PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 12, 2000)
$55,000,000
Orange and Rockland Utilities, Inc.
7.50% Debentures, Series 2000 A Due June 15, 2010
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The Debentures are unsecured debt securities of Orange and Rockland
Utilities, Inc. ("O&R") which will mature on June 15, 2010. The Debentures may
not be redeemed prior to maturity. Interest on the Debentures is payable on
December 15, 2000 and thereafter semi-annually on June 15 and December 15 in
each year.
<TABLE>
<S> <C> <C> <C>
Initial Public Underwriting Proceeds to
Offering Price Discount O&R
Per Debenture.......................... 98.3169% 0.2713% 98.0456%
Total.................................. $54,074,295 $149,215 $53,925,080
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Debentures will accrue from June 16, 2000 and
must be paid by the purchaser if the Debentures are delivered after June 16,
2000.
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The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these securities, or determined if this
Prospectus Supplement or the accompanying Prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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We expect that the Debentures will be ready for delivery in book-entry
form only through the facilities of The Depository Trust Company ("DTC") on or
about June 16, 2000.
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LEHMAN BROTHERS INC.
June 13, 2000
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this Prospectus Supplement and Prospectus. We have not authorized
anyone to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information contained in or incorporated by reference in this
Prospectus Supplement and Prospectus is accurate as of any date other than the
date on the front of this Prospectus Supplement.
TABLE OF CONTENTS
Page
Prospectus Supplement
Description of Debentures............................................... S-2
Underwriting............................................................ S-4
Prospectus
About This Prospectus................................................... 2
Where You Can Find More Information..................................... 2
O&R..................................................................... 3
Use of Proceeds......................................................... 3
Ratio of Earnings to Fixed Charges...................................... 4
Description of Securities............................................... 4
Plan of Distribution.................................................... 12
Legal Matters........................................................... 13
Experts................................................................. 13
DESCRIPTION OF DEBENTURES
General
The Debentures will mature on June 15, 2010, and may not be redeemed prior
to maturity. See "Description of Securities" in the Prospectus for additional
information concerning the Debentures and the Indenture under which they are to
be issued.
Interest
We will pay interest on the Debentures at the rate per annum stated on the
first page of this Prospectus Supplement. Interest shall accrue from June 16,
2000 or from the most recent interest payment date to which interest has been
paid. Interest is payable on December 15, 2000 and thereafter semi-annually on
June 15 and December 15 in each year to holders of record at the close of
business on the last day, whether or not a business day, of the calendar month
next preceding the interest payment date, except as otherwise provided in the
Indenture. If an interest payment date is a Sunday or legal holiday or a day on
which banking institutions in the City of New York are authorized by law to
close, we will pay the interest otherwise payable on such interest payment date
on the next succeeding business day.
Book-Entry System
This discussion of DTC and its book-entry system supplements the
discussion of depositary arrangements in "Description of Securities-Global
Securities" in the Prospectus.
DTC will act as securities depository for the Debentures. The Debentures
will be issued in fully-registered form in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered Debenture certificates will
be issued as Global Securities for the Debentures, in the aggregate principal
amount of the Debentures, 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 ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
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" and
together with Direct Participants, "Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Debentures under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Debentures on DTC's
records. The ownership interest of each actual purchaser of Debentures
("Beneficial Owner") is in turn to be recorded on the 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 Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Debentures 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 Debentures, except in the event that use of the
book-entry system for the Debentures is discontinued.
To facilitate subsequent transfers, all Debentures deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debentures 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 Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Debentures 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
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
Debentures. Under its usual procedures, DTC would mail an Omnibus Proxy to O&R
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 Debentures are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Principal and interest payments on the Debentures will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the 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 the 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 will be the
responsibility of such Participant and not of DTC or O&R, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of O&R,
disbursement of such payments to Direct Participants shall be the responsibility
of DTC, and disbursements of such payments to the Beneficial Owners shall be the
responsibility of Participants.
DTC may discontinue providing its services as securities depository with
respect to the Debentures at any time by giving reasonable notice to O&R. Under
such circumstances, in the event that a successor securities depository is not
obtained, Debenture certificates are required to be printed and delivered. O&R
may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Debenture certificates
will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that O&R believes to be reliable (including DTC),
but O&R takes no responsibility for the accuracy thereof.
