<PAGE>
Filed Pursuant to Rule 424(b)(5)
File No. 33-51593
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 28, 1995)
$250,000,000
NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)
--------------
7 1/8% FIRST MORTGAGE BONDS, SERIES DUE JULY 1, 2025
----------------
Interest Payable January 1 and July 1
-------------------
Interest on the 7 1/8% First Mortgage Bonds, Series due July 1, 2025 (the
"Offered Bonds") is payable
on January 1 and July 1 of each year, commencing January 1, 1996. The Offered
Bonds are not redeemable prior to maturity. See "Supplemental Description of
Offered Bonds".
The Offered Bonds will be represented by global bonds registered in the name
of a nominee of The Depository Trust Company, as depository ("DTC"). Beneficial
interests in the Offered Bonds will be shown on, and transfers thereof will be
effected only through, records maintained by DTC (with respect to participants'
interests) and its participants. Except as described in the accompanying
Prospectus, Offered Bonds in certificated form will not be issued in exchange
for the global bonds.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS (2) COMPANY (1)(3)
<S> <C> <C> <C>
Per Bond........................................... 99.068% .410% 98.658%
Total.............................................. $247,670,000 $1,025,000 $246,645,000
<FN>
(1) Plus accrued interest from July 1, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated expenses of $526,250 payable by the Company.
</TABLE>
-------------------
The Offered Bonds are offered subject to prior sale, when, as and if
delivered to and accepted by the Underwriters and subject to approval of certain
legal matters by counsel for the Underwriters. The Underwriters reserve the
right to withdraw, cancel or modify such offer and to reject orders in whole or
in part. It is expected that delivery of the Offered Bonds will be made through
the book-entry facilities of The Depository Trust Company in New York, New York
on or about July 7, 1995.
-------------------
PAINEWEBBER INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS
<PAGE>
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE 28, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED BONDS
OR ANY OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
-------------------
USE OF PROCEEDS
The net proceeds from the sale of $250,000,000 in aggregate principal amount
of the Offered Bonds will be added to the general funds of the Company and
applied to the redemption of (i) $98,000,000 aggregate principal amount of its
9 1/8% First Mortgage Bonds, Series due July 1, 2019 and (ii) $70,000,000
aggregate principal amount of its 9 3/8% First Mortgage Bonds, Series due June
1, 2020. The balance of the net proceeds will be used to repay short-term
borrowings.
SUPPLEMENTAL DESCRIPTION OF OFFERED BONDS
The following description of the particular terms of the Offered Bonds
supplements the description of the general terms and provisions of the New Bonds
set forth in the accompanying Prospectus under the caption "Description of New
Bonds," to which description reference is hereby made. The following brief
summaries of certain provisions contained in the Supplemental Trust Indenture,
dated June 1, 1995, relating to the Offered Bonds (the "New Supplemental
Indenture") do not purport to be complete, use certain terms defined in the New
Supplemental Indenture, and are qualified in their entirety by express reference
to the provisions of the New Supplemental Indenture. Capitalized words not
defined herein are used as defined in the accompanying Prospectus or the New
Supplemental Indenture.
GENERAL
Interest on the Offered Bonds at the annual rate set forth on the cover page
of this Prospectus Supplement will accrue from July 1, 1995, and is to be
payable semi-annually on January 1 and July 1, beginning January 1, 1996.
Subject to certain exceptions, the New Supplemental Indenture provides for the
payment of interest on the interest payment date only to persons in whose names
the Offered Bonds are registered on the Record Date (the December 21 prior to
January 1 and the June 20 prior to July 1 unless any Record Date is not a
Business Day, in which event the Record Date will be the next preceding Business
Day).
REDEMPTION AND SINKING FUND PROVISIONS
The Offered Bonds will not be redeemable prior to maturity and will not be
subject to a sinking fund.
BOOK-ENTRY BONDS
The Offered Bonds will be issued initially as global securities and,
accordingly, will be represented by two fully-registered global securities (the
"Global Securities") in the aggregate principal amount of the Offered Bonds. The
Global Securities will be deposited with, or on behalf of, DTC, or its
successor, as depository (the "Depository"), and registered in the name of the
Depository or a nominee of the Depository.
So long as the Depository, or its nominee, is the registered owner of a
Global Security, such Depository or such nominee, as the case may be, will be
considered the owner of such Global Security for all purposes, including any
notices and voting. Except in the circumstances described below, the owners of
beneficial interests in a Global Security will not be entitled to have any
individual Offered Bonds registered in their names, will not receive or be
entitled to receive physical delivery of any such Offered Bonds and will not be
considered the owners of Offered Bonds under the Indenture. Accordingly, each
person holding a beneficial interest in a Global Security must rely on the
procedures of the Depository and, if such person is not a Direct Participant (as
defined below), on procedures of the Direct Participant through which such
person holds its interest, to exercise any of the rights of a registered owner
of such Offered Bonds.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed, the Company will issue
individual securities in certificated form ("Certificated Securities") in
exchange for the Global Security or Global Securities representing the
corresponding book-entry Offered Bonds represented by one or more Global
Securities and, in such event, will issue Certificated Securities in exchange
for the Global Securities representing the corresponding book-entry Offered
Bonds. Further, in such event, an owner of a beneficial interest in a Global
Security representing book-entry Offered Bonds
S-2
<PAGE>
may, on terms acceptable to the Company and the Depository for such Global
Security, receive such book-entry Offered Bonds as Certificated Securities. In
any such instance, an owner of a beneficial interest in a Global Security
representing book-entry Offered Bonds will be entitled to physical delivery of
individual Certificated Securities equal in principal amount to such beneficial
interest and to have such Certificated Securities registered in the name of such
owner. Certificated Securities will be issued as fully registered Offered Bonds
in denominations of $1,000.
