that bear
interest will bear interest at a fixed interest rate or
initial adjustable interest rate not to exceed 15%. The
maximum aggregate principal amount of the Municipal
Collateral Bonds would be $115 million, which will be in
addition to the aggregate limitation on the Bonds and/or
Debentures authorized in Sections B and C above. The terms
of the Municipal Collateral Bonds relating to maturity,
interest payment dates, if any, redemption provisions and
acceleration will correspond to the terms of the related
Municipal Securities. The terms of each series of the
Municipal Collateral Bonds will not vary during the life of
such series except for the interest rate of any such series
that bears interest at an adjustable rate.
14. Each series of Municipal Securities may be sold by the
Municipal Entity pursuant to arrangements with an
underwriter or a group of underwriters or by private
placement in a negotiated sale or sales or through a private
transaction with a banking organization or through a
transaction with an affiliate of the Company. While the
Company may not be party to the underwriting or placement
arrangements, such arrangements will assure that the terms
of each series of Municipal Securities, and their sale by
the Municipal Entity, are satisfactory to the Company, and
the Company will provide certain related representations and
certain indemnities for liabilities arising from material
misstatements or omissions in disclosures made by the
Company in connection with the issuance of Municipal
Securities. The Company anticipates that interest payable
on Municipal Securities may receive may not be includable in
the gross income of the holders thereof for certain state
income tax purposes.
Section I. Other
1. The proceeds to be received from the issuance and sale
of the Bonds, Debentures, Entity Interests, Preferred and
Tax-Exempt Bonds will not be used to invest directly or
indirectly in an exempt wholesale generator ("EWG") or
foreign utility company ("FUCO"), as defined in Sections 32
or 33, respectively, of the Holding Company Act. If the
proceeds of such sales are used to refund outstanding
securities, any savings derived from the refunding
transaction will not be used to acquire or otherwise invest
in an EWG or FUCO. Information with respect to Entergy's
EWG investments will be supplied by amendment.
2. The proposed transactions are also subject to Rule 54.
In determining whether to approve the issue or sale of a
security by a registered holding company for purposes other
than the acquisition of an EWG or FUCO, or other
transactions by such registered holding company or its
subsidiaries other than with respect to EWGs or FUCOs, the
Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG
or FUCO upon the registered holding company system if Rules
53(a), (b) and (c) are satisfied. In that regard, assuming
consummation of the transactions proposed in this
application, all of the conditions set forth in Rule 53(a)
are and will be satisfied and none of the conditions set
forth in Rule 53(b) exists or, as a result thereof, will
exist.
3. Entergy states that for purposes of Rule 53 (a)(1) its
"aggregate investment" in EWGs and FUCOs was approximately
$1,047,322,020, representing approximately 36.63% of Entergy's
consolidated retained earnings as of June 30, 2000. Furthermore,
Entergy has complied with and will continue to comply with the
record keeping requirements of Rule 53(a)(2) concerning
affiliated EWGs and FUCOs. In addition, as required by Rule
53(a)(3), no more than 2% of the employees of Entergy's domestic
public utility subsidiary companies would render services to
affiliated EWGs and FUCOs. Finally, none of the conditions set
forth in Rule 53(b), under which the provisions of Rule 53 would
not be available, have been met.
4. The Company will maintain its common equity as a
percentage of capitalization no less than 30%.
Item 2. Fees, Commissions and Expenses.
The fees, commissions and expenses, other than those of the
underwriters, to be incurred in connection with the issuance
and sale of Bonds or Debentures are not expected to exceed
the following:
Initial Sale Each Additional
Sale
Registration Statement $ 142,560 $ --
Application-Declaration 2,000 --
*Rating Agencies' fees 25,000 25,000
*Trustees' fees 7,000 3,000
*Fees of Company's Counsel:
Wise Carter Child & Caraway,
Professional Association 20,000 10,000
Thelen Reid & Priest LLP 45,000 30,000
*Fees of Entergy Services, Inc. 30,000 25,000
*Accountants' fees 18,000 12,000
*Printing and engraving costs 25,000 20,000
*Miscellaneous expenses
(including blue-sky expenses) 25,000 15,000
----------------------------
*Total Expenses $ 349,560 $ 140,000
============================
_________________
*Estimated
The fees, commissions and expenses, other than those of
the underwriters, to be incurred in connection with the
issuance and sale of Preferred are not expected to exceed
the following:
Initial Sale Each Additional
Sale
**Registration Statement $ 13,200 $ --
*Rating Agencies' fees 25,000 25,000
*Trustees' fees 7,000 3,000
*Fees of Company's Counsel:
Wise Carter Child & Caraway,
Professional Association 20,000 10,000
Thelen Reid & Priest LLP 45,000 30,000
*Fees of Entergy Services, Inc. 30,000 25,000
*Accountants' fees 18,000 12,000
*Printing and engraving costs 25,000 20,000
*Miscellaneous expenses
(including blue-sky expenses) 25,000 15,000
---------------------------
*Total Expenses $ 208,200 $ 140,000
===========================
_________________
*Estimated
**Divided with Registration Statement fee for Entity
Interests below.
The fees, commissions and expenses, other than those of
the underwriters, to be incurred in connection with the
issuance and sale of the Entity Interests are not expected
to exceed the following:
Initial Sale Each Additional
Sale
**Registration Statement $ 13,200 $ --
*Rating Agencies' fees 40,000 40,000
*Trustees' fees 25,000 10,000
*Fees of Company's Counsel:
Wise Carter Child & Caraway,
Professional Association 35,000 25,000
Thelen Reid & Priest LLP 45,000 30,000
*Fees of Entergy Services, Inc. 35,000 25,000
*Accountants' fees 22,000 16,000
*Printing and engraving costs 40,000 40,000
*Miscellaneous expenses
(including blue-sky expenses) 65,000 34,000
----------------------------
*Total Expenses $ 320,200 $ 220,000
============================
_________________
*Estimated
**Divided with Registration Statement fee for Preferred above.
The fees and expenses to be incurred in connection with
the issuance and sale of the Tax-Exempt Bonds (including the
expenses related to the issuance and pledge of the
Collateral Bonds) are estimated not to exceed the following:
Initial Sale Each Additional
Sale
*Rating Agencies' fees $ 35,000 $ 35,000
*Trustees' fees 35,000 35,000
*Fees of Bond Counsel 60,000 40,000
*Fees of Company's Counsel:
Wise Carter Child & Caraway,
Professional Association 35,000 25,000
Thelen Reid & Priest LLP 40,000 30,000
*Fees of Entergy Services, Inc. 30,000 20,000
*Accountants' fees 10,000 10,000
*Printing and engraving costs 20,000 20,000
*Miscellaneous expenses
(including blue-sky expenses) 25,000 25,000
----------------------------
*Total Expenses $ 290,000 $ 240,000
_________________ ============================
*Estimated
The fees, commissions and expenses of the underwriters
expected to be incurred with respect to the Bonds,
Debentures (other than Debentures issued under the
Subordinated Debenture Indenture), Preferred or Tax-Exempt
Bonds will not exceed 2%, and with respect to Debentures
issued under the Subordinated Debenture Indenture or Entity
Interests, 3.25%, of the principal amount of the Bonds,
Debentures, Entity Interests, Preferred or Tax-Exempt Bonds,
respectively, to be sold.
Item 3. Applicable Statutory Provisions
Section A. Bonds, Debentures, Entity Interests, Preferred
and Municipal Securities
The Company believes that Sections 6(a) and 7 of the Holding
Company Act and Rules 23 and 24 thereunder apply to the
proposed issuance(s) and sale(s) of Bonds, Debentures,
Entity Interests, Entity Subordinated Debentures, Guaranty,
Preferred and Municipal Securities, and to the potential
exchange of Entity Interests for Entity Subordinated
Debentures.
The Company believes that Sections 9(a), 10 and 12(b) of the
Holding Company Act and Rule 45 thereunder apply to the
formation of the Issuing Entity, the acquisition of either
general partnership interests (in the case of a limited
partnership) or voting interests (in the case of a business
trust) in the Issuing Entity, the Company's equity
contributions to the Issuing Entity, the Company's potential
acquisition of shares of the capital stock of the
Participating Subsidiary, the acquisition by the
Participating Subsidiary of voting interests in the Issuing
Entity, the Issuing Entity's acquisition of the Entity
Subordinated Debentures and the Guaranty.
Section B. Amendment of Articles
In the event the Company undertakes any amendment of the
Articles to create a new class of Preferred and a Proxy
solicitation relating thereto, it believes that Sections
6(a)(2), 7 and 12(e) of the Holding Company Act and Rules
23, 24, 62 and 65 thereunder will apply.
Section C. Tax-Exempt Financing
The Sections of the Holding Company Act and the rules
thereunder which the Company considers may be applicable to
the tax-exempt financing of the Facilities are set forth
below:
(i) Disposition of the Section 12(d) and
Facilities Rule 44
(ii) Reacquisition of the Sections 9(a) and 10
Facilities
(iii) Reimbursement Agreement Sections 6(a) and 7
(iv) Issuance and Pledge of Sections 6(a) and 7
Collateral Bonds
(v) Facilities Agreement in Sections 6(a) and 7
connection with refunding
Item 4. Regulatory Approval
No state regulatory body or agency and no federal commission
or agency other than this Commission has jurisdiction over
the transactions proposed herein.