Neither O&R, the Trustee nor the Underwriter will have any responsibility
or obligation to Participants, or the persons for whom they act as nominees,
with respect to the accuracy of the records of DTC, its nominee or any
Participant with respect to any ownership interest in the Debentures, or
payments to, or the providing of notice for, Participants or Beneficial Owners.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between O&R and Lehman Brothers Inc. (the
"Underwriter"), O&R has agreed to sell to the Underwriter, and the Underwriter
has agreed to purchase, the Debentures. The Underwriting Agreement provides that
the obligations of the Underwriter are subject to certain conditions precedent
and that the Underwriter will be obligated to purchase all of the Debentures if
any are purchased.
The Underwriter has advised O&R that it proposes initially to offer the
Debentures in part directly to the public at the Initial Public Offering Price
set forth on the cover page of this Prospectus Supplement, and in part to
certain securities dealers at such price less a concession not in excess of .10%
of the principal amount of the Debentures. The Underwriter may allow, and such
dealers may reallow, a discount not in excess of .10% of the principal amount to
certain brokers and other dealers. After the initial public offering, the public
offering price and other selling terms may be changed by the Underwriter.
The Debentures are a new issue of securities with no established trading
market. O&R has been advised by the Underwriter that it intends to make a market
in the Debentures but is not obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the
development or liquidity of any trading market for the Debentures. The
Debentures will not be listed on any securities exchange.
O&R has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, and will
contribute to payments the Underwriter may be required to make in respect
thereof.
In the ordinary course of its business, the Underwriter provides
investment banking services to O&R and its affiliates in connection with various
transactions and proposed transactions.
In order to facilitate the offering of the Debentures, the Underwriter may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Debentures. Specifically, the Underwriter may over-allot in connection with
the offering, creating a short position in the Debentures for its own account.
In addition, to cover over-allotments or to stabilize the price of the
Debentures, the Underwriter may bid for, and purchase, the Debentures in the
open market. Finally, the Underwriter may reclaim selling concessions allowed to
a dealer for distributing the Debentures in the offering, if the Underwriter
repurchased previously distributed Debentures in transactions to cover syndicate
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Debentures above
independent market levels. The Underwriter is not required to engage in these
activities and may end any of the activities at any time.
<PAGE>
PROSPECTUS
Orange and Rockland Utilities, Inc.
Debt Securities
Orange and Rockland Utilities, Inc. may offer and sell up to $55,000,000
of our unsecured debt securities. We will establish the specific terms of each
series of our debt securities, their offering prices and how they will be
offered at the time we offer them, and we will describe them in one or more
supplements to this prospectus. This prospectus may not be used to offer and
sell our debt securities unless accompanied by a prospectus supplement. You
should read this prospectus and the related supplement before you invest in our
debt securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS
PROPSECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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We will offer and sell our debt securities through one or more
underwriters. We will set forth in the related prospectus supplement the name of
the underwriters, the discount or commission received by the underwriters as
compensation, our other expenses for the offering and sale of the debt
securities, and the net proceeds we receive from the sale. See "Plan of
Distribution."
The date of this Prospectus is June 12, 2000.
<PAGE>
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TABLE OF CONTENTS
About This Prospectus ......................................2
Where You Can Find More Information.........................2
O&R.........................................................3
Use of Proceeds.............................................3
Ratio of Earnings to Fixed Charges..........................4
Description of Securities...................................4
Plan of Distribution.......................................12
Legal Matters..............................................13
Experts....................................................13
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with the
Securities and Exchange Commission using a "shelf" registration process. By
using this process, we may offer up to a total dollar amount of $55,000,000 of
our debt securities in one or more offerings. This prospectus provides you with
a general description of the debt securities we may offer. Each time we offer
debt securities, we will provide you with a supplement to this prospectus that
will describe the specific terms of that offering. The prospectus supplement may
also add, update or change the information contained in this prospectus. Before
you invest, you should carefully read this prospectus, the applicable prospectus
supplement and the information contained in the documents we refer to in this
prospectus under "Where You Can Find More Information."
References in this prospectus to the terms "we", "us" or other similar
terms mean Orange and Rockland Utilities, Inc., unless the context clearly
indicates otherwise. We are also referred to in this prospectus as O&R. O&R is a
wholly-owned subsidiary of Consolidated Edison, Inc. ("Con Edison").
You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement. We have
not authorized anyone else to provide you with any different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell securities in any jurisdiction
where the offer or sale is not permitted. The information contained in this
prospectus is current only as of the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with
the Securities and Exchange Commission (the "Commission") through the
Commission's Electronic Data Gathering, Analysis and Retrieval system and these
filings are publicly available through the Commission's Web site
(http://www.sec.gov). You may read and copy such material at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; at the Commission's New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048; and at its
Chicago Regional Office, Northwest Atrium Center, 500 West Madison Street, 14th
Floor, Chicago, Illinois 60661. You may also obtain copies of such material at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Commission allows us to "incorporate by reference" into this
prospectus the information we file with them. This means that we can disclose
important information to you by referring you to the documents containing the
information. The information we incorporate by reference is considered to be
included in and an important part of this prospectus and should be read with the
same care. Information that we file later with the Commission that is
incorporated by reference into this prospectus will automatically update and
supercede this information. We are incorporating by reference into this
prospectus the following documents that we have filed with the Commission and
any subsequent filings we make with the Commission under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until the offering of the
debt securities described in this prospectus is completed:
o our Annual Report on Form 10-K for the year ended December 31, 1999 ("1999
Form 10-K"), (which is combined with the Annual Reports on Form 10-K of Con
Edison and Consolidated Edison Company of New York, Inc.), and our Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2000 (which is
combined with the Quarterly Reports on Form 10-Q of Con Edison and
Consolidated Edison Company of New York, Inc.); and
o our Current Report on Form 8-K, dated May 25, 2000 (which is combined with
the Current Report on Form 8-K of Con Edison.)
This prospectus is part of a registration statement we have filed with the
Commission relating to our debt securities. As permitted by the Commission's
rules, this prospectus does not contain all of the information included in the
registration statement and the accompanying exhibits and schedules we file with
the Commission. You should read the registration statement and the exhibits and
schedules for more information about us and our debt securities. The
registration statement, exhibits and schedules are also available at the
Commission's Public Reference Section or through its Web site.
You may obtain a free copy of our filings with the Commission by writing or
telephoning us at our principal executive offices: Corporate Secretary, Orange
and Rockland Utilities, Inc., One Blue Hill Plaza, Pearl River, New York 10965
(Telephone No.: 914-352-6000).
O&R
O&R, which was incorporated in New York State in 1926, is a subsidiary of
Con Edison. We have two wholly-owned utility subsidiaries, Rockland Electric
Company, a New Jersey corporation, and Pike County Light & Power Company, a
Pennsylvania corporation. O&R and its utility subsidiaries provide electric
service in southeastern New York and in adjacent sections of New Jersey and
northeastern Pennsylvania, an approximately 1,350 square mile service area. We
also provide gas service in southeastern New York and Pennsylvania.
USE OF PROCEEDS
Unless we inform you otherwise in a supplement to this prospectus, we
anticipate using any net proceeds received by us from the sale of the debt
securities for general corporate purposes, including:
o Repayment of short term debt,
o Repurchase, retirement or refinancing of other securities, and
o Funding ofconstruction expenditures.
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth O&R's ratio of earnings to fixed charges
for the periods indicated:
Twelve Months Ended Year Ended December 31,
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March 31, 2000 1999 1998 1997 1996 1995
-------------- ---- ---- ---- ---- ----
2.49 2.57 2.92 2.94 3.11 2.72
The ratio of earnings to fixed charges has been computed based upon net
income plus federal and state income tax expense and fixed charges. Fixed
charges include interest on long-term debt and other interest expense,
amortization of debt expense, discount and premium, and a reasonable
approximation of the interest component of rentals.
DESCRIPTION OF SECURITIES
The debt securities are to be issued under an Indenture to be entered into
between O&R and The Chase Manhattan Bank, as Trustee ("Trustee"), (the
"Indenture"), a form of which is included as an exhibit to the registration
statement of which this prospectus is a part. O&R may also enter into one or
more amendments or supplements to the Indenture, or additional indentures with
other trustees, with respect to certain of the debt securities. Any such
indenture would contain covenants and other provisions similar to those
described below. Reference is made to the prospectus supplement regarding any
additional indentures or additional terms and provisions under which debt
securities will be issued.
The debt securities will be unsecured general obligations of O&R. The debt
securities will rank equally and ratably in right of payment with the unsecured
debt securities of O&R issued under the Indenture that are not subordinated
obligations of O&R ("Subordinated Securities"), the unsecured debt securities of
O&R issued under the Indenture, dated as of March 1, 1990, between O&R and The
Bank of New York, as trustee, as supplemented and amended, and the unsecured
promissory notes of O&R issued as collateral for, and in consideration of the
net proceeds of, a like amount of tax-exempt pollution control revenue bonds
issued by New York State Energy Research and Development Authority; except to
the extent otherwise set forth in the prospectus supplement relating to a series
of debt securities. We may issue debt securities in the form of subordinated
securities, as described in the prospectus supplement relating to the particular
series.
There is no requirement that future issues of debt securities of O&R be
issued under the Indenture, and O&R will be free to employ other indentures or
documentation, containing provisions different from those included in the
Indenture or applicable to one or more issues of Securities, in connection with
future issues of such other debt securities.
The Indenture does not specifically restrict the ability of O&R to engage
in transactions which could have the effect of increasing the ratio of debt to
equity capitalization of O&R or a successor corporation. For example, the
Indenture does not limit the amount of indebtedness of O&R or the acquisition by
O&R of any of the equity securities of O&R or Con Edison. The Indenture also
permits O&R to merge or consolidate or to transfer its assets, subject to
certain conditions (see "Consolidation, Merger and Sale" below). O&R must obtain
approvals from state and/or federal regulatory bodies to merge or consolidate
or, with limited exceptions, to issue securities or transfer assets.
The following summary of the Indenture does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Indenture,
including the definitions therein of certain terms.
General: The Indenture provides that the debt securities offered and other
unsecured debt securities of the Company, without limitation as to aggregate
principal amount (collectively the "Indenture Securities"), may be issued in one
or more series, in each case as authorized from time to time by O&R.
Reference is made to the prospectus supplement relating to the series of
debt securities offered for the following terms:
(1) the title of the debt securities;
(2) the aggregate principal amount of the debt securities;
(3) the percentage of the principal amount representing the price for
which the debt securities shall be issued;
(4) the date or dates on which the principal of, and premium, if any,
on the deb securities shall be payable;
(5) the rate or rates (which may be fixed or variable) at which the debt
securities shall bear interest, if any, or the method by which such
rate or rates shall be determined;
(6) if the amount of payments of the principal of, premium, if any, or
interest, if any, on the debt securities may be determined with
reference to an index, formula or other method, the manner in which
such amounts shall be determined;
(7) the date or dates from which any such interest shall accrue, or the
method by which such date or dates shall be determined, the dates on
which any such interest shall be payable and any record dates
therefor;
(8) the place or places where the principal of, and premium, if any, and
interest, if any, on the debt securities shall be payable;
(9) the period or periods, if any, within which, the price or prices at
which, and the terms and conditions upon which the debt securities
may be redeemed, in whole or in part, at the option of O&R;
(10) the obligation, if any, of O&R to redeem, purchase or repay the debt
securities pursuant to any sinking fund or analogous provision or at
the option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and conditions
upon which the debt securities shall be redeemed, purchased or
repaid pursuant to such obligation;
<PAGE>
(11) whether the debt securities are to be issued in whole or in part in
the form of one or more Global Securities and, if so, the identity
of the Depositary for such Global Security or Global Securities;
(12) if other than $1,000 or an integral multiple thereof, the
denominations in which the debt securities shall be issued;
(13) if other than the principal amount thereof, the portion of the
principal amount of the debt securities payable upon declaration of
acceleration of the maturity of the debt securities;
(14) any deletions from or modifications of or additions to the Events of
Default set forth in Section 6.01 of the Indenture pertaining to the
debt securities;
(15) the provisions, if any, relating to the cancellation and
satisfaction of the Indenture with respect to the debt securities
prior to the maturity thereof pursuant to Section 12.02 of the
Indenture (see "Satisfaction and Discharge of Indenture;
Defeasance");
(16) the terms, if any, upon which O&R may elect not to pay interest on
an interest payment date;
(17) the provisions, if any, relating to the subordination of the debt
securities pursuant to Article 14 of the Indenture (see
"Subordination"); and
(18) any other terms of the debt securities not inconsistent with the
provisions of the Indenture and not adversely affecting the rights
of any other series of Indenture Securities then outstanding.