DTC will act as securities depository for the Global Securities. The Offered
Bonds will be registered in the name of Cede & Co. (DTC's partnership nominee).
Two fully-registered Global Securities certificates will be issued in the
aggregate principal amount of the Offered Bonds, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of the Global Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for such purchases of
Global Securities on DTC's records. The ownership interest of each actual
purchaser of each Global Security ("Beneficial Owner") is in turn to be recorded
on the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Global Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Global Securities, except in the event that use
of the book-entry system for the Global Securities is discontinued.
To facilitate subsequent transfers, all Global Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of the Global Securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Global Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Global Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Global
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Global Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date. Payments
by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and
S-3
<PAGE>
will be the responsibility of such Participant and not of DTC, the Trustee, or
the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest on the Offered Bonds
represented by Global Securities to DTC is the responsibility of the Company or
the Trustee. Disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Global Securities at any time by giving reasonable notice to the
Company or the Trustee. Under such circumstances, if a successor securities
depository is not obtained, Offered Bonds in certificated form are required to
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC, and the Company and the Underwriters take no
responsibility for the accuracy thereof.
The Underwriters are Direct Participants of DTC.
None of the Company, the Trustee, or any agent for payment on or
registration of transfer or exchange of any Global Security will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in such Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Offered Bonds will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be made
by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Offered
Bonds will trade in the DTC's Same-Day Funds Settlement System until maturity or
until the Offered Bonds are issued in certificated form, and secondary market
trading activity in the Offered Bonds will therefore be required by DTC to
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading activity
in the Offered Bonds.
S-4
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated June 28, 1995 (the "Underwriting Agreement"), the Company has agreed to
sell to each of the Underwriters named below, and each of the Underwriters has
severally agreed to purchase, the principal amount of Offered Bonds set forth
opposite its name below:
<TABLE>
<CAPTION>
NAME AMOUNT
------------
<S> <C>
PaineWebber Incorporated........................................ $150,000,000
Donaldson, Lufkin & Jenrette Securities Corporation............. 50,000,000
Lehman Brothers................................................. 50,000,000
------------
Total..................................................... $250,000,000
------------
------------
</TABLE>
The Underwriting Agreement provides that the Underwriters are required to
take and pay for all of the Offered Bonds, if any are taken. The obligations of
the Underwriters are subject to certain conditions precedent set forth in the
Underwriting Agreement.
The Underwriters have advised the Company as follows:
The Underwriters propose to offer the Offered Bonds to the public
initially at the offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession
not in excess of .35% of the principal amount of such Offered Bonds. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of .25% to certain other dealers. After the Offered Bonds are
released for sale to the public, the public offering price and the
concessions to dealers may be changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments the Underwriters may be required to make in
respect thereof.
The Offered Bonds of this series are a new issue of securities with no
established trading market. The Company does not intend to apply for listing of
the Offered Bonds on a national securities exchange. The Underwriters have
advised the Company that they intend to make a market in the Offered Bonds but
they are not obligated to do so and may discontinue market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market of the Offered Bonds.
S-5
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
PROSPECTUS
NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)
FIRST MORTGAGE BONDS
------------
Northern States Power Company, a Minnesota corporation (the "Company"), may
offer for sale from time to time up to $250,000,000 aggregate principal amount
of its First Mortgage Bonds (the "New Bonds"), in one or more series, on terms
and in amounts to be determined at the time of sale. The aggregate principal
amount, rate or rates (or method of calculation) and time or times and place of
payment of interest, maturity or maturities, offering price, any redemption
terms or other specific terms of the series of New Bonds in respect of which
this Prospectus is being delivered (the "Offered Bonds") will be set forth in a
supplement to this Prospectus (the "Prospectus Supplement").
The Company may sell the New Bonds through underwriters or dealers, directly
to a limited number of institutional purchasers or through agents. See "Plan of
Distribution." The Prospectus Supplement will set forth the names of any
underwriters, dealers or agents involved in the distribution of the Offered
Bonds and any applicable commissions or discounts and the net proceeds to the
Company from such sale.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
THE DATE OF THIS PROSPECTUS IS JUNE 28, 1995
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER OR AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE NEW BONDS IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information on file can be inspected at the public
reference offices of the Commission currently at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, Chicago, Illinois 60661; and 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
In addition, reports, proxy material and other information concerning the
Company may be inspected at the Library of the New York Stock Exchange, 20 Broad
Street, New York, New York, at the office of the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, Illinois, and at the office of the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California, on which exchanges the
Company's Common Stock is listed. The Company is not required to, and does not,
provide annual reports to holders of its debt securities unless specifically
requested by a holder.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to the
Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1994;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995; and
3. The Company's Current Reports on Form 8-K dated January 30, 1995,
February 28, 1995, April 28, 1995 and June 27, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in the Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY
BENEFICIAL OWNER) TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO THE ASSISTANT SECRETARY, NORTHERN STATES POWER COMPANY,
414 NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55401 (612-330-5994).
2
<PAGE>
[LOGO]
Northern States Power Company (the "Company") was incorporated in 1909 under
the laws of Minnesota. Its executive offices are located at 414 Nicollet Mall,
Minneapolis, Minnesota 55401. (Phone 612-330-5500). The Company's subsidiaries
include Northern States Power Company, an operating public utility incorporated
in Wisconsin ("NSP-Wisconsin"), NRG Energy, Inc. ("NRG"), a Delaware
corporation, and Viking Gas Transmission Company, a Delaware corporation
("Viking"). The Company and its subsidiaries collectively are referred to herein
as NSP.
NSP is predominantly an operating public utility engaged in the generation,
transmission and distribution of electricity throughout a 49,000 square mile
service area and the distribution of natural gas in approximately 148
communities within this area. Viking is a regulated natural gas transmission
company that operates a 500-mile interstate natural gas pipeline. NRG is
primarily engaged in managing several of NSP's non-regulated energy
subsidiaries.
