Pricing Supplement No. 7 Filing under Rule 424(b)(3)
Dated: March 31, 1998 Registration No. 333-17181
(To Prospectus, dated December 12, 1996)
$150,000,000
The Montana Power Company
Medium-Term Notes, Series B
Principal Amount: $60,000,000 Initial Interest Rate: 5.95703%
Issue Price: 100.00% Interest Payment Period: Quarterly
Selling Agent's Commission: .350% Interest Reset Dates: Each Interest
Purchasing Agent's Discount: .350% Payment Date
Net Proceeds to Company: 99.650% Index Maturity: 3 Months
Reallowance: N/A Spread: +25 basis points
Selling Concession: N/A Record Dates: March 22, June 21,
Form: September 21 and December 22
Book-Entry (DTC) X
----- Redeemable: Yes X No
Certificated ----- ----
----- In Whole: Yes X No
Repayable at Option of Holder: ----- ----
Yes: No: X In Part: Yes X No
----- ----- ----- ----
Original Issue Date: April 6, 1998 Redemption Dates: April 6, 1999
Maturity Date: April 6, 2001 and each Interest Payment Date
Interest Payment Dates: April 6, thereafter
July 6, October 6 and January 6
Initial Interest Redemption Limitation Date: N/A
Payment Date: July 6, 1998
Redemption prices (if any): The Redemption Price shall be 100% of the
principal amount of such Notes to be redeemed.
Each of the Agents is placing $15,000,000 aggregate principal
amount of Notes as a Selling Agent, except that Morgan Stanley Dean
Witter is purchasing $15,000,000 aggregate principal amount of Notes
as a principal.
Prior to the date of this Pricing Supplement, the Company has
sold $55,000,000 aggregate principal amount of the Medium-Term Notes,
Series B.
Additional Terms: The Notes will bear interest as hereinafter
described.
N/A as used herein means "Not Applicable."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Selling Agent/Purchasing Agent:
(X) Goldman, Sachs & Co.
(X) J.P. Morgan & Co.
(X) Lehman Brothers
(X) Morgan Stanley Dean Witter
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PAYMENT OF INTEREST
Each Note will bear interest from its Original Issue Date to the
first Interest Reset Date for such Note at the Initial Interest Rate
set forth above. Thereafter, the interest rate on such Note for each
Interest Reset Period will be determined by reference to LIBOR plus
the Spread set forth above. The "Spread" is the number of basis
points (one basis point being equal to one one-hundredth of a
percentage point) specified above.
The interest rate on a Note will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by
U.S. law of general application. Under New York law currently in
effect, a business corporation may not use usury or the taking of more
than the lawful interest rate as a defense to any proceeding to
recover damages on, or enforce payment of, any obligation executed or
effected by such corporation.
The Company will appoint, and enter into an agreement with, an
agent (the "Calculation Agent") to calculate interest rates on the
Notes. Citibank, N.A. will be the Calculation Agent. All
determinations of interest rates by the Calculation Agent will, in the
absence of manifest error, be conclusive for all purposes and binding
on the Holders of the Notes.
Upon the request of the Holder of a Note, the Calculation Agent
will provide the interest rate in effect and, if determined, the
interest rate that will become effective as a result of the
determination made for the next succeeding Interest Reset Date.
The interest rate on each Note will be reset quarterly (such
period being the "Interest Reset Period" for such Note, and the first
day of each Interest Reset Period being an "Interest Reset Date"), as
specified above; and such interest rate, as so reset, will be
effective as of and for the related Interest Reset Date and for the
balance of the Interest Reset Period to but excluding the next
succeeding Interest Reset Date. The Interest Reset Dates will be each
Interest Payment Date. If an Interest Reset Date for any Note would
otherwise be a day that is not a Business Day, such Interest Reset
Date will be postponed to the next succeeding Business Day, except
that if such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business
Day.
