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PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 3, 1995)
PORTLAND GENERAL ELECTRIC COMPANY
$50,000,000
MEDIUM-TERM NOTE SERIES V
(A SERIES OF FIRST MORTGAGE BONDS)
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
------------------------
Portland General Electric Company (the "Company") may offer from time to
time up to $50,000,000 aggregate principal amount of its Medium-Term Note Series
V (a series of First Mortgage Bonds) (the "Notes") having maturities from nine
months to thirty years and on other terms to be determined at the time or times
of sales.
The Notes will bear interest at fixed rates. Interest will accrue on each
Note from its date of issue and, unless otherwise specified in supplements
hereto ("Pricing Supplements"), will be payable on each June 15 and December 15
and at maturity. Payment of the principal of and interest on the Notes will be
secured by the lien of the Mortgage described herein and in the accompanying
Prospectus.
The interest rates and other variable terms of the Notes as described
herein will be established by the Company from time to time and set forth in
Pricing Supplements hereto. The interest rates and certain other variable terms
are subject to change by the Company, but no such change will affect any Note
theretofore issued or as to which an offer to purchase has been accepted by the
Company. If specified in the applicable Pricing Supplement, the Notes will be
redeemable prior to maturity at the option of the Company upon the terms and
conditions so specified. If specified in the applicable Pricing Supplement, the
Notes will be repayable at the option of the holders upon the terms and
conditions so specified. The Notes will not be subject to any sinking fund. The
Notes will be issued in denominations which are integral multiples of $1,000.
See "Description of the Notes".
The Notes will be issued in fully registered certificated or book-entry
form. Interests in 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. Owners of beneficial
interests in Notes issued in book-entry form will be entitled to physical
delivery of Notes in certificated form only under the limited circumstances
described herein.
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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 SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
================================================================================
PRICE TO AGENT PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(1)(2)
- -------------------------------------------------------------------------------
Per Note.................. 99.876 .101% 99.775%
- -------------------------------------------------------------------------------
Total..................... $49,938,000 $50,500 $49,887,500
===============================================================================
(1) The Company will pay to the agent named herein (the "Agent") a commission of
.101% of the principal amount of each Note sold through the Agent, depending
upon the maturity of the Note sold. The Company may also sell Notes to the
Agent, as principal, at a discount for resale at prevailing market prices at
the time or times of resale as determined by such Agent.
(2) Before deducting expenses payable by the Company estimated at $200,000.
Offers to purchase the Notes will be solicited on behalf of the Company
from time to time by the Agent. The Agent may also purchase Notes on their own
behalf. The Notes will not be listed on any securities exchange, and there can
be no assurance that any of the Notes offered by this Prospectus Supplement will
be sold or that there will be a secondary market therefor. The Company or the
Agent may reject, in whole or in part, any offer for a purchase of Notes. No
termination date for the offering of the Notes has been established. See "Plan
of Distribution" in this Prospectus Supplement.
------------------------
UBS Securities
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS AUGUST 26, 1996.
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CERTAIN RECENT DEVELOPMENTS
PLANNED MERGER OF PORTLAND GENERAL CORPORATION
On July 20, 1996, Portland General Electric Company's parent corporation,
Portland General Corporation, an Oregon corporation ("PGC"), entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Enron Corp., a
Delaware corporation ("Enron") and New Enron Corp., an Oregon corporation and
wholly owned subsidiary of Enron ("New Enron"), pursuant to which Enron will be
merged with and into New Enron with New Enron the surviving corporation in the
merger (the "Reincorporation Merger") immediately following which PGC will be
merged with and into New Enron, with New Enron the surviving corporation in the
merger (the "PGC Merger"). As a result of the Reincorporation Merger, (i) each
outstanding share of Enron common stock, par value $.10 per share ("Enron Common
Stock"), will be converted into one share of common stock, no par value, of New
Enron ("New Enron Common Stock"), and (ii) each outstanding share of Enron's
Cumulative Second Preferred Convertible Stock, par value $1.00 per share, each
outstanding share of Enron's 9.142% Perpetual Second Preferred Stock, par value
$1.00 per share and each share of any series of Preferred Stock, Second
Preferred Stock or Preference Stock of Enron issued after the date of the Merger
Agreement and issued and outstanding immediately prior to the effective time of
the Reincorporation Merger (together, the "Enron Preferred Stock") will be
converted into one share of a class or series of preferred stock of New Enron
having substantially equivalent rights, preferences and limitations as the
corresponding class or series of Enron Preferred Stock. As a result of the PGC
Merger, each outstanding share of PGC's common stock, par value $3.75 per share,
will be converted into one share of New Enron Common Stock. The PGC Merger is
conditioned upon, among other things, approval by the shareholders of each of
PGC and Enron, and the completion of regulatory procedures at the Oregon Public
Utility Commission and the Federal Energy Regulatory Commission. The companies
are hopeful that the regulatory procedures can be completed within twelve months
from the date of the Merger Agreement. The Merger Agreement may be terminated by
Enron if the average of the closing prices of Enron Common Stock during the 20
consecutive trading day period ending five trading days prior to the date of the
meeting of the shareholders of Enron is more than $47.25 per share, and may be
terminated by PGC if the average of the closing prices of Enron Common Stock
during such period is less than $36.25 per share. Following the PGC Merger, the
Company will be a subsidiary of New Enron.