The Company serves customers in Minnesota, North Dakota and South Dakota.
NSP-Wisconsin serves customers in Wisconsin and Michigan. Of the approximately
three million people served by the Company and NSP-Wisconsin, the majority are
concentrated in the Minneapolis-St. Paul Metropolitan Area. In 1994, about 61
percent of NSP's electric retail revenue was derived from sales in the
Minneapolis-St. Paul Metropolitan Area and about 56 percent of gas revenues came
from sales in the St. Paul area. NSP's electric generation for 1994 was provided
for by coal (59%), nuclear (36%), and renewable and other fuels (5%). NSP
currently operates three nuclear units that were placed in service in 1971, 1973
and 1974. NSP has no additional nuclear units under construction.
PROPOSED MERGER
The Company, Wisconsin Energy Corporation, a Wisconsin corporation ("WEC"),
Northern Power Wisconsin Corp., a Wisconsin corporation and wholly-owned
subsidiary of the Company ("New NSP"), and WEC Sub Corp., a Wisconsin
corporation and wholly-owned subsidiary of WEC ("WEC Sub"), have entered into an
Agreement and Plan of Merger, dated as of April 28, 1995 (the "Merger
Agreement"), which provides for a strategic business combination involving NSP
and WEC in a "merger-of-equals" transaction (the "Transaction"). The
Transaction, which was unanimously approved by the Boards of Directors of the
constituent companies, is expected to close shortly after all of the conditions
to the consummation of the Transaction, including obtaining applicable
regulatory approvals, are met or waived. The regulatory approval process is
expected to take approximately 12 to 18 months.
Additional information concerning the Transaction and the Merger Agreement,
including pro forma combined financial information, is included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 (the "Form
10-Q") filed with the Commission and incorporated by reference into this
Prospectus.
In the Transaction, the holding company of the combined enterprise will be
registered under the Public Utility Holding Company Act of 1935, as amended. The
holding company will be named Primergy Corporation ("Primergy") and will be the
parent company of both the Company (which, for regulatory reasons, will
reincorporate in Wisconsin) and of WEC's present principal utility subsidiary,
Wisconsin Electric Power Company ("WEPCO") which will be renamed "Wisconsin
Energy Company." Wisconsin Energy Company will include the operations of WEC's
other present utility subsidiary, Wisconsin Natural Gas Company, which is
anticipated to be merged into WEPCO by January 1, 1996, as previously planned.
It is anticipated that, following the Transaction, the Company's Wisconsin
utility subsidiary, NSP-Wisconsin, will be merged into Wisconsin Energy Company
and that NRG and the Company's other subsidiaries will become subsidiaries of
Primergy.
As noted above, pursuant to the Transaction the Company will reincorporate
in Wisconsin for regulatory reasons. This reincorporation will be accomplished
by the merger of the Company into New NSP, with New NSP being the surviving
corporation and succeeding to the business of the Company as
3
<PAGE>
an operating public utility. Following such merger, WEC Sub will be merged with
and into New NSP, with New NSP being the surviving corporation and becoming a
subsidiary of Primergy. Both New NSP and WEC Sub were created to effect the
Transaction and will not have any significant operations, assets or liabilities
prior to such mergers.
The Transaction is subject to customary closing conditions, including,
without limitation, the receipt of required shareholder approvals of WEC and the
Company and the receipt of all necessary governmental approvals and the making
of all necessary governmental filings, all as more fully described in the Form
10-Q. Shareholder meetings to vote upon the Transaction will be convened as soon
as practicable and are expected to be held in the third or fourth quarter of
1995.
A preliminary estimate indicates that the Transaction will result in net
savings of approximately $2.0 billion in costs over 10 years. It is anticipated
that the synergies created by the Transaction will allow the Company and
Wisconsin Energy Company to implement a modest reduction in electric retail
rates followed by a rate freeze for electric retail customers through the year
2000. Both the Company and WEC recognize that the divestiture of their existing
gas operations and certain non-utility operations is a possibility under the new
registered holding company structure, but will seek approval from the Commission
to maintain such businesses. If divestiture is ultimately required, the
Commission has historically allowed companies sufficient time to accomplish
divestitures in a manner that protects shareholder value.
Following the completion of the Transaction, the Offered Bonds and the
Company's other outstanding first mortgage bonds will be obligations of New NSP,
as a subsidiary of Primergy, and will continue to be secured by the Indenture as
described in this Prospectus. However, as described above, New NSP is not
expected to retain any of the Company's subsidiaries and the Offered Bonds will
not be an obligation of Primergy or any other subsidiary of Primergy. For the
twelve months ended March 31, 1995 and the year ended December 31, 1994, the
Company's subsidiaries constituted 30% and 29% of NSP's consolidated net income,
respectively, and represented 21% of NSP's consolidated assets and 17% of NSP's
consolidated liabilities including long-term debt at March 31, 1995. The
Company's Current Report on Form 8-K dated June 27, 1995, filed with the
Commission and incorporated by reference in this Prospectus, includes pro forma
financial information for the Company without its subsidiaries.
USE OF PROCEEDS
The proceeds from the sale of the New Bonds will be added to the general
funds of the Company and used for general corporate purposes, which may include
the purchase or redemption of one or more series of outstanding first mortgage
bonds and the repayment of outstanding short-term borrowings incurred in
connection with NSP's continuing construction program. Short-term borrowings of
the Company aggregated $283 million as of May 31, 1995. The specific allocation
of the proceeds of a particular series of the Offered Bonds will be described in
the Prospectus Supplement.
NSP'S RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1994 1993 1992 1991 1990
TWELVE MONTHS ---- ---- ---- ---- ----
ENDED
MARCH 31, 1995
------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges...................... 3.8 4.0 4.0 3.2 3.9 3.7
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, (i)
earnings consist of income from continuing operations before accounting change
plus fixed charges, federal and state income taxes, deferred income taxes and
investment tax credits and less undistributed equity in earnings of
unconsolidated investees; and (ii) fixed charges consist of interest on
long-term debt, other interest charges, the interest component on leases and
amortization of debt discount, premium and expense.
4
<PAGE>
The Company's Current Report on Form 8-K dated June 27, 1995, filed with the
Commission and incorporated by reference in this Prospectus, contains pro forma
financial information for the Company without its subsidiaries, including a pro
forma ratio of earnings to fixed charges for the twelve months ended March 31,
1995 and for each of the years ended December 31, 1994, 1993 and 1992.
Assuming that variable interest rate debt continues at interest rates
applicable on March 31, 1995, the annual interest requirement on long-term debt
of NSP outstanding at March 31, 1995, was $108,189,000.
DESCRIPTION OF NEW BONDS
Each series of New Bonds is to be an initial issue of a new series of first
mortgage bonds (the "Bonds") issued under the Trust Indenture dated February 1,
1937 (the "1937 Indenture") as supplemented by 43 supplemental trust indentures
(collectively, the "Supplemental Indentures"), a Supplemental and Restated Trust
Indenture dated May 1, 1988 (the "Restated Indenture") and a new supplemental
trust indenture for such series of New Bonds (the "New Supplemental Indenture"),
all from the Company to Harris Trust and Savings Bank, as trustee (the
"Trustee"). The 1937 Indenture, as supplemented by the Supplemental Indentures,
the Restated Indenture and the New Supplemental Indenture herein are referred to
collectively as the "Indenture." Excluding the New Bonds, and giving effect to
the expected redemption of $168,000,000 aggregate principal amount of
outstanding Bonds in August 1995, there will be 13 series of Bonds in an
aggregate principal amount of $844,800,000 outstanding under the Indenture.
Copies of the 1937 Indenture, the Supplemental Indentures, the Restated
Indenture and the form of the New Supplemental Indenture are filed as Exhibits
4.01A to 4.01RR to the Registration Statement and the statements herein made
(being for the most part succinct summaries of certain provisions of the
Indenture) are subject to the detailed provisions of the 1937 Indenture, the
Supplemental Indentures, the Restated Indenture and the New Supplemental
Indenture which are incorporated herein by reference.
The Restated Indenture amends and restates the 1937 Indenture and the
Supplemental Indentures. The Restated Indenture will not become effective and
operative until all Bonds of each series issued under the Indenture prior to May
1, 1988 shall have been retired through payment or redemption (including those
Bonds "deemed to be paid" within the meaning of that term as used in Article
XVII of the 1937 Indenture) or (except as described below) until the holders of
the requisite principal amount of such Bonds shall have consented to the
amendments contained in the Restated Indenture (herein, the "Effective Date").
Holders of the New Bonds and of each series of Bonds issued under the Indenture
after May 1, 1988 likewise will be bound by the amendments contained in the
Restated Indenture when they become effective and operative. If the consent of
the holders of Bonds of each series issued prior to May 1, 1988 is not obtained
or such Bonds are not retired prior to their maturity, the Company presently
expects the Restated Indenture to become effective no earlier than December 1,
2006.
The following summary of the provisions of the Indenture includes, where
applicable, a discussion of the amendments contained in the Restated Indenture.
References are made to specific Article and Section numbers of the 1937
Indenture, the Supplemental Indentures, the Restated Indenture and the New
Supplemental Indenture. Unless the context indicates otherwise, words or phrases
defined in the 1937 Indenture, the Supplemental Indentures, the Restated
Indenture or the New Supplemental Indenture are capitalized and used with the
same meanings herein.
TERMS OF NEW BONDS
The New Bonds will be issued as fully registered bonds without coupons in
denominations of multiples of $1,000. New Bonds may be issued in temporary form
if, for any reason, the Company is unable to deliver New Bonds in definitive
form. Principal and interest are to be payable in Chicago, Illinois, at Harris
Trust and Savings Bank or in New York, New York at Harris Trust Company of New
York. New Bonds will be interchangeable in the manner provided in Article II of
the New Supplemental Indenture. The New Bonds may be issued in book-entry form
through the facilities of a depository. The description of any book-entry
arrangements will be contained in the Prospectus Supplement.
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No charge will be made by the Company for any exchange or transfer of New
Bonds, other than for any taxes or other governmental charges.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms and other information with respect to the
Offered Bonds: (1) the designation and aggregate principal amount of such
Offered Bonds; (2) the date or dates on which such Offered Bonds will mature;
(3) the rate or rates per annum (or method of calculation) at which such Offered
Bonds will bear interest and the date from which such interest shall accrue; (4)
the dates on which such interest will be payable; (5) the record dates for
payments of interest; and (6) any optional or mandatory redemption terms or
other specific terms applicable to the Offered Bonds. The holders of the
outstanding Bonds do not, and the holders of the New Bonds will not, have the
right to tender such Bonds to the Company for repurchase upon the Company
becoming involved in a highly leveraged or change in control transaction. The
Indenture does not have any provision that is designed specifically in response
to highly leveraged or change in control transactions. However, bondholders
would have the security afforded by the first mortgage lien on substantially all
the Company's property as described under the subcaption "Security for New
Bonds" below. In addition, any change in control transaction and any incurrence
of additional indebtedness (as first mortgage bonds or otherwise) by the Company
in such a transaction would require approval of state utility regulatory
authorities and, possibly, of federal utility regulatory authorities. Management
believes that such approvals would be unlikely in any transaction that would
result in the Company, or a successor to the Company, having a highly leveraged
capital structure. See "PROPOSED MERGER."