(Section 2.03)
O&R may authorize the issuance and provide for the terms of a series of
Indenture Securities pursuant to a resolution of its Board of Directors or any
duly authorized committee thereof or pursuant to a supplemental indenture. The
provisions of the Indenture described above permit O&R, in addition to issuing
Indenture Securities with terms different from those of Indenture Securities
previously issued, to "reopen" a previous issue of a series of Indenture
Securities and to issue additional Indenture Securities of such series.
The Indenture Securities will be issued only in registered form without
coupons and, unless otherwise provided with respect to a series of Indenture
Securities, in denominations of $1,000 and integral multiples thereof. (Section
2.02) Indenture Securities of a series may be issued in whole or in part in the
form of one or more Global Securities (see "Global Securities"). One or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of outstanding Indenture Securities of
the series to be represented by such Global Security or Global Securities.
(Section 2.01) No service charge will be made for any transfer or exchange of
Indenture Securities, but O&R may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
(Section 2.05)
<PAGE>
One or more series of the Indenture Securities may be issued with the same
or various maturities at par or at a discount. Debt securities bearing no
interest or interest at a rate which at the time of issuance is below the market
rate ("Original Issue Discount Securities") will be sold at a discount (which
may be substantial) below their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the prospectus supplement
relating thereto.
Subordination: If the prospectus supplement relating to a particular
series of Indenture Securities so provides, such securities will be Subordinated
Securities and the payment of the principal of, premium, if any, and interest on
the Subordinated Securities will be subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness to the extent set forth
in the next paragraph. (Section 14.01)
In the event (a) of any distribution of assets of O&R in bankruptcy,
reorganization or receivership proceedings, or upon an assignment for the
benefit of creditors, or any other marshalling of assets and liabilities of O&R,
except for a distribution in connection with a consolidation, merger, sale,
transfer or lease permitted under the Indenture (see "Consolidation, Merger and
Sale"), or (b) the principal of any Senior Indebtedness shall have been declared
due and payable by reason of an event of default with respect thereto and such
event of default shall not have been rescinded, then the holders of Subordinated
Securities will not be entitled to receive or retain any payment, or
distribution of assets of O&R, in respect of the principal of, premium, if any,
and interest on the Subordinated Securities until the holders of all Senior
Indebtedness receive payment of the full amount due in respect of the principal
of, premium, if any, and interest on the Senior Indebtedness or provision for
such payment on the Senior Indebtedness shall have been made. (Section 14.02)
Subject to the payment in full of all Senior Indebtedness, the holders of
the Subordinated Securities shall be subrogated to the rights of the holders of
the Senior Indebtedness to receive payments or distributions applicable to the
Senior Indebtedness until all amounts owing on the Subordinated Securities shall
be paid in full. (Section 14.03)
"Senior Indebtedness" means all indebtedness of O&R for the repayment of
money borrowed (whether or not represented by bonds, debentures, notes or other
securities) other than the indebtedness evidenced by the Subordinated Securities
and any indebtedness subordinated to, or subordinated on parity with, the
Subordinated Securities. "Senior Indebtedness" does not include customer
deposits or other amounts securing obligations of others to O&R. (Section 14.01)
The Indenture does not limit the aggregate amount of Senior Indebtedness
that O&R may issue. As of March 31, 2000, $331 million of Senior Indebtedness
was outstanding.
Redemption: If the prospectus supplement relating to a particular series
of Indenture Securities so provides, such securities will be subject to
redemption by O&R prior to maturity. Notice of any redemption of Indenture
Securities shall be given to the registered holders of such securities not less
than 30 days nor more than 60 days prior to the date fixed for redemption. If
less than all of a series of Indenture Securities are to be redeemed, the
Trustee shall select, in such manner as in its sole discretion it shall deem
appropriate and fair, the Indenture Securities of such series or portions
thereof to be redeemed. (Section 3.02)
Global Securities: The Indenture Securities of a series may be issued in
whole or in part in the form of one or more Global Securities that will be
deposited with, or on behalf of, the Depositary identified in the prospectus
supplement relating thereto. Unless and until it is exchanged in whole or in
part for Indenture Securities in definitive form, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary. (Sections
2.01 and 2.05)
The specific terms of the depositary arrangement with respect to any
Indenture Securities of a series will be described in the prospectus supplement
relating thereto. O&R anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book entry registration and transfer system, the
respective principal amounts of the Indenture Securities represented by such
Global Security to the accounts of institutions that have accounts with such
Depositary ("participants"). The accounts to be credited shall be designated by
the underwriters through which such Indenture Securities were sold. Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
for such Global Security or by participants or persons that hold through
participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Indenture Securities
represented by such Global Security for all purposes under the Indenture. Except
as set forth below, owners of beneficial interests in a Global Security will not
be entitled to have Indenture Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Indenture Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indenture.