DESCRIPTION OF THE NOTES
GENERAL
Up to $50,000,000 principal amount of Notes will be issued as a series of
First Mortgage Bonds (the "Bonds") under the Mortgage, which is defined and more
fully described in the accompanying Prospectus. The following summaries of
certain provisions of the Mortgage do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the provisions
of the Mortgage, including the definitions therein of certain terms. The terms
and conditions set forth below will apply to each Note unless otherwise
specified in the applicable Pricing Supplement.
The Mortgage creates a continuing lien to secure the payment of principal
of, and interest on, the Notes issued and to be issued thereunder. The Notes
rank pari passu with all other Bonds issued pursuant to the Mortgage and from
time to time outstanding.
The Notes will be issued only in fully registered certificated or
book-entry form without coupons and, except as may otherwise be provided in the
applicable Pricing Supplement, in denominations which are integral multiples of
$1,000. No charge will be made for any registration of transfer or exchange of
Notes, but the Company may require payment of a sum sufficient to cover any
stamp tax or other governmental charge that may be imposed in connection
therewith. In the case of Notes issued in book-entry form, all references herein
to the "holder" of such Notes are to The Depository Trust Company or its nominee
and not to the owner of a beneficial interest in such book-entry Notes. See
"Book-Entry Notes."
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Principal and interest will be payable, the transfer of the Notes will be
registrable, and Notes will be exchangeable for Notes bearing identical terms
and provisions at the office or agency of the Company in The City of New York
designated for such purpose; provided, however, that payment of interest, other
than interest at maturity (or on any date of redemption or repayment if a Note
is redeemed or repaid prior to maturity), may be made at the option of the
Company by check mailed to the address of the person in whose name the
applicable Note is registered at the close of business on the Regular Record
Date (as defined below under "Interest") as shown on the bond register
maintained by Marine Midland Bank, formerly The Marine Midland Trust Company of
New York, (the "Trustee"); provided further, however, that a holder of
$10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date (as defined hereinafter) shall be entitled to receive
payments of interest by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received by the Trustee not
less than sixteen days prior to the applicable Interest Payment Date. Interest
will be payable on each date specified in the Note on which an installment of
interest is due and payable (each, an "Interest Payment Date") and at maturity
(or, if applicable, upon redemption or repayment). If the original issue date of
a Note is between the Regular Record Date and the Interest Payment Date, the
initial interest payment will be made on the Interest Payment Date following the
next succeeding Regular Record Date to the registered holder on such next
succeeding Regular Record Date.
MATURITY
The Notes may be offered on a continuous basis and will mature on any day
from 9 months to 30 years from the date of issue, as agreed to by the purchaser
and the Company. The maturity date for each Note will be stated on the face
thereof.
INTEREST
Each Note will bear interest from the date of issue at the fixed rate per
annum stated on the face thereof until the principal amount thereof is paid or
made available for payment. Unless otherwise specified in the applicable Pricing
Supplement, interest will be payable semiannually on each June 15 and December
15 and at maturity (or, if applicable, upon redemption or repayment). The
"Regular Record Date" for the Notes will be the fifteenth day, whether or not a
Business Day (as defined hereinafter), next preceding the Interest Payment Date.
Interest on the Notes will be computed on the basis of a 360-day year of twelve
30-day months. If any Interest Payment Date or the maturity date (or, if
applicable, any date of redemption or repