Registration Statement No. 33-31436
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
POST-EFFECTIVE AMENDMENT NO. 1
TO
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PECO ENERGY COMPANY
(formerly known as Philadelphia Electric Company)
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-0970240
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P. O. Box 8699
2301 Market Street, Philadelphia, PA 19101
(215) 841-4000
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(Address, including zip code, and telephone number,
including area code, of principal executive offices)
M. W. Rimerman Vice President - Finance and Treasurer
P. O. Box 8699
2301 Market Street, Philadelphia, PA 19101
(215) 841-4000
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(Name and address, including zip code, and telephone number,
including area code, of agent for service)
with copies to:
James W. Durham, Esq. Robert C. Gerlach, Esq.
Senior Vice President and General Counsel Ballard Spahr Andrews & Ingersoll
P. O. Box 8699 1735 Market Street, 51st Floor
Philadelphia, PA 19101 Philadelphia, PA 19103-7599
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$200,000,000
PECO ENERGY COMPANY
COLLATERALIZED MEDIUM-TERM NOTES, SERIES A
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
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PECO Energy Company (formerly known as Philadelphia Electric Company)
(Company) may from time to time offer its Collateralized Medium-Term Notes,
Series A (Series A Notes), in an aggregate principal amount of up to
$200,000,000. The Series A Notes will be offered at maturities, which may
vary from 9 months to 30 years from their dates of issuance, and may be
subject to redemption at the option of the Company. Each Series A Note
will bear interest at a fixed rate as set forth in the pricing supplement
(Pricing Supplement) to this Prospectus applicable to such Series A Note.
See "DESCRIPTION OF SERIES A NOTES AND NOTE INDENTURE." The Series A Notes
will be secured by a series of the Company's First and Refunding Mortgage
Bonds to be issued and pledged to First Fidelity Bank, National Association
(successor to Fidelity Bank, National Association), acting as trustee under
the Collateralized Note Indenture. See "DESCRIPTION OF SERIES A FIRST
MORTGAGE BONDS AND MORTGAGE."
The issue price, interest rate, maturity date, and optional redemption
provisions of each Series A Note will be established at the time of
issuance of such Note and set forth therein and in the Pricing Supplement.
The Series A Notes will be issued in book-entry form or, in certain
circumstances, fully registered certificated form. Beneficial interests in
Series A Notes in book-entry form will be shown on, and transfers thereof
will be effected only through, records maintained by The Depository Trust
Company, as Depositary, and its participants. See "DESCRIPTION OF SERIES A
NOTES AND NOTE INDENTURE -- BOOK-ENTRY NOTES."
The authorized denominations of Series A Notes will be $100,000 and any
larger amount that is an integral multiple of $1,000.
Interest on each Series A Note will accrue at a fixed rate from its
date of issuance and will be payable semiannually on each April 1 and
October 1 and at maturity or upon earlier redemption.
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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 OR ANY PRICING
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PRICE TO AGENTS' PROCEEDS TO THE
PUBLIC (1) COMMISSIONS (2) COMPANY (2) (3)
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Per Note ........ 100% .125%-.750% 99.250%-99.875%
Total ...........$200,000,000 $250,000-$1,500,000 $198,500,000-$199,750,000
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(1) The Series A Notes will be sold at 100% of their principal amount
except as may be provided in a Pricing Supplement hereto.
(2) The Company will pay a commission to Goldman, Sachs & Co., Morgan
Stanley & Co. Incorporated or Salomon Brothers Inc, each as an Agent
(collectively, the Agents), in the form of a discount, ranging from
.125% to .750%, depending upon the maturity of the Series A Note sold
through such Agent (or sold to such Agent as principal in circumstances
under which no other discount is agreed). The Company has agreed to
indemnify each Agent against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
(3) Before deducting other expenses payable by the Company, estimated to be
$465,000, including reimbursement of certain of the Agents' expenses.
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Offers to purchase the Series A Notes are being solicited, on a reasonable
efforts basis, from time to time by the Agents on behalf of the Company.
The Series A Notes may be sold to the Agents on their own behalf at
negotiated discounts. The Company reserves the right to sell the Series A
Notes directly on its own behalf. The Company also reserves the right to
withdraw, cancel or modify the offering contemplated hereby without notice.
No termination date for the offering of the Series A Notes has been
established. The Company or the Agents may reject any order as a whole or
in part. See "PLAN OF DISTRIBUTION."
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
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The date of this Prospectus is May 6, 1994
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IN CONNECTION WITH THE DISTRIBUTION OF THE SERIES A NOTES, THE AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS IN THE SERIES A NOTES WITH A VIEW TO
STABILIZING OR MAINTAINING THE MARKET PRICE OF THE SERIES A NOTES AT LEVELS
OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE
AND, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (Exchange Act) and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (SEC). Such
reports, proxy and other information filed by the Company may be inspected
and copied at the public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, and at certain of its regional
offices at 500 West Madison Street, Chicago, Illinois 60661-2511 and 7 World
Trade Center, New York, New York 10048. Copies of such material may
also be obtained from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Securities of
the Company are listed on the New York and Philadelphia Stock Exchanges,
where reports, proxy material and other information concerning the Company
may be inspected.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed (File No. 1-1401) with the SEC pursuant
to Section 13 of the Exchange Act by the Company are incorporated herein by
reference:
1. the Company's Annual Report on Form 10-K for the year ended
December 31, 1993;
2. the Company's Current Reports on Form 8-K dated March 18, 1994
and April 14, 1994.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of
the offering of the securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
all or a portion of which is incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in a Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A PROSPECTUS IS DELIVERED, UPON
WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL THE DOCUMENTS
DESCRIBED ABOVE UNDER "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE,"
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUESTS SHOULD BE DIRECTED TO
PECO ENERGY COMPANY, FINANCIAL DIVISION, S21-1, P.O. BOX 8699,
PHILADELPHIA, PA 19101, (215) 841-5741.