Item 5. Procedure
1. The Company requests that the Commission's notice of
proposed transactions published pursuant to Rule 23(e) be
issued as soon as possible. The Company further requests
that the Commission's order authorizing the issuance and
sale of Bonds, Debentures, Entity Interests, Preferred and
Municipal Securities, and the acquisition of certain Tax-
Exempt Bonds for on behalf of the Company, as described in
Item 1, be entered by December 31, 2000, at which time the
Company's existing financing authority from the Commission
will expire. The Company consents that the Commission's
order authorizing the above transactions may reserve
jurisdiction over (i) the execution and performance under
any Reimbursement Agreement underlying any Letter of Credit
issued as security for the Company's obligations in
connection with the issuance and sale of Tax-Exempt Bonds
and (ii) the proposed amendment to the Articles and
solicitation of Proxy relating to such amendment, each in
connection with the creation of a new class of Preferred
(but not the existing authorized, unissued shares of
Preferred), pending completion of the record by the filing
of the documents relating thereto. Upon the completion of
each transaction involving the issuance and sale of Bonds,
Debentures, Entity Interests, Preferred, Municipal
Securities and/or Tax-Exempt Bonds, the Company shall file a
Certificate pursuant to Rule 24 with copies of the executed
documents relating thereto as exhibits.
2. The Company hereby waives a recommended decision by a
hearing officer or any other responsible officer of the
Commission; agrees that the Staff of the Division of
Investment Management may assist in the preparation of the
Commission's decision; and requests that there be no waiting
periods between the issuance of the Commission's orders and
the dates on which they are to become effective.
Item 6. Exhibits and Financial Statements.
Section A. Exhibits:
*A-1 Mortgage and Deed of Trust, dated as of
February 1, 1988, as amended by fifteen
supplemental indentures (filed, respectively,
as the exhibits and in the file numbers
indicated: A-2(a)-2 to Rule 24 Certificate in
File No. 70-7461 (Mortgage); A-2(b)-2 in File
No. 70-7461 (First); A-5(b) to Rule 24
Certificate in File No. 70-7419 (Second); A-
4(b) to Rule 24 Certificate in File No. 70-7554
(Third); A-1(b)-1 to Rule 24 Certificate in
File No. 70-7737 (Fourth); A-2(b) to Rule 24
Certificate dated November 24, 1992 in File No.
70-7914 (Fifth); A-2(e) to Rule 24 Certificate
dated January 22, 1993 in File No. 70-7914
(Sixth); A-2(g) to Form U-1 in File No. 70-7914
(Seventh); A-2(i) to Rule 24 Certificate dated
November 10, 1993 in File No. 70-7914 (Eighth);
A-2(j) to Rule 24 Certificate dated July 22,
1994 in File No. 70-7914 (Ninth); A-2(l) to
Rule 24 Certificate dated April 21, 1995 in
File No. 70-7914 (Tenth); A-2(a) to Rule 24
Certificate dated June 27, 1997 in File 70-8719
(Eleventh); A-2(b) to Rule 24 Certificate dated
April 16, 1998 in File 70-8719 (Twelfth); A-
2(c) to Rule 24 Certificate dated May 12, 1999
in File No. 70-8719 (Thirteenth); A-3(a) to
Rule 24 Certificate dated June 8, 1999 in File
No. 70-8719 (Fourteenth); and A-2(d) to Rule
24 Certificate dated February 24, 2000 in File
No. 70-8719 (Fifteenth)).
*A-2 Proposed form(s) of additional Supplemental
Indenture(s) relating to the Bonds (filed as
Exhibit A-2 in File No. 70-8719).
*A-3 Proposed form(s) of additional Supplemental
Indenture(s) relating to the Collateral Bonds
(filed as Exhibit A-3 in File No. 70-8719).
*A-4 Proposed form(s) of Bond (filed as Exhibit A-4
in File No. 70-8719).
*A-5 Proposed form(s) of Collateral Bond (filed as
Exhibit A-5 in File No. 70-8719).
*A-6 Restated Articles of Incorporation, as amended
through November 12, 1999 (filed as Exhibit
3(i)(f) to Form 10-K for the year ended
December 31, 1999).
**A-7 Proposed form(s) of Articles of Amendment to
Restated Articles of Incorporation, as amended,
establishing new class of preferred stock, if
any.
*A-8 Proposed form(s) of Articles of Amendment to
Restated Articles of Incorporation, as amended,
establishing series of the Preferred (filed as
Exhibit A-8 in File No. 70-8719).
*A-9 By-laws, as currently in effect (filed as
Exhibit 3(ii)(f) to Form 10-K for the year
ended December 31, 1999).
*A-10 Proposed form(s) of Preferred Certificate
relating to fixed dividend rate stock (filed as
Exhibit A-10 in File No. 70-8719).
*A-11 Proposed form(s) of Preferred Certificate
relating to adjustable dividend rate stock
(filed as Exhibit No. A-11 in File No. 70-
8719).
*A-12 Proposed form(s) of Debenture Indenture (filed
as Exhibit No. A-12 in File No. 70-8719).
*A-13 Proposed form(s) of Debenture (filed as Exhibit
A-13 in File No. 70-8719).
*A-14 Proposed form(s) of Subordinated Debenture
Indenture (filed as Exhibit A-14 in File No. 70-
8719).
*A-15 Proposed form(s) of Subordinated Debenture
(filed as Exhibit A-15 in File No. 70-8719).
*A-16 Proposed form(s) of Entity Subordinated
Debenture Indenture (filed as Exhibit A-16 in
File No. 70-8719).
*A-17 Proposed form(s) of Entity Subordinated
Debenture (filed as Exhibit A-17 in File No. 70-
8719).
**A-18 Proposed form(s) of Entity Agreement of the
Issuing Entity, including the proposed form(s)
of Entity Interests.
**A-19 Proposed form(s) of Guaranty (if applicable).
*B-1 Proposed form of letter to prospective
purchasers relating to proposals for the
purchase of Bonds (filed as Exhibit B-1 in File
No. 70-8719).
*B-2 Proposed form(s) of agreement for sale(s) of
Bonds (filed as Exhibit B-2 in File No. 70-
8719).
*B-3 Proposed form of letter to prospective
purchasers relating to proposals for the
purchase of Preferred (filed as Exhibit B-3 in
File No. 70-8719).
**B-4 Proposed form(s) of agreement for sale(s) of
Preferred.
*B-5 Proposed form(s) of Indenture (filed as Exhibit
B-5 in File No. 70-8719).
*B-6 Proposed form(s) of Facilities Agreement (filed
as Exhibit B-6 in File No. 70-8719).
**B-7 Proposed form(s), if any, of Second Mortgage.
*B-8 Proposed form of letter to prospective
purchasers relating to proposals for the
purchase of Debentures (filed as Exhibit B-8 in
File No. 70-8719).
*B-9 Proposed form(s) of agreement for sale(s) of
Debentures (filed as Exhibit B-9 in File No. 70-
8719).
**B-10 Proposed form of letter to prospective
purchasers relating to proposals for the
purchase of Entity Interests.
**B-11 Proposed form(s) of agreement for sale(s) of
Entity Interests.
**B-12 Proposed form(s) of Reimbursement Agreement.
*C-1 Registration Statement No. 333-64023 relating
to Bonds (filed in Registration No. 333-64023).
**C-2 Proposed form of Registration Statement
relating to Debentures.
**C-3 Proposed form of Registration Statement
relating to Subordinated Debentures.
**C-4 Proposed form of Registration Statement
relating to Entity Subordinated Debentures and
Entity Interests.
D Inapplicable.
E Inapplicable.
F-1 Opinion of Wise Carter Child & Caraway,
Professional Association.
F-2 Opinion of Thelen Reid & Priest LLP.
***H-l Suggested form of notice of proposed
transactions for publication in the Federal
Register.
**H-2 Form of Proxy Statement with respect to
amendment of Articles (if any).
**H-3 Form of Proxy (if any).
_________________________
* Incorporated herein by reference as indicated.
** To be filed by amendment.
*** Previously filed.
Section B. Financial Statements
Financial Statements of the Company as of December 31, 1999
and September 30, 2000.
Financial Statements of Entergy Corporation and
subsidiaries, consolidated, as of December 31, 1999 and
September 30, 2000.
Notes to financial statements of the Company and Entergy
Corporation and subsidiaries. See the Annual Reports on
Form 10-K for the fiscal year ended December 31, 1999 and
the Quarterly Reports on Form 10-Q for the quarterly period
ended September 30, 2000 of the Company and Entergy (filed
in File Nos. 0-320 and 1-11299, respectively, and
incorporated by reference to the above referenced financial
statements and notes thereto).
Except as reflected in the Financial Statements, no material
changes not in the ordinary course of business have taken
place since September 30, 2000.
Item 7. Information as to Environmental Effects
(a) As stated in Item 5, the Company would appreciate
receiving the order of the Commission in this File
authorizing, subject to the reservations of jurisdiction set
forth above, the transactions proposed herein by December
31, 2000. As more fully described in Item 1, the proposed
transactions subject to the jurisdiction of the Commission
relate only to the financing activities of the Company and
do not involve a major federal action having a significant
impact on the human environment.
(b) Not applicable.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this Pre-effective Amendment No. 1 to the Application-
Declaration to be signed on its behalf by the undersigned
thereunto duly authorized.
ENTERGY MISSISSIPPI, INC.
By: /s/ Steven C. McNeal
Steven C. McNeal
Vice President and Treasurer
Dated: November 21, 2000