Payments of principal of, premium, if any, and interest, if any, on
Indenture Securities registered in the name of or held by a Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security representing such Indenture
Securities. None of O&R, the Trustee or any paying agent for such Indenture
Securities will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in a Global Security for such Indenture Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
O&R expects that the Depositary for Indenture Securities of a series, upon
receipt of any payment of principal, premium, if any, or interest, if any, in
respect of a Global Security will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depositary. O&R also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities registered in "street name," and will be the responsibility of
such participants.
If a Depositary for Indenture Securities of a series is at any time
unwilling or unable to continue as Depositary and a successor Depositary is not
appointed by O&R within 90 days, O&R will issue Indenture Securities of such
series in definitive form in exchange for the Global Security or Global
Securities representing the Indenture Securities of such series. In addition,
O&R may at any time and in its sole discretion determine not to have any
Indenture Securities of a series represented by one or more Global Securities
and, in such event, will issue Indenture Securities of such series in definitive
form in exchange for the Global Security or Global Securities representing such
Indenture Securities. Further, if O&R so specifies with respect to the Indenture
Securities of a series, each person specified by the Depositary of the Global
Security representing Indenture Securities of such series may, on terms
acceptable to O&R and the Depositary for such Global Security, receive Indenture
Securities of the series in definitive form. In any such instance, each person
so specified by the Depositary of the Global Security will be entitled to
physical delivery in definitive form of Indenture Securities of the series
represented by such Global Security equal in principal amount to such person's
beneficial interest in the Global Security.
Payments and Paying Agents: Payment of principal of and premium, if any,
on Indenture Securities will be made against surrender of such Indenture
Securities at The Bank of New York, 101 Barclay Street, Stock Transfer Division,
New York, New York 10286. Unless otherwise indicated in the prospectus
supplement, payment of any installment of interest on Indenture Securities will
be made to the person in whose name such Indenture Security is registered at the
close of business on the record date for such interest. Unless otherwise
indicated in the prospectus supplement, payments of such interest will be made
at The Bank of New York, or by a check mailed to each holder of an Indenture
Security at such holder's registered address.
All moneys paid by O&R to a paying agent for the payment of principal of,
premium, if any, or interest, if any, on any Indenture Security that remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to O&R and the holder of such
Indenture Security entitled to receive such payment will thereafter look only to
O&R for payment thereof. (Section 12.05) However, any such payment shall be
subject to escheat pursuant to state abandoned property laws.
Consolidation, Merger and Sale: The Indenture permits O&R, without the
consent of the holders of any of the Indenture Securities, to consolidate with
or merge into any other corporation or sell, transfer or lease its assets as an
entirety or substantially as an entirety to any person, provided that: (i) the
Successor is a corporation organized under the laws of the United States of
America or any state thereof; (ii) the Successor assumes O&R's obligations under
the Indenture and the Indenture Securities; (iii) immediately after giving
effect to the transaction, no Event of Default (see "Default and Certain Rights
on Default") and no event that, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing; and (iv)
certain other conditions are met. (Section 11.02) The Indenture does not
restrict the merger of another corporation into O&R.