THE COMPANY
The Company was incorporated in Pennsylvania in 1929 and is an
operating utility which provides electric and gas service to the public in
southeastern Pennsylvania. Two subsidiaries own, and a third subsidiary
operates, the Conowingo Hydro-Electric Project (Conowingo Project), and one
distribution subsidiary provides electric service to the public in certain
areas of northeastern Maryland adjacent to the Conowingo Project.
The total area served by the Company and its subsidiaries covers 2,475
square miles. Electric service is supplied in an area of 2,340 square
miles with a population of about 3,700,000, including 1,600,000 in the City
of Philadelphia. Approximately 95% of the electric service area and 64% of
retail kilowatthour sales are in the suburbs around Philadelphia and in
northeastern Maryland, and 5% of the service area and 36% of such sales are
in the City of Philadelphia. In 1993, approximately 60% of the Company's
electric output was generated from nuclear sources. The Company estimates
for 1994 that 59% of its electric output will be generated from
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nuclear sources. Natural gas service is supplied in a 1,475-square-mile
area of southeastern Pennsylvania adjacent to Philadelphia with a
population of 1,900,000. The Company and its subsidiaries hold franchises
to the extent necessary to operate in the areas served.
The principal executive offices of the Company are located at 2301
Market Street, Philadelphia, Pennsylvania. Its mailing address is P.O.
Box 8699, Philadelphia, Pennsylvania 19101, and its telephone number is
(215) 841-4000.
USE OF PROCEEDS
The net proceeds from sale of the Series A Notes will be used for the
reduction of the outstanding amount of certain series of the Company's
previously issued higher-interest-rate long-term debt or higher-dividend-
rate preferred stock and/or for general corporate purposes.
DESCRIPTION OF SERIES A NOTES AND NOTE INDENTURE
The Series A Notes will be issued under a Collateralized Note
Indenture, dated as of October 1, 1989 (Note Indenture), between the
Company and Fidelity Bank, National Association (to which First Fidelity
Bank, National Association is successor), trustee (in such capacity, the
Note Trustee). A copy of the form of Note Indenture is filed as an exhibit
to the Registration Statement of which this Prospectus is a part. The
statements under this caption are brief summaries of certain provisions of
the Note Indenture and are qualified in their entirety by reference to the
provisions of the Note Indenture.
GENERAL
The Series A Notes may be issued from time to time under the Note
Indenture in an aggregate principal amount not to exceed $200,000,000.
Each Series A Note will bear interest at a fixed rate (not to exceed 12%)
to maturity specified in the applicable Pricing Supplement. The Series A
Notes will mature on any Business Day from 9 months to 30 years from the
date of issue, but not later than October 1, 2020, from the date of issue,
as selected by the purchaser and agreed to by the Company. Prior to
maturity, the Series A Notes may be subject to optional redemption by the
Company at the price or prices set forth in the applicable Pricing
Supplement. The Series A Notes will not be subject to any sinking fund or
mandatory redemption.
The applicable Pricing Supplement relating to each issue of Series A
Notes will describe the following terms of such Series A Notes: (1) the
price (expressed as a percentage of the aggregate principal amount thereof)
at which the Series A Notes will be issued; (2) the date on which the
Series A Notes will mature; (3) the rate at which the Series A Notes will
bear interest and the date from which any such interest will accrue; and
(4) the date, if any, after which, and the price at which, the Series A
Notes may be redeemed, in whole or in part, at the option of the Company.
The Company presently anticipates that the Series A Notes will be
issued in book-entry form (Book-Entry Notes) through The Depository Trust
Company (DTC) or other depositary selected by the Company (Depositary), see
"Book-Entry Notes" below. However, the Company reserves the right to issue
the Series A Notes in fully registered certificated form. If the Series A
Notes are issued in fully registered certificated form or in book-entry
form through a Depositary other than DTC, the applicable Pricing Supplement
will contain information with respect thereto.
The authorized denominations of the Series A Notes will be $100,000 and
any larger amount in integral multiples of $1,000 and will be exchangeable
for other Series A Notes of like tenor and aggregate principal amount,
without payment of any charge other than a sum sufficient to reimburse the
Company for any tax or other governmental charge incident to the exchange.
Transfers and exchanges of Series A Notes in certificated form may be made
at the principal corporate trust offices of First Fidelity Bank, National
Association, Philadelphia, Pennsylvania. The Company will not be required
to: (i) register the transfer of or exchange such Series A Notes during a
period beginning at the opening of business 15 days before any selection of
Series A Notes to be redeemed and ending at the close of business on the
day of mailing of the relevant notice of redemption; or (ii) register the
transfer of or exchange any Series A Note, or portion thereof, called for
redemption, except the unredeemed portion of any Series A Note being
redeemed in part (Section 2.07 of Article II).
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In order to secure its obligations under the Note Indenture, the
Company will deliver to the Note Trustee, concurrently with each issuance
of Series A Notes, a like principal amount of its First and Refunding
Mortgage Bonds, Medium-Term Note Series A (Series A First Mortgage Bonds).
The Series A First Mortgage Bonds will contain provisions for the payment
of principal or redemption price and interest corresponding to the
principal and interest payments on the Series A Notes. For a description
of the security for the Series A Notes, see "Security: Pledge of Series A
First Mortgage Bonds" below and "DESCRIPTION OF SERIES A FIRST MORTGAGE
BONDS AND MORTGAGE."
PAYMENT OF PRINCIPAL AND INTEREST
Each Series A Note will bear interest from its date of issue at the
rate per annum stated on the face thereof until the principal amount
thereof is paid or made available for payment. Interest on each Series A
Note will be payable semiannually on each April 1 and October 1 (each, an
Interest Payment Date) and at maturity or upon earlier redemption;
provided, however, that the first payment of interest on any Series A Note
with a date of issue between a Record Date and an Interest Payment Date
will be made on the next succeeding Interest Payment Date. The Record Date
with respect to any Interest Payment Date will be the fifteenth day of the
calendar month preceding such Interest Payment Date. Each payment of
interest in respect of an Interest Payment Date will include interest
accrued to but excluding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year or twelve 30-day months (Section
2.02 of Article II).
Interest payable and punctually paid or duly provided for on any
Interest Payment Date will be paid to the person in whose name a Series A
Note is registered at the close of business on the Record Date for such
Interest Payment Date; provided, however, that interest payable at maturity
or upon earlier redemption will be payable to the person to whom principal
shall be payable (Section 2.09 of Article II).
Any payment required to be made in respect of a Series A Note on a date
that is not a Business Day for such Series A 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 payment.
Both principal and interest payable at maturity or on redemption of the
Series A Notes will be payable at the principal corporate trust office of
First Fidelity Bank, National Association, Philadelphia, Pennsylvania.
Interest payable on any Interest Payment Date will be paid by check mailed
to the registered holders of the Series A Notes at their registered
addresses (Section 2.09 of Article II). Holders of greater than $10
million of Series A Notes will be entitled to interest payments by wire
transfer.
BOOK-ENTRY NOTES
Series A Notes may be issued in whole or in part in book-entry form
only through DTC or such other Depositary as is specified in the Pricing
Supplement. In order to facilitate the issuance of Book-Entry Notes, a
single certificated Series A Note (Global Note) registered in the name of
the Depositary or its nominee and representing Book-Entry Notes having the
same date of issue, maturity date, redemption provisions and interest rate
will be deposited with or on behalf of the Depositary. Upon the deposit of
a Global Note with or on behalf of the Depositary, the Depositary will
credit the accounts of persons held with it with the respective principal
amounts of the Series A Notes represented by such Global Note. Such
amounts shall be designated by the Agents with respect to such Series A
Notes. (Section 2.12 of Article II).
Ownership of beneficial interests in a Global Note will be limited to
persons that have accounts with the Depositary for such Global Note or its
nominee (participants) or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Note by
participants will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depositary or its nominee
(with respect to interests of participants) for such Global Note and on the
records of participants (with respect to interests of persons other than
participants).
Payment of principal of and any premium and interest on Book-Entry
Notes will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Note representing the Book-Entry Notes.
None of the Company, the Note Trustee or any agent of the Company or the
Note Trustee will
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have any responsibility or liability for any aspect of the Depositary's
records relating to or payments made on account of beneficial ownership
interests in a Global Note representing any Book-Entry Notes or for
maintaining, supervising or reviewing any of the Depositary's records
relating to such beneficial ownership interests.
The Company has been advised by DTC that upon receipt of any payment of
principal of or any premium or interest on any Global Note, DTC will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note
as shown on the records of DTC. Payments by participants to owners of
beneficial interests in a Global Note held through such participants will
be governed by standing instructions and customary practices, as is now the
case with securities held for customer accounts registered in "street
name," and will be the sole responsibility of such participants.
A Global Note representing Book-Entry Notes is exchangeable for
definitive Series A Notes in registered form, bearing interest at the same
rate, having the same date of issuance, maturity date and redemption
provisions, if any, and of differing denominations aggregating a like
amount, only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Note or if at
any time the Depositary ceases to be a clearing agency registered or in
good standing under the Exchange Act or (ii) the Company in its sole
discretion determines that all such Global Notes shall be exchangeable for
definitive Series A Notes in registered form. Upon such exchange, the
definitive Series A Notes will be registered in the names of the owners of
the beneficial interests in such Global Note as provided by the
Depositary's relevant participants (as identified by the Depositary holding
such Global Note).
Except as provided above, owners of beneficial interests in a Global
Note will not be entitled to receive physical delivery of Series A Notes in
definitive form and will not be considered the holders thereof for any
purpose under the Note Indenture. Accordingly, each person owning a
beneficial interest in a Global Note must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise
any rights of a Series A Noteholder under the Note Indenture. The laws of
some jurisdictions 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 Note.
The Note Indenture provides that the Depositary may grant proxies and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Series A Noteholder is entitled to give or take under the Note Indenture.
The Company understands that under existing industry practices, in the
event that the Company requests any action of Series A Noteholders or that
an owner of a beneficial interest in such a Global Note desires to give or
take any action which a Series A Noteholder is entitled to give or take
under the Note Indenture, the Depositary would authorize the participants
holding the relevant beneficial interests to give or take such action, and
such participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
DTC has advised the Company and the Agents as follows: DTC is a
limited-purpose trust company organized under the laws of the State of New
York, 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
Exchange Act. DTC was created to hold securities of its participants and
to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes
in accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers (including the Agents), banks, trust companies,
clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own DTC. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
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REDEMPTION, REPURCHASE AND REFUND
The Pricing Supplement relating to each Series A Note will indicate
whether such Series A Note will be redeemable by the Company prior to
maturity and, if redeemable, the redemption periods and the redemption
prices applicable thereto and any limitations relating to redemptions with
proceeds from borrowed funds having a lower cost of money than such Series
A Note. The Series A Notes will not be subject to any sinking fund or
mandatory redemption. The Company may redeem any of the Series A Notes
which are redeemable, either in whole or from time to time in part, upon
not less than 30 nor more than 45 days' notice by first class mail to the
registered holders of the Series A Notes to be redeemed at their registered
addresses (Section 4.05 of Article IV).
The Company may at any time purchase Series A Notes at any price in the
open market or otherwise. The Series A Notes so purchased by the Company
will be surrendered to the Note Trustee for cancellation.
SECURITY: PLEDGE OF SERIES A FIRST MORTGAGE BONDS
In order to secure its obligations under the Note Indenture to pay the
principal of and interest on the Series A Notes, the Company will deliver
to the Note Trustee, concurrently with each issuance of Series A Notes, a
like principal amount of its Series A First Mortgage Bonds. The Series A
First Mortgage Bonds will be issued under the Company's First and Refunding
Mortgage dated May 1, 1923, as amended and supplemented, including the
Seventy-third Supplemental Indenture dated as of October 1, 1989 relating
to the Series A First Mortgage Bonds (herein sometimes referred to as the
Mortgage). First Fidelity Bank, National Association (successor to
Fidelity Bank, National Association), is Trustee under the Mortgage (in
such capacity, the Mortgage Trustee). The Series A First Mortgage Bonds
will bear interest at times and in amounts sufficient to provide for the
payment of interest on the Series A Notes and will be redeemed at times and
in amounts that correspond to the required payments of principal of the
Series A Notes. The Company will deposit in trust with the Note Trustee
amounts sufficient to provide for the payment of any premium on any
optional redemption of the Series A Notes by the Company. Payments on the
Series A Notes will satisfy payment obligations on the Series A First
Mortgage Bonds relating thereto (Section 6.04 of Article VI). The Series A
First Mortgage Bonds will be secured by a first mortgage lien on certain
property owned by the Company and will rank on a parity with all other
mortgage bonds of the Company. At December 31, 1993, the Company had
outstanding $4,297,605,000 aggregate principal amount of mortgage bonds.
See "DESCRIPTION OF SERIES A FIRST MORTGAGE BONDS AND MORTGAGE."
The Company covenants and agrees under the Note Indenture that upon the
required payment of principal becoming due and payable with respect to any
Series A Notes, it will redeem Series A First Mortgage Bonds in an
aggregate principal amount of such Series A Notes becoming due and payable
(Section 5.04 of Article V).
ADDITIONAL NOTES
Additional Notes, unlimited as to principal amount, may be issued from
time to time in one or more series under the Note Indenture (Section 2.03
of Article II). Such additional Notes may not be issued unless the Note
Trustee receives mortgage bonds of the Company equal to the aggregate
principal amount of the additional Notes to be issued and meeting the debt
service requirements of such additional Notes (Section 3.01 of Article
III). All Notes from time to time outstanding under the Note Indenture,
including the Series A Notes, will be equally secured thereunder and are
hereinafter referred to as Notes.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default
under the Note Indenture: (a) failure to pay any interest on any Note when
due, continued for 60 days; (b) failure to pay principal of (or premium, if
any, on) any Note when due; or (c) if outstanding mortgage bonds shall have
been declared due and payable prior to their stated maturities (Section
7.01 of Article VII).
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If an Event of Default other than an Event of Default described under
(c) above occurs and is continuing, the Note Trustee may, and upon request
of the holders of 25% in principal amount of all Notes then outstanding
shall, declare the principal of all Notes to be immediately due and
payable. If an Event of Default described under (c) above occurs, the
principal of all Notes then outstanding shall become due and payable
immediately; provided, however, that a waiver of default and rescission of
the declaration of acceleration of the mortgage bonds pursuant to the
provisions of the Mortgage shall also constitute a waiver of the Event of
Default described under (c) above and its consequences (Section 7.02 of
Article VII).
Upon the issuance of additional Notes, the Company is required to file
with the Note Trustee documents and reports with respect to absence of
default.
MODIFICATION OF INDENTURE
The Note Indenture may be amended or supplemented from time to time for
various purposes, including the issuance of additional series of Notes, to
provide for the acceptance of a successor trustee or co-trustee and to
modify, eliminate or add provisions to the extent necessary or helpful to
qualify the Note Indenture under the Trust Indenture Act of 1939 without
the consent of Noteholders. With the consent of the holders of not less
than a majority in principal amount of the Series A Notes affected, the
Company and the Note Trustee are empowered to change the Note Indenture in
any way except (a) to reduce the amount or extend the due dates of or the
principal of or interest on the Series A Notes, (b) to reduce the
percentage of Noteholders required to effect changes in the Note Indenture,
(c) to change any obligation of the Company to maintain an office or agency
for the payment of the Series A Notes or (d) to modify or waive certain
provisions of the Note Indenture, except to increase the percentage of
Noteholders necessary for such action (Section 11.02 of Article XI).