SECURITY FOR NEW BONDS
In the opinion of counsel for the Company, the New Bonds when issued will be
secured equally and ratably, except as to sinking fund provisions, with all
other outstanding Bonds by a valid and direct first mortgage lien on all of the
real and fixed properties, leasehold rights, franchises and permits then owned
by the Company subject only (a) to Permitted Liens and (b) as to parts of the
Company's property, to certain easements, conditions, restrictions, leases and
similar encumbrances which do not affect the Company's use of such property in
the usual course of its business, to certain minor defects in titles which are
not material and to defects in titles to certain properties not essential to the
Company's business. The Indenture contains provisions for subjecting to the lien
thereof all property, rights and franchises (except as otherwise expressly
provided) acquired by the Company after the date of the 1937 Indenture. Such
provisions might not be effective as to property acquired, within 90 days prior
and subsequent to the filing of a case, with respect to the Company, under the
United States Bankruptcy Code. The opinion of counsel does not cover titles to
easements for water flowage purposes or rights-of-way for electric and gas
transmission and distribution facilities, steam mains and telephone lines.
However, the Company has the power of eminent domain in the states in which it
operates.
The Indenture provides that no prior liens, other than Permitted Liens, may
be created or permitted to exist upon the mortgaged and pledged property whether
now owned or hereafter acquired. (Section 4 of Article VIII of the 1937
Indenture.) Following the retirement of the Bonds of each series issued prior to
May 1, 1988, the Restated Indenture will amend the foregoing provisions to allow
Permitted Encumbrances on the mortgaged and pledged property. Permitted
Encumbrances include Permitted Liens and (a) rights of Persons who are parties
to agreements with the Company relating to property owned or used jointly (in
common) by the Company with such Persons, provided (i) that such rights do not
materially impair the use of such jointly owned or used property in the normal
operation of the Company's business and do not materially affect the security
afforded by the Indenture and (ii) that such rights are not inconsistent with
the remedies of the Trustee upon a Completed Default; (b) (i) leases existing at
the Effective Date of the Restated Indenture affecting property owned by the
Company on the Effective Date; (ii) leases which do not interfere in any
material respect with the use of the related property for the purpose for which
it is held by the Company and which will not have a material adverse impact on
the security afforded by the Indenture or (iii) other leases relating to not
more than 5% of the sum of the Company's Depreciable Property and Land; and (c)
any mortgage, lien, charge or encumbrance prior or equal to the Lien of the
Indenture, other than a Prepaid Lien, existing at the date any
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property is acquired by the Company, provided that at the date of acquisition of
such property: (i) no Default has occurred and is continuing; (ii) the principal
amount of indebtedness outstanding under and secured by such mortgage, lien,
charge or encumbrance shall not exceed 66 2/3% of the lesser of the Cost or Fair
Value of the property so acquired; and (iii) each such mortgage, lien, charge or
encumbrance shall apply only to the property and improvements originally subject
thereto and that the Company shall cause to be closed all mortgages or other
liens existing at the time of acquisition of any property thereafter acquired by
the Company and will permit no additional indebtedness to be issued thereunder
or secured thereby. (Section 1.03 of the Restated Indenture.)
Following the retirement of the Bonds of each series issued prior to May 1,
1988, the holders of 66 2/3% of the principal amount of Bonds Outstanding may
(a) consent to the creation or existence of a Prior Lien with respect to up to
50% of the sum of the Company's Depreciable Property and Land, after giving
effect to such Prior Lien or (b) terminate the Lien of the Indenture with
respect to up to 50% of the sum of the Company's Depreciable Property and Land.
(Section 18.02(e) of the Restated Indenture.)
The Indenture is not a lien on the properties of NSP-Wisconsin, nor is the
stock of NSP-Wisconsin, NRG, Viking or any other subsidiary owned by the Company
pledged thereunder.
SINKING FUND PROVISIONS
The sinking fund redemption provision, if any, for each series of the New
Bonds will be set forth in the related Prospectus Supplement. As an annual
sinking fund, the Company covenants to pay to the Trustee annually, on October
1, an amount sufficient to redeem, for sinking fund purposes, 1% of the highest
amount, at any time outstanding, of each outstanding series of Bonds, other than
Bonds of the Series due October 1, 1997, Bonds of the Series due April 1, 2003,
Bonds of the Series due December 1, 2000, Bonds of the Series due December 1,
2005, Bonds of the Series due February 1, 1999, Bonds of the Series due October
1, 2001 and other than Pollution Control Series C, J, K, L and Resource Recovery
Series I. Sinking fund payments may be offset by (a) application of net
Permanent Additions of a Cost or Fair Value, whichever is less, equal to 150% of
the principal amount of Bonds which otherwise would be required to be retired by
the sinking fund or (b) retirement or delivery to the Trustee of Bonds of the
series for which the sinking fund is applicable. The Trustee is required to
apply sinking fund money to the purchase or redemption of Bonds of the series
for which such money is applicable. (Article III of each Supplemental Indenture
except those dated June 1, 1942, February 1, 1944, October 1, 1945, July 1,
1948, August 1, 1949, August 1, 1957, October 1, 1992, April 1, 1993, December
1, 1993, October 1, 1994, and those relating to each Pollution Control Series
and to Resource Recovery Series I.)
Certain of the Bonds of Resource Recovery Series I are subject to a
mandatory sinking fund applicable to each respective series. (Section 3.02 of
the Supplemental Indenture dated December 1, 1984.)