Modification of the Indenture: The Indenture contains provisions
permitting O&R and the Trustee, without the consent of the holders of the
Indenture Securities, to establish, among other things, the form and terms of
any series of Indenture Securities issuable thereunder by one or more
supplemental indentures, and, with the consent of the holders of a majority in
aggregate principal amount of the Indenture Securities of any series at the time
outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture with respect
to Indenture Securities of such series, or modifying in any manner the rights of
the holders of the Indenture Securities of such series; provided, however, that
no such supplemental indenture shall (i) extend the fixed maturity, or the
earlier optional date of maturity, if any, of any Indenture Security of a
particular series or reduce the principal amount thereof or the premium thereon,
if any, or reduce the rate or extend the time of payment of interest thereon, or
make the principal thereof or premium, if any, or interest thereon payable in
any coin or currency other than that provided in the Indenture Security, without
the consent of the holder of each Indenture Security so affected, or (ii) reduce
the principal amount of Indenture Securities of any series, the holders of which
are required to consent to any such supplemental indenture, without the consent
of the holders of all Indenture Securities of such series outstanding
thereunder. (Sections 10.01 and 10.02)
Default and Certain Rights on Default: The Indenture provides that the
Trustee or the holders of 25% or more in aggregate principal amount of Indenture
Securities of a series outstanding thereunder may declare the principal of all
Indenture Securities of such series to be due and payable immediately, if any
Event of Default with respect to such series of Indenture Securities shall occur
and be continuing. However, if all defaults with respect to Indenture Securities
of such series (other than non-payment of accelerated principal) are cured, the
holders of a majority in aggregate principal amount of the Indenture Securities
of such series outstanding thereunder may waive the default and rescind the
declaration and its consequences. Events of Default with respect to a series of
Indenture Securities include (unless specifically deleted in the supplemental
indenture or Board Resolution under which such series of Indenture Securities is
issued, or modified in any such supplemental indenture):
(i) failure to pay interest when due on any Indenture Security of such
series, continued for 30 days;
(ii) failure to pay principal or premium, if any, when due on any
Indenture Security of such series;
(iii) failure to perform any other covenant of O&R in the Indenture or the
Indenture Securities of such series (other than a covenant included
in the Indenture or the Indenture Securities solely for the benefit
of series of Indenture Securities other than such series), continued
for 60 days after written notice from the Trustee or the holders of
25% or more in aggregate principal amount of the Indenture
Securities of such series outstanding thereunder;
(iv) certain events of bankruptcy, insolvency or reorganization; and
(v) any other Event of Default as may be specified for such series.
(Section 6.01)
The Indenture provides that the holders of a majority in aggregate
principal amount of the Indenture Securities of any series outstanding
thereunder may, subject to certain exceptions, direct the time, method and place
of conducting any proceeding for any remedy available to, or exercising any
power or trust conferred upon, the Trustee with respect to Indenture Securities
of such series and may on behalf of all holders of Indenture Securities of such
series waive any past default and its consequences with respect to Indenture
Securities of such series, except a default in the payment of the principal of
or premium, if any, or interest on any of the Indenture Securities of such
series.(Section 6.06)
Holders of Indenture Securities of any series may not institute any
proceeding to enforce the Indenture unless the Trustee thereunder shall have
refused or neglected to act for 60 days after a request and offer of
satisfactory indemnity by the holders of 25% or more in aggregate principal
amount of the Indenture Securities of such series outstanding thereunder, but
the right of any holder of Indenture Securities of any series to enforce payment
of principal of or premium, if any, or interest on the holder's Indenture
Securities when due shall not be impaired. (Section 6.04)
The Trustee is required to give the holders of Indenture Securities of any
series notice of defaults with respect to such series (Events of Default
summarized above, exclusive of any grace period and irrespective of any
requirement that notice of default be given) known to it within 90 days after
the happening thereof, unless cured before the giving of such notice, but,
except for defaults in payments of principal of, premium, if any, or interest on
the Indenture Securities of such series, the Trustee may withhold notice if and
so long as it determines in good faith that the withholding of such notice is in
the interests of such holders. (Section 6.07)
O&R is required to deliver to the Trustee each year an Officers'
Certificate stating whether such officers have obtained knowledge of any default
by O&R in the performance of certain covenants and, if so, specifying the nature
thereof. (Section 4.06)
Concerning the Trustee: The Indenture provides that the Trustee shall,
prior to the occurrence of any Event of Default with respect to the Indenture
Securities of any series and after the curing or waiving of all Events of
Default with respect to such series which have occurred, perform only such
duties as are specifically set forth in the Indenture. During the existence of
any Event of Default with respect to the Indenture Securities of any series, the
Trustee shall exercise such of the rights and powers vested in it under the
Indenture with respect to such series and use the same degree of care and skill
in their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs. (Section 7.01)
The Trustee may acquire and hold Indenture Securities and, subject to
certain conditions, otherwise deal with O&R as if it were not the Trustee under
the Indenture.