NOTE TRUSTEE
First Fidelity Bank, National Association (successor to Fidelity Bank,
National Association) will be the Note Trustee under the Note Indenture.
First Fidelity Bank, National Association also serves as Mortgage Trustee
under the Mortgage. See "DESCRIPTION OF SERIES A FIRST MORTGAGE BONDS AND
MORTGAGE -- Mortgage Trustee."
DESCRIPTION OF SERIES A FIRST MORTGAGE BONDS AND MORTGAGE
The Series A First Mortgage Bonds will be issued under the Company's
Mortgage dated May 1, 1923, as amended and supplemented, including the
Seventy-third Supplemental Indenture dated as of October 1, 1989 relating
to the Series A First Mortgage Bonds. The Series A First Mortgage Bonds
will be delivered to the Note Trustee on each date that Series A Notes are
issued in an amount equal to such Series A Notes. Copies of the First and
Refunding Mortgage, the supplemental indentures thereto, including the
Seventy-third Supplemental Indenture dated as of October 1, 1989, are on
file with the SEC as exhibits to the Registration Statement covering the
Series A Notes or as exhibits to other documents.
The following description of the Series A First Mortgage Bonds and
brief summaries of certain Mortgage provisions are qualified in their
entirety by the provisions of the Mortgage.
The Series A First Mortgage Bonds will have a stated interest rate of
12% per annum, with interest payable on the Interest Payment Dates for the
Series A Notes; will mature on October 1, 2020, the maximum maturity of the
Series A Notes; and will be redeemed by the Company in amounts and at times
corresponding to the maturities of the Series A Notes. The Company will be
entitled to a credit against the Series A First Mortgage Bonds to the
extent it makes payments directly on the Series A Notes and to the extent
that interest due on the Series A First Mortgage Bonds exceeds interest due
on the Series A Notes. At the time any Series A Notes cease to be
outstanding under the Note Indenture, the Note Trustee will surrender to
the Mortgage Trustee at the Company's request an equal aggregate principal
amount of Series A First Mortgage Bonds.
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SECURITY
The Series A First Mortgage Bonds will be secured equally with all
other mortgage bonds outstanding or hereafter issued under the Mortgage by
the lien of the Mortgage which, subject to minor exceptions and certain
excepted encumbrances as defined in the Mortgage and to the Mortgage
Trustee's prior lien for compensation and expenses, constitutes a first
lien on all the Company's properties (including its undivided fractional
interests in certain properties), consisting principally of electric
generating stations, electric transmission and distribution lines and
substations, gas production plants, gas distribution facilities and general
office and service buildings, other than property which has been released
from the lien of the Mortgage in accordance with the terms thereof.
Under the Atomic Energy Act, neither the Mortgage Trustee nor any other
transferee of the Company's property may operate a nuclear generating
station without authorization from the NRC.
The Company has pledged with the Mortgage Trustee, as additional
security for the Series A First Mortgage Bonds and all other mortgage bonds
now outstanding or hereafter issued under the Mortgage, all of the common
stock of PECO Energy Power Company (formerly known as Philadelphia Electric
Power Company) (a subsidiary of the Company). The Company reserves broad
rights with respect thereto and also the right to sell or dispose of said
common stock so long as the Company shall not be in default under the terms
of the Mortgage.
No securities may be issued by the Company which will rank ahead of the
mortgage bonds as to security. The Company may acquire property subject to
prior liens, but, if such property is made the basis for the issuance of
additional bonds under the Mortgage, all additional mortgage bonds issued
under the prior lien after acquisition of the property by the Company must
be pledged under the Mortgage (Sections 5, 6 and 7 of Article V).
AUTHENTICATION AND DELIVERY OF ADDITIONAL BONDS
The Mortgage permits the issuance from time to time of additional
mortgage bonds thereunder without limit as to aggregate amount, upon the
terms and conditions provided in Article II thereof, which are summarized
briefly below:
Such additional mortgage bonds may be in principal amount equal to:
(1) the principal amount of underlying mortgage bonds secured by
prior lien upon property acquired by the Company after March 1, 1937
and deposited with the Mortgage Trustee under the Mortgage (paragraph
(a) of Section 3 of Article II);
(2) the principal amount of any such underlying mortgage bonds,
redeemed or retired, or for the payment, redemption or retirement of
which funds have been deposited in trust (paragraph (b) of Section 3 of
Article II);
(3) the principal amount of mortgage bonds authenticated under the
Mortgage on or after March 1, 1937 which have been delivered to the
Mortgage Trustee (paragraph (c) of Section 3 of Article II);
(4) the principal amount of mortgage bonds issued under the
Mortgage on or after March 1, 1937, which are being refunded or
redeemed, if funds for said refunding or redemption have been deposited
with the Mortgage Trustee (paragraph (d) of Section 3 of Article II);
(5) an amount not exceeding 60% of the actual cost or the fair
value, whichever is less, of the net amount of permanent additions to
the property subject to the lien of the Mortgage, made or acquired
after November 30, 1941, and of additional plants or property acquired
by the Company after November 30, 1941, and to be used in connection
with its electric or gas business as part of one connected system and
located in Pennsylvania or within 150 miles of Philadelphia (paragraph
(e) of Section 3 of Article II; Sections 15 and 16 of Article II); and
(6) the amount of cash deposited with the Mortgage Trustee, which
cash shall not at any time exceed $3,000,000 or 10% of the aggregate
principal amount of bonds then outstanding under the Mortgage, which-
8
<PAGE>
ever is greater, and which cash may subsequently be withdrawn to
the extent of 60% of capital expenditures, as described in Item 5 above
(paragraph (f) of Section 3 of Article II).
No additional bonds may be issued under the Mortgage as outlined in
Items (5) and (6) and, in certain cases, Item (3) hereinabove, unless the
net earnings of the Company (as defined in Section 4 of Article II), after
deductions for amounts set aside for renewal and replacement or
depreciation reserves and before provision for income taxes, for 12
consecutive calendar months within the 15 calendar months immediately
preceding the application for such mortgage bonds shall have been equal to
at least twice the annual interest charges on all bonds outstanding under
the Mortgage (including those then applied for) and any other mortgage
bonds secured by a lien on property of the Company. For purposes of this
test, the Company has not included in earnings Allowance for Funds Used
During Construction which is included in net income in the Company's
consolidated financial statements in accordance with the prescribed system
of accounts. The coverages under the earnings test of the Mortgage and the
ratios of earnings to fixed charges are or will be included under "Part I,
Item 1. Business -- Capital Requirements and Financing Activities" of the
Company's Annual Report to the SEC on Form 10-K and under "Part I.
Financial Information, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the Company's Quarterly
Reports to the SEC on Form 10-Q described above under "Incorporation of
Certain Documents By Reference." At December 31, 1993, the Company had at
least $918 million of available property additions (the most restrictive
issuance test of the Mortgage at December 31, 1993) against which $551
million of mortgage bonds could have been issued. In addition, at December
31, 1993, the Company was entitled to issue approximately $3.2 billion of
mortgage bonds without regard to the earnings and property additions tests
against previously retired mortgage bonds. The Series A First Mortgage
Bonds will be issued against the bondable value of property additions (see
Item (5) above).
RELEASE AND SUBSTITUTION OF PROPERTY
The Company, while no event of default exists, may obtain the release
from the lien of the Mortgage of property subject thereto only upon the
deposit or pledge with the Mortgage Trustee of cash or purchase money
obligations, or in certain instances upon the substitution of other
property of equivalent value (Sections 1, 2 and 3 of Article VI). The
Mortgage also contains certain requirements relating to the withdrawal or
application of proceeds of released property and other funds held by the
Mortgage Trustee (Section 4 of Article VI).
CORPORATE EXISTENCE
The Company may consolidate or merge with or into or convey, transfer
or lease all of the mortgaged property as an entirety or substantially as
an entirety to any corporation lawfully entitled to acquire or lease and
operate the property, provided that such consolidation, merger, conveyance,
transfer or lease in no respect impairs the lien of the Mortgage or any
rights or powers of the Mortgage Trustee or the holders of the outstanding
mortgage bonds and provided that such successor corporation executes and
causes to be recorded an indenture which assumes all of the terms,
covenants and conditions of the Mortgage and any supplement thereto
(Sections 1 and 2 of Article VII).
DEFAULTS
Events of default are defined in the Mortgage as (a) default for 60
days in the payment of interest on bonds or sinking fund deposits under the
Mortgage, (b) default in the payment of principal of bonds under the
Mortgage, (c) default in the performance of any other covenant in the
Mortgage continuing for a period of 60 days after written notice from the
Mortgage Trustee, and (d) certain events of bankruptcy, insolvency or
reorganization, but in the case of reorganization only so long as the
Company's First and Refunding Mortgage Bonds, 13.05% Series due 1994 are
outstanding (Section 2 of Article VIII).
Upon the authentication and delivery of additional mortgage bonds, and
the release of cash or property, the Company is required to file with the
Mortgage Trustee documents and reports with respect to the absence of
default.
9
<PAGE>
RIGHTS OF BONDHOLDERS UPON DEFAULT
The holders of a majority in principal amount of all the outstanding
mortgage bonds may, upon the occurrence of an event of default, require the
Mortgage Trustee to accelerate the maturity of the mortgage bonds (Section
2 of Article VIII) and to enforce the lien of the Mortgage (Section 5 of
Article VIII). Any such acceleration of the maturity of the mortgage bonds
may, prior to any sale under the Mortgage, and upon the remedying of all
defaults, be annulled by the holders of at least a majority of the
outstanding mortgage bonds (Section 22 of Article VIII). The Mortgage
permits the Mortgage Trustee to require indemnity before proceeding to
enforce the lien of the Mortgage (Sections 5 and 7 of Article VIII).
AMENDMENTS
The Company and the Trustee may amend the Mortgage without the consent
of the holders of mortgage bonds: (1) to subject additional property to the
lien to the Mortgage; (2) to define the covenants and provisions permitted
under or not inconsistent with the Mortgage; (3) to add to the limitations
of the authorized amount, date of maturity, method, conditions and purposes
of issue of any bonds issued under the Mortgage; (4) to evidence the
succession of another corporation to the Company and the assumption by a
successor corporation of the covenants and obligations of the Company under
the Mortgage; (5) to make such provision in regard to matters or questions
arising under the Mortgage as may be necessary or desirable and not
inconsistent with the Mortgage (Section 1 of Article XI).