MAINTENANCE PROVISIONS
As a Maintenance Fund for the Bonds, the Company covenants to pay to the
Trustee annually on May 1 an amount equal to 15% of the Consolidated Gross
Operating Revenues of the Company for the preceding calendar year, after
deducting from such revenues: (a) cost of electricity and gas purchased for
resale, (b) rentals paid for utility property, less credits at the Company's
option for (i) maintenance, (ii) property retirements offset by Permanent
Additions, (iii) retirements of Bonds and (iv) Cost or Fair Value, whichever is
less, of Permanent Additions after deducting property retirements. Withdrawals
from the Maintenance Fund may be made on the basis of retirements of Bonds and
net Permanent Additions, but cash in excess of $100,000 remaining on deposit in
the Maintenance Fund for more than three years must be used for the purchase or
redemption of Bonds. Any such redemption would be at the applicable regular
redemption price of the Bonds to be redeemed and subject to any restrictions on
the redemption of such Bonds. (Article IX of the 1937 Indenture; Article IV of
the Supplemental Indenture dated June 1, 1952.)
The Restated Indenture will amend the foregoing provisions of the Indenture
by replacing the current Maintenance Fund deposit formula with the requirement
that the Company pay to the Trustee
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annually on May 1 an amount equal to 2.50% of its Completed Depreciable Property
as of the end of the preceding calendar year, after deducting credits at the
Company's option for (a) maintenance, (b) property retirements offset by
Permanent Additions, (c) retirements of Bonds and (d) Amounts of Established
Permanent Additions. (Section 9.01 of the Restated Indenture.) The Restated
Indenture further provides that to the extent that Maintenance Fund credits
exceed 2.50% of Completed Depreciable Property for any year after 1987, such
excess credits may be applied in future years (a) to offset any Maintenance Fund
deficiency or (b) to increase the Amount of Established Permanent Additions
available for use under the Indenture. (Section 9.05 of the Restated Indenture.)
In addition, the Restated Indenture eliminates the requirement that cash in
excess of $100,000 remaining on deposit in the Maintenance Fund for more than
three years be used for the purchase or redemption of Bonds.
The Company has covenanted to maintain its properties in adequate repair,
working order and condition. (Section 6 of Article VIII of the 1937 Indenture;
Section 8.06 of the Restated Indenture.)
ISSUANCE OF ADDITIONAL BONDS
The maximum principal amount of Bonds that may be issued under the Indenture
is not limited, except as described below. Additional Bonds may be issued on the
basis of (a) 60% of the Cost or Fair Value, whichever is less, of Permanent
Additions after deducting retirements (Article V of the 1937 Indenture; also
Sections 1 and 3 of Article III of the Supplemental Indenture dated February 1,
1944); (b) retired Bonds, which have not been otherwise used under the Indenture
(Article VI of the 1937 Indenture); and (c) deposit of an equal amount of cash
with the Trustee, which cash may be withdrawn on the same basis as additional
Bonds may be issued under clauses (a) and (b) above. (Article VII of the 1937
Indenture; Section 2 of Article III of the Supplemental Indenture dated February
1, 1944; and Article IV of the Supplemental Indenture dated June 1, 1952.) The
Restated Indenture will amend the foregoing provisions of the Indenture by
increasing the percentage in clause (a) above from 60% to 66 2/3%. (Section 5.03
of the Restated Indenture.)
The New Bonds will be issued under clause (a) and/or (b) above. At March 31,
1995, the amount of net Permanent Additions available for the issuance of Bonds
exceeded $4.1 billion, of which $417 million could be used for the
authentication of $250 million principal amount of the New Bonds. As of March
31, 1995, $159 million of retired Bonds were available for the authentication of
up to $159 million of New Bonds.
No additional Bonds may be issued on the basis of clause (a), clause (b)
under specified conditions, or clause (c), unless the Earnings Applicable to
Bond Interest for a specified twelve-month period are equal to twice the annual
interest requirements on the Bonds, including those about to be issued. (Section
4 of Article V, Section 2 of Article VI, and Section 1 of Article VII of the
1937 Indenture.)
Permanent Additions include: the Company's electric and steam generating,
transmission and distribution properties; the Company's gas storage and
distribution properties; construction work-in-progress; and fractional and
undivided property interests of the Company. (Section 4 of Article I of the 1937
Indenture; Section 1.03 of the Restated Indenture.) Under the Restated
Indenture, Permanent Additions also will include property used for providing
telephone or other communication services and engineering, financial, economic,
environmental, geological and legal or other studies, surveys or reports
associated with the acquisition or construction of any Depreciable Property.
(Section 1.03 of the Restated Indenture.)
Assuming that the interest cost on variable rate Bonds is at the maximum
allowable rate, Earnings Applicable to Bond Interest for the twelve months ended
March 31, 1995, would be 5.0 times the annual interest requirements on the Bonds
including the New Bonds. Additional Bonds may vary from the Offered Bonds as to
maturity, interest rate, redemption prices, and sinking fund, and in certain
other respects. (Article II of the 1937 Indenture and Article II of the Restated
Indenture.) The Restated Indenture will amend the Indenture by requiring that
Earnings Applicable to Bond Interest for a specified twelve-month period be
equal to twice the annual interest requirements on the Bonds, including those
about to be issued, and any obligations secured by Prior Liens and any
indebtedness secured by Permitted
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Encumbrances. (Sections 1.03 and 5.04 of the Restated Indenture.) Under the
Restated Indenture, the calculation of Earnings Applicable to Bond Interest will
include all non-utility revenues of the Company. (Section 1.03 of the Restated
Indenture.)
PROVISION LIMITING DIVIDENDS ON COMMON STOCK
The Company has covenanted that the sum of (i) all dividends and
distributions on the common stock of the Company after September 30, 1954 (other
than in common stock), and (ii) the cost of all shares of its common stock
acquired by it after that date shall not exceed the sum of (a) the earned
surplus of the Company and its Qualified Subsidiary Companies, consolidated, at
September 30, 1954, and (b) an amount equal to the consolidated net income of
the Company and its Qualified Subsidiary Companies, earned after September 30,
1954, after making provision for all dividends accruing after that date on
preferred stock of the Company and after taking into consideration all proper
charges and credits to earned surplus made after that date. In computing net
income for the purpose of this covenant, there will be deducted an amount, if
any, by which 15% of the Consolidated Gross Operating Revenues of such
companies, after certain deductions, exceeds the aggregate of the amounts
expended for maintenance and appropriated for reserves for renewals,
replacements, retirements, depreciation or depletion. (Article IV of the
Supplemental Indenture dated October 1, 1954.) As of 1957, the Company no longer
had any Qualified Subsidiary Companies. This provision has not impaired the
Company's ability to pay dividends in the past and is not expected to do so in
the future.
The Restated Indenture will replace the dividend restriction described above
with the requirement that (a) the sum of: (i) all dividends and distributions on
the Company's common stock after the Effective Date of the Restated Indenture
(other than in common stock) and (ii) the amount, if any, by which the
Considerations given by the Company for the purchase or other acquisition of its
common stock after the Effective Date exceeds the Considerations received by it
after the Effective Date from the sale of common stock, shall not exceed (b) the
sum of (i) the retained earnings of the Company at the Effective Date, and (ii)
an amount equal to the net income of the Company earned after the Effective
Date, after deducting all dividends accruing after the Effective Date on all
classes and series of preferred stock of the Company and after taking into
consideration all proper charges and credits to earned surplus made after the
Effective Date. In computing net income for the purpose of this amended
covenant, there will be deducted the amount, if any, by which, after the date
commencing 365 days prior to the Effective Date, the actual expenditures or
charges for ordinary repairs and maintenance and the charges for reserves,
renewals, replacements, retirements, depreciation and depletion are less than
2.50% of the Company's Completed Depreciable Property. (Section 8.07 of the
Restated Indenture.)
RELEASE PROVISIONS
The Indenture contains provisions permitting the release from its lien of
any property upon depositing or pledging cash or certain other property of
comparable Fair Value. The Indenture also contains provisions for the sale or
other disposal of securities not pledged under the Indenture, contracts,
accounts, motor cars, and certain equipment and supplies; for the cancellation,
change or alteration of leases, rights-of-way and easements; and for the
surrender and modification of any franchise or governmental consent subject to
certain restrictions; in each case without any release or consent by the Trustee
or accountability thereto for any consideration received by the Company.
(Article XI of the 1937 Indenture and Article XI of the Restated Indenture.)
Following the retirement of the Bonds of each series issued prior to May 1,
1988, (a) the Company may sell or otherwise dispose of, free of the Lien of the
Indenture, all motor vehicles, vessels and marine equipment, railroad cars,
engines and related equipment, airplanes, office furniture and leasehold
interests in property owned by third parties and (b) the Company may enter into
leases with respect to the property subject to the Lien of the Indenture which
do not interfere in any material respect with the use of such property for the
purpose for which it is held by the Company and will not have a material adverse
impact on the security afforded by the Indenture. (Section 11.02(b) of the
Restated Indenture.)
Following the retirement of the Bonds of each series issued prior to May 1,
1988, any of the mortgaged and pledged property may be released from the Lien of
the Indenture if, after such release,
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the Fair Value of the remaining mortgaged and pledged property equals or exceeds
a sum equal to 150% of the aggregate principal amount of Bonds Outstanding.
(Section 11.03(k) of the Restated Indenture.) When effective and upon
satisfaction of the requirements set forth in the Indenture, this provision
would permit the Company to spin-off or otherwise dispose of a substantial
amount of assets or a line of business without depositing cash or property with
the Trustee or obtaining the consent of the bondholders.
MODIFICATION OF THE INDENTURE
With the consent of the Company, the provisions of the Indenture may be
changed by the affirmative vote of the holders of 80% in principal amount of the
Bonds Outstanding except that, among other things, the maturity of a Bond may
not be extended, the interest rate reduced, nor the terms of payment of
principal or interest changed without the consent of the holder of each Bond so
affected. (Article XVIII of the 1937 Indenture.)
The Supplemental Indenture dated May 1, 1985 amended the foregoing
provisions of the Indenture by reducing the 80% requirement to 66 2/3%. This
amendment will not become effective and operative until all Bonds of each series
issued prior to May 1, 1985 shall have been retired or until all the holders
thereof shall have consented to such amendment. Holders of the New Bonds and of
each subsequent series issued under the Indenture will likewise be bound by the
amendment when it becomes effective and operative. (Article VI of the
Supplemental Indenture dated May 1, 1985 and Section 18.02 of the Restated
Indenture.)
CONCERNING THE TRUSTEE
In case of a Completed Default either the Trustee or the holders of 25% in
principal amount of (i) the Bonds Outstanding or (ii) the Bonds affected by such
default, may declare the Bonds due and payable subject to the right of the
holders of a majority of the Bonds then Outstanding to rescind or annul such
action. Further, it is obligatory upon the Trustee to take the actions provided
in the Indenture to enforce payment of the Bonds and the Lien of the Indenture
upon being requested to do so by the holders of a majority in principal amount
of the Bonds. However, the holders of a majority in principal amount of the
Bonds may direct the taking of any such action or the refraining therefrom as is
not contrary to law or the Indenture. As a condition precedent to certain
actions, the Trustee may require adequate indemnity against the costs, expenses
and liabilities to be incurred therein or thereby. (Article XIII of the 1937
Indenture; Section 6 of Article VI of Supplemental Indenture dated February 1,
1944; Section 4.03 of Supplemental Indenture dated October 1, 1945 and Article
XIII of the Restated Indenture.)
DEFAULTS
The following is a summary of events defined in the Indenture as Completed
Defaults: (a) default in payment of principal of any Bond, (b) default continued
for 90 days in payment of interest on any Bond, (c) default in the covenant
contained in Section 11 of Article VIII of the Indenture (Section 8.11 of the
Restated Indenture) with respect to bankruptcy, insolvency, assignment or
receivership and (d) default continued for 90 days after notice in the
performance of any other covenant, agreement or condition. (Section 4.02 of the
Supplemental Indenture dated October 1, 1945 and Section 13.01 of the Restated
Indenture.)
