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Rule 424(b)(3)
File Nos. 333-62295
333-62295-01
333-62295-02
PRICING SUPPLEMENT NO. 3 DATED JULY 26, 2000
(to Prospectus dated July 30, 1999
and Prospectus Supplement dated July 30, 1999)
PENNSYLVANIA ELECTRIC COMPANY
Medium Term Notes, Series E, Tranche 3
Trade Date: July 26, 2000
Principal Amount: $33,000,000
Original Issue Date: August 2, 2000
Maturity Date: August 1, 2005
Interest Rate: 7.50%
Interest Payment Dates: February 1 and August 1, commencing
February 1, 2001
The record date for payment on the
Notes will be the Business Day
immediately preceding the next
Interest Payment Date.
Any payment required to be made in
respect of a Note on a date that is
not a Business Day for such Note
need not be made on such date, but
may be made on the next succeeding
Business Day with the same force and
effect as if made on such date, and
no additional interest shall accrue
as a result of such delayed amount.
Agents' Discounts or Commissions:
$165,000
Net Proceeds to Company $32,835,000
Additional Terms: $25 million in principal amount of
the Notes are being sold to Banc of
America Securities LLC as principal
in this transaction for resale to
one or more investors or other
purchasers at varying prices
related to prevailing market
conditions at the time or times of
resale as determined by Banc of
America Securities LLC. $8 million
in principal amount of the Notes
are being sold through Salomon
Smith Barney acting as agent.
Certain legal matters will be passed
upon for the Company by Thelen Reid
& Priest LLP and for the
underwriters by Winthrop, Stimson,
Putnam and Roberts.
Optional Redemption The Notes will be redeemable, as a
whole or in part, at the Company's
option, at any time or from time to
time, on at least 30 days, but not
more than 60 days, prior notice
mailed to the registered address of
each holder of the Notes. The
redemption prices will be equal to
the greater of (1) 100% of the
principal amount of the Notes to be
redeemed or (2) the sum of the
present values of the Remaining
Scheduled Payments (as defined
below) discounted, on a semiannual
basis (assuming a 360-day year
consisting of twelve 30-day months),
at a rate equal to the sum of the
Treasury Rate (as defined below) and
10 basis points. In each case
accrued interest will be payable to
the redemption date.
"Treasury Rate" means, with respect
to any redemption date, the rate per
annum equal to the semiannual
equivalent yield to maturity of the
Comparable Treasury Issue, assuming
a price for the Comparable Treasury
Issue (expressed as a percentage of
its principal amount) equal to the
Comparable Treasury Price for such
redemption date.
"Comparable Treasury Issue" means
the United States Treasury security
selected by an Independent
Investment Banker as having a
maturity comparable to the remaining
term of the Notes that would be
utilized, at the time of selection
and in accordance with customary
financial practice, in pricing new
issues of corporate debt securities
of comparable maturity to the
remaining term of such Notes.
"Independent Investment Banker"
means one of the Reference Treasury
Dealers appointed by the Company.
"Comparable Treasury Price" means,
with respect to any redemption date,
the average of the Reference
Treasury Dealer Quotations.
"Reference Treasury Dealer
Quotations" means, with respect to
each Reference Treasury Dealer and
any redemption date, the average, as
determined by the Senior Note
Trustee, of the bid and asked prices
for the Comparable Treasury Issue
(expressed in each case as a
percentage of its principal amount)
quoted in writing to the Senior Note
Trustee by such Reference Treasury
Dealer at 3:30 p.m., New York City
time, on the third business day
preceding such redemption date.
"Senior Note Trustee" shall mean the
United States Trust Company of New
York or its successor.
"Reference Treasury Dealer" means
each of Banc of America Securities
LLC and Salomon Smith Barney Inc.
and their respective successors. If
either of the foregoing shall cease
to be a primary U.S. Government
securities dealer (a "Primary
Treasury Dealer"), the Company shall
substitute another nationally
recognized investment banking firm
that is a Primary Treasury Dealer.
"Remaining Scheduled Payments"
means, with respect to each Note to
be redeemed, the remaining scheduled
payments of principal of and
interest on such Note that would be
due after the related redemption
date but for such redemption. If
such redemption date is not an
interest payment date with respect
to such Note, the amount of the next
succeeding scheduled interest
payment on such Note will be reduced
by the amount of interest accrued on
such Note to such redemption date.
On and after the redemption date,
interest will cease to accrue on the
Notes or any portion of the Notes
called for redemption (unless the
Company defaults in the payment of
the redemption price and accrued
interest). On or before the
redemption date, the Company will
deposit with a paying agent (or the
Senior Note Trustee) money
sufficient to pay the redemption
price of and accrued interest on the
Notes to be redeemed on such date.
If less than all the Notes of any
series are to be redeemed, the Notes
to be redeemed shall be selected by
the Trustee by such method as the
Senior Note Trustee shall deem fair
and appropriate.
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