In addition, when the Company's First and Refunding Mortgage Bonds of
the 6-1/8% Series due 1997 no longer remain outstanding, the Company and
the Trustee may amend the Mortgage or modify the rights of the holders of
the mortgage bonds with the written consent of the holders of at least
66-2/3% of the principal amount of the mortgage bonds then outstanding;
provided, that no such amendment shall, without the written consent of the
holder of each outstanding mortgage bond affected thereby: (1) change the
date of maturity of the principal of, or any installment of interest on,
any mortgage bond, or reduce the principal amount of any mortgage bond or
the interest thereon or any premium payable on the redemption thereof, or
change any place of payment where, or currency in which, any mortgage bond
or interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the date of maturity
thereof; (2) reduce the percentage in principal amount of the outstanding
mortgage bonds, the consent of whose holders is required for any amendment,
waiver of compliance with the provisions of the Mortgage or certain
defaults and their consequences; (3) modify any of the amendment provisions
or Section 22 of Article VIII (relating to waiver of default), except to
increase any such percentage or to provide that certain other provisions of
the Mortgage cannot be modified or waived without the consent of the holder
of each mortgage bond affected thereby (Sections 2 and 3 of Article XI).
MORTGAGE TRUSTEE
First Fidelity Bank, National Association (successor to Fidelity Bank,
National Association), the Mortgage Trustee under the Mortgage, is also
registrar and disbursing agent for the Company's mortgage bonds. First
Fidelity Bank, National Association will be the Note Trustee and is also a
depository of the Company, from time to time makes loans to the Company and
is the trustee for three series of Pollution Control Revenue Bonds issued
for the benefit of the Company which are secured by bonds now outstanding
under the Mortgage.
EXPERTS
The consolidated financial statements and schedules of the Company
incorporated by reference in this Registration Statement have been audited
by Coopers & Lybrand, independent auditors, for the periods indicated in
their report thereon which is included in the Annual Report on Form 10-K
for the year ended December 31, 1993. The consolidated financial
statements and schedules audited by Coopers & Lybrand have been
incorporated herein by reference in reliance on their report given on their
authority as experts in accounting and auditing.
10
<PAGE>
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Ballard
Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania, who will rely on
Miles & Stockbridge as to certain matters of Maryland law and Cahill,
Wilinski & Cahill as to certain matters of New Jersey law. Certain legal
matters will be passed upon for the Agents by Drinker Biddle & Reath,
Philadelphia, Pennsylvania.
The statements as to matters of law and legal conclusions under
"DESCRIPTION OF SERIES A FIRST MORTGAGE BONDS AND MORTGAGE" have been
reviewed by Ballard Spahr Andrews & Ingersoll as to matters of Pennsylvania
law, Miles & Stockbridge as to matters of Maryland law and Cahill, Wilinski
& Cahill as to matters of New Jersey law, and such statements are included
herein upon the authority of such counsel.
PLAN OF DISTRIBUTION
The Series A Notes are being offered on a continual basis by the
Company through Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated
and Salomon Brothers Inc (collectively, the Agents), each of whom has
agreed to use its reasonable efforts to solicit purchases of the
Series A Notes. The Company will pay an Agent a commission of .125% to
.750% of the principal amount of Series A Notes sold through such Agent,
depending upon the maturity of such Series A Notes. The Company may sell
Series A Notes to any of the Agents acting as principal, at a discount to
be agreed upon at the time of sale, or a purchasing Agent may receive from
the Company a commission or discount equivalent to that set forth on the
cover page hereof in the case of any such principal transaction in which no
other discount is agreed to by the Company and such purchasing Agent. Such
Series A Notes may be resold to investors at prevailing market prices, or
at prices related thereto, at the time of such resale, as determined by the
Agents. The Company reserves the right to sell Series A Notes directly on
its own behalf. No commission will be payable on any Series A Notes sold
directly by the Company. The Company has agreed to reimburse the Agents
for certain expenses in connection with the offering of the Series A Notes.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at
a discount and, unless otherwise specified in the applicable Pricing
Supplement, such discount allowed to any dealer may include all or part
of the discount to be received from the Company. Unless otherwise indicated
in the applicable Pricing Supplement, any Note sold to an Agent as principal
will be purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to any
agency sale of a Note of identical maturity. After the initial public
offering of Notes to be resold to investors and other purchasers on a
fixed public offering price basis, the public offering price, concession
and discount may be changed.
The Company has agreed to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933 (Act)
or to contribute to payments such Agent may be required to make in respect
thereof. Each Agent may be deemed to be an "underwriter" within the
meaning of the Act with respect to Series A Notes sold through it. The
Company has agreed to reimburse the Agents for certain expenses.
Series A Notes may also be sold at the price to the public set forth in
the Pricing Supplement relating thereto to dealers who may resell to
investors. Such dealers may be deemed to be "underwriters" within the
meaning of the Act.
The Company will have the right, in its sole discretion, to accept
offers to purchase Series A Notes and may reject any proposal to purchase
Series A Notes in whole or in part. Each Agent will have the right, in its
discretion reasonably exercised, to reject any offer to purchase Series A
Notes received by it in whole or in part.