The Trustee is required to give notice to bondholders (1) within 90 days
after the occurrence of a default known to the Trustee within such period, or
(2) if the Trustee is unaware of a default during such period, then, within 30
days after the Trustee knows of such default, unless such default shall have
been cured before giving such notice; provided that, except in the case of a
default resulting from the failure to make any payment of principal of or
interest on any Bonds or to make any sinking fund payment, the Trustee may
withhold such notice upon determination in good faith by the board of directors,
the executive committee or a trust committee of directors or responsible
officers of the Trustee that the withholding of such notice is in the interest
of the bondholders. (Section 4 of Article V of the Supplemental Indenture dated
February 1, 1944 and Section 16.02 of the Restated Indenture.)
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The Company is required to file with the Trustee such information, documents
and reports with respect to compliance by the Company with the conditions and
covenants of the Indenture as may be required by the rules and regulations of
the Commission including a certificate, furnished not less frequently than
annually, as to the Company's compliance with all of the conditions and
covenants under the Indenture. (Section 8 of Article III of the Supplemental
Indenture dated February 1, 1944 and Section 8.18 of the Restated Indenture.)
GENERAL
Whenever all indebtedness secured thereby shall have been paid, or adequate
provision therefor made, the Trustee shall cancel and discharge the Indenture.
(Article XVII of the 1937 Indenture and Article XVII of the Restated Indenture.)
After the Effective Date, the Company may deposit with the Trustee any
combination of cash or Government Obligations in order to provide for the
payment of any series or all of the Bonds Outstanding. The Indenture also
provides that the Company shall furnish, to the Trustee, Officers' Certificates,
certificates of an Engineer, Appraiser or other expert and, in certain cases,
Accountants' Certificates in connection with the authentication of Bonds, the
release or release and substitution of property and certain other matters, and
Opinions of Counsel as to the Lien of the Indenture and certain other matters.
(Article IV of the Supplemental Indenture dated February 1, 1944; Articles IV,
V, VI, VII, XI and XVII and Section 20.08 of the Restated Indenture.)
LEGAL OPINIONS
Legal opinions relating to the New Bonds will be rendered by Gary R.
Johnson, 414 Nicollet Mall, Minneapolis, Minnesota, counsel for the Company, and
by Gardner, Carton & Douglas, 321 North Clark Street, Chicago, Illinois, counsel
for any underwriters, dealers or agents named in a Prospectus Supplement. Gary
R. Johnson is Vice President, General Counsel and Secretary of the Company.
Matters pertaining to local laws will be passed upon by counsel for the Company
and as to these matters Gardner, Carton & Douglas will rely on their opinions.
The opinion contained in this Prospectus under "Description of New
Bonds--Security for New Bonds," is the opinion of Gary R. Johnson. Gardner,
Carton & Douglas has acted from time to time as special counsel for NSP in
connection with certain matters, including the Transaction.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K (which reports express an unqualified opinion and include an
explanatory paragraph referring to the Company's change in method of accounting
for postretirement healthcare costs in 1993) have been audited by Deloitte &
Touche LLP, independent public accountants, as stated in their report included
in such Form 10-K which is incorporated herein by reference, and have been so
incorporated in reliance upon such report given upon the authority of that firm
as experts in accounting and auditing.
PLAN OF DISTRIBUTION
The Company may sell the New Bonds (i) to or through underwriters or
dealers; (ii) directly to one or more purchasers; or (iii) through agents. The
Prospectus Supplement with respect to each series of Offered Bonds will set
forth the terms of the offering of such Offered Bonds, including the name or
names of any underwriters, the purchase price of such Offered Bonds and the
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers and
any securities exchanges on which such Offered Bonds may be listed. Any initial
offering price and any discounts, concessions or commissions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Bonds will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated
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transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Bonds may be offered to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more of such firms. The specific managing underwriter or
underwriters, if any, will be set forth in the Prospectus Supplement relating to
the Offered Bonds together with the members of the underwriting syndicate, if
any. Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase the Offered Bonds offered thereby will be subject
to certain conditions precedent and the underwriters will be obligated to
purchase all such Offered Bonds if any are purchased.
Offered Bonds may be sold directly by the Company or through agents
designated by the Company from time to time. The Prospectus Supplement will set
forth the name of any agent involved in the offer or sale of the Offered Bonds
in respect of which the Prospectus Supplement is delivered and any commissions
payable by the Company to such agent.
Any underwriters, dealers or agents participating in the distribution of the
Offered Bonds may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of the Offered Bonds may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933. Agents
and underwriters may be entitled, under agreements entered into with the
Company, to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contributions with
respect to payments which the agents or underwriters may be required to make in
respect thereof. Agents and underwriters may engage in transactions with or
perform services for the Company in the ordinary course of business.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
-------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Use of Proceeds................................ S-2
Supplemental Description of Offered Bonds...... S-2
Underwriting................................... S-5
PROSPECTUS
Available Information.......................... 2
Documents Incorporated by Reference............ 2
NSP............................................ 3
Proposed Merger................................ 3
Use of Proceeds................................ 4
NSP's Ratio of Earnings to Fixed Charges....... 4
Description of New Bonds....................... 5
Legal Opinions................................. 11
Experts........................................ 11
Plan of Distribution........................... 11
</TABLE>
$250,000,000
NORTHERN STATES POWER
COMPANY
(A MINNESOTA CORPORATION)
7 1/8% FIRST MORTGAGE BONDS
SERIES DUE JULY 1, 2025
-----------------
PROSPECTUS SUPPLEMENT
-----------------
PAINEWEBBER INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS
-------------
JUNE 28, 1995
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