(Section 7.04)
The Chase Manhattan Bank, which is the Trustee under the Indenture, is a
participating bank under O&R's revolving credit agreements, and is a depository
for funds and performs other services for, and transacts other banking business
with, O&R and its affiliates in the normal course of business.
Satisfaction and Discharge of Indenture; Defeasance: The Indenture may be
discharged upon payment of the principal of, premium, if any, and interest on
all the Indenture Securities and all other sums due under the Indenture. In
addition, the Indenture provides that if, at any time after the date of the
Indenture, O&R, if so permitted with respect to Indenture Securities of a
particular series, shall deposit with the Trustee, in trust for the benefit of
the holders thereof, (i) funds sufficient to pay, or (ii) such amount of
obligations issued or guaranteed by the United States of America as will, or
will together with the income thereon without consideration of any reinvestment
thereof, be sufficient to pay all sums due for principal of, premium, if any,
and interest on the Indenture Securities of such series, as they shall become
due from time to time, and certain other conditions are met, the Trustee shall
cancel and satisfy the Indenture with respect to such series to the extent
provided therein. (Sections 12.01 and 12.02) The prospectus supplement
describing the Indenture Securities of such series will more fully describe the
provisions, if any, relating to such cancellation and satisfaction of the
Indenture with respect to such series.
Reports Furnished Securityholders: O&R will furnish the holders of
Indenture Securities copies of all annual financial reports distributed to its
stockholders generally as soon as practicable after the mailing of such material
to the stockholders.(Section 4.07)
PLAN OF DISTRIBUTION
O&R will offer the debt securities through one or more underwriters. The
names of the managing underwriter or underwriters and any other underwriters,
and the terms of the transaction, including compensation of the underwriters and
dealers, if any, will be set forth in the prospectus supplement relating to the
offering of the debt securities. Only underwriters named in a prospectus
supplement will be deemed to be underwriters in connection with the debt
securities described therein. Firms not so named will have no direct or indirect
participation in the underwriting of such debt securities, although such a firm
may participate in the distribution of such debt securities under circumstances
entitling it to a dealer's commission. It is anticipated that any underwriting
agreement pertaining to any debt securities will (1) entitle the underwriters to
indemnification by O&R against certain civil liabilities under the Securities
Act of 1933, as amended, or to contribution for payments the underwriters may be
required to make in respect thereof, (2) provide that the obligations of the
underwriters will be subject to certain conditions precedent, and (3) provide
that the underwriters generally will be obligated to purchase all such debt
securities if any are purchased. The underwriters may engage in transactions
with, or perform services for, O&R in the ordinary course of business.
In connection with an offering made hereby, the underwriters may purchase
and sell the debt securities in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the underwriters in connection with an offering.
Stabilizing transactions consist of certain bids or purchases for the purpose of
preventing or delaying a decline in the market price of the debt securities, and
short positions created by the underwriters involve the sale by the underwriters
of a greater aggregate principal amount of debt securities than they are
required to purchase from O&R. The underwriters also may impose a penalty bid,
whereby selling concessions allowed to broker-dealers in respect of the debt
securities sold in the offering may be reclaimed by the underwriters if such
debt securities are repurchased by the underwriters in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the debt securities, which may be higher than the price that
might otherwise prevail in the open market; and these activities, if commenced,
may be discontinued at any time. These transactions may be affected in the
over-the-counter market or otherwise.
The anticipated date of delivery of the debt securities will be as set
forth in the prospectus supplement relating to the offering of the debt
securities.
<PAGE>
LEGAL MATTERS
The validity of the debt securities and certain other related legal
matters will be passed upon for O&R by John D. McMahon, Esq., Senior Vice
President and General Counsel of Con Edison. Certain legal matters in connection
with the debt securities will be passed upon for the Underwriters by Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019-6092.
Dewey Ballantine LLP from time to time has performed some services for
subsidiaries of Con Edison.
EXPERTS
The consolidated financial statements of O&R as of December 31, 1999 and
for the year then ended incorporated in this prospectus by reference to the
combined Annual Report on Form 10-K of Con Edison, Consolidated Edison Company
of New York, Inc., and O&R for the year ended December 31, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The 1998 and 1997 financial statements and schedules of O&R, incorporated
by reference in this prospectus and the registration statement of which it is a
part, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their reports with respect thereto and are included herein in
reliance upon said firm as experts in giving said reports.