The Series A Notes are a new issue of securities and will not have an
established trading market when issued. The Series A Notes will not be
listed on any securities exchange. Each Agent may make a market in the
Series A Notes, but such Agent is not obligated to do so and may
discontinue any market-making at any time without notice. There can be no
assurance as to the existence or liquidity of a secondary market for any
Series A Notes, or that all or any of the Series A Notes will be sold.
11
<PAGE>
=================================== =====================================
NO DEALER, SALESMAN OR ANY
OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO $200,000,000
MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN PECO
THIS PROSPECTUS, AND IF GIVEN OR ENERGY
MADE SUCH INFORMATION OR COMPANY
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY COLLATERALIZED
ANY PURCHASER OR UNDERWRITER. MEDIUM-TERM NOTES, SERIES A
THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY
ANY OF THE SECURITIES COVERED BY
THIS PROSPECTUS TO ANY PERSON IN
ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION. NEITHER
DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS
HEREIN SET FORTH SINCE THE DATE
HEREOF.
---------- ----------
PROSPECTUS
CONTENTS
----------
PAGE
----
Statement of Available
Information .............. 2
Incorporation of Certain
Documents by Reference ... 2
The Company ................ 2 GOLDMAN, SACHS & CO.
Use of Proceeds ............ 3
Description of Series A
Notes and Note Indenture.. 3 MORGAN STANLEY & CO.
Description of Series A INCORPORATED
First Mortgage Bonds
and Mortgage ............. 7
Experts .................... 10 SALOMON BROTHERS INC
Legal Matters .............. 11
Plan of Distribution ....... 11
=================================== =====================================
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. Exhibits
Exhibit
Number
-------
24-1 Consent of Independent Accountants
24-2 Consent of Ballard Spahr Andrews & Ingersoll
24-3 Consent of Miles & Stockbridge
24-4 Consent of Cahill, Wilinski & Cahill
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, PECO Energy Company (formerly known as PHILADELPHIA ELECTRIC
COMPANY), certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Philadelphia,
Commonwealth of Pennsylvania on the 6th day of May, 1994.
PECO Energy Company
By: /s/ J.F. Paquette, Jr.
--------------------------------
J. F. Paquette, Jr.
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
- ---------------------- ----------------------------- --------------
/s/ J.F. Paquette, Jr. Chairman of the Board May 6, 1994
- ---------------------- and Director
J. F. Paquette, Jr. (Principal Executive Officer)
/s/ C.A. McNeill, Jr. President and Director May 6, 1994
- ---------------------- (Principal Operating Officer)
C. A. McNeill, Jr.
/s/ K.G. Lawrence Senior Vice President-Finance May 6, 1994
- ---------------------- (Principal Financial and
K. G. Lawrence Accounting Officer)
This registration statement or amendment has also been signed by
J.F. Paquette, Jr., Attorney-in-Fact, on behalf of the following Directors
on the date indicated:
Susan W. Catherwood Edithe J. Levit
M. Walter D'Alessio Kinnaird R. McKee
Nelson G. Harris Joseph J. McLaughlin
Joseph C. Ladd John M. Palms
Ronald Rubin
By: /s/ J.F. Paquette, Jr.
- --------------------------------
J.F. Paquette, Jr. May 6, 1994
Attorney-in-Fact
Exhibit 24-1
CONSENT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors,
PECO Energy Company:
We consent to the incorporation by reference in the registration
statement of PECO Energy Company, formerly known as Philadelphia Electric
Company, on Form S-3, with respect to the registration of $200,000,000 of
collateralized medium-term notes (Registration No. 33-31436), of our
reports dated January 31, 1994, on our audits of the consolidated financial
statements and financial statement schedules of PECO Energy Company and
Subsidiary Companies as of December 31, 1993 and 1992, and for each of the
three years in the period ended December 31, 1993, listed in Item 14 of the
1993 Annual Report of PECO Energy Company on Form 10-K. We also consent to
the reference to our firm under the heading "Experts".
/s/ Coopers & Lybrand
-------------------------------------------
Coopers & Lybrand
Philadelphia, Pennsylvania
May 6, 1994
Exhibit 24-2
CONSENT OF BALLARD SPAHR ANDREWS & INGERSOLL
To The Board of Directors,
PECO Energy Company:
We hereby consent to all references to our firm included in or made a
part of the Registration Statement.
/s/ Ballard Spahr Andrews & Ingersoll
-------------------------------------------
Ballard Spahr Andrews & Ingersoll
Philadelphia, Pennsylvania
May 6, 1994
Exhibit 24-3
CONSENT OF MILES & STOCKBRIDGE
To The Board of Directors,
PECO Energy Company:
We hereby consent to all references to our firm included in or made a
part of the Registration Statement.
/s/ Miles & Stockbridge
---------------------------------------
Miles & Stockbridge
Baltimore, Maryland
May 6, 1994
Exhibit 24-4
CONSENT OF CAHILL, WILINSKI & CAHILL
To The Board of Directors,
PECO Energy Company:
We hereby consent to all references to our firm included in or made a
part of the Registration Statement.
/s/ Cahill, Wilinski & Cahill
---------------------------------------------
Cahill, Wilinski & Cahill
Haddonfield, New Jersey
May 6, 1994