Accrued interest for each Note will be calculated by multiplying
the principal amount of such Note by an accrued interest factor. Such
accrued interest factor will be computed by adding the interest
factors calculated for each day in the Interest Payment Period for
which accrued interest is being calculated. The interest factor
(expressed as a decimal) for each such day is computed by dividing the
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interest rate applicable to such day by 360. For purposes of making
the foregoing calculation, the interest rate in effect on any Interest
Reset Date will be the applicable rate as reset on such date. All
percentages resulting from any calculation of the rate of interest on
a Note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded
upward, and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent (with one-half of a
cent being rounded upward).
If, with respect to any Note, any Interest Payment Date other
than a redemption date or the Stated Maturity of principal is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, except that, if such next succeeding Business
Day is in the next succeeding calendar month, such Interest Payment
Date will be the next preceding Business Day. If a redemption date or
the Stated Maturity of principal is not a Business Day, payment of the
amounts due on such Note on such date in respect of principal,
premium, if any, and/or interest may be made on the next succeeding
Business Day; and if payment is made or duly provided for on such
Business Day, no interest shall accrue on such amounts for the period
from and after such redemption date or Stated Maturity of principal,
as the case may be, to such Business Day.
Each Note will bear interest for each Interest Reset Period at a
rate calculated with reference to LIBOR and the Spread specified in
the Note and above.
"LIBOR" for each Interest Reset Period will be determined by the
Calculation Agent and will be:
(a) the rate for deposits in United States dollars, for the
period of the Index Maturity commencing on such Interest Reset
Date that appears on the Designated LIBOR Page at approximately
11:00 a.m., London time, on the second London Banking Day (as
hereinafter defined) prior to such Interest Reset Date (a "LIBOR
Determination Date");
(b) with respect to a LIBOR Determination Date on which no
rate appears, the Calculation Agent will request the principal
London office of each of four major reference banks in the London
interbank market selected by the Calculation Agent, in its
discretion (after consultation with the Company), to provide the
Calculation Agent with its offered quotations for deposits in
United States dollars, for the period of the Index Maturity
commencing on the Interest Reset Date for such Interest Reset
Period and in a principal amount equal to an amount of not less
2
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than U.S.$1 million that is representative of a single
transaction in United States dollars in such market at such time,
to prime banks in the London interbank market at approximately
11:00 a.m., London time, on such LIBOR Determination Date; if at
least two such quotations are provided, LIBOR, in respect of such
LIBOR Determination Date, will be the arithmetic mean of such
quotations;
(c) if fewer than two such quotations are so provided,
LIBOR in respect of such LIBOR Determination Date will be the
arithmetic mean of the rates quoted by three major banks in The
City of New York selected by the Calculation Agent, in its
discretion (after consultation with the Company), at
approximately 11:00 a.m. on such LIBOR Determination Date, for
loans in United States dollars to leading European banks, for the
period of the Index Maturity commencing on the Interest Reset
Date for such Interest Reset Period and in a principal amount of
not less than U.S.$1 million that is representative of a single
transaction in United States dollars in such market at such time;
provided, however, that if fewer than three banks selected as
aforesaid by the Calculation Agent are quoting rates described
in this clause (c), LIBOR for such Interest Reset Period will be
the same as LIBOR for the immediately preceding Interest Reset
Period (or, if there was no such previous Interest Reset Period,
the rate of interest hereon for such Interest Reset Period shall
be the Initial Interest Rate).
"Designated LIBOR Page" means the display designated as "Page
3750" on the Dow Jones Market service (formerly, known as the Dow
Jones Telerate Service), or such other page as may replace Page 3750
on such service or such other successor service or services as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying London interbank offered rates
for U.S. dollar deposits.
"Business Day" means any day, other than a Saturday, Sunday or
other day on which banking institutions and trust companies in The
City of New York are generally authorized or obligated by law or
executive order to close, which is a London Banking Day. "London
Banking Day" means any day on which dealings in deposits in United
States dollars are transacted in the London Interbank market.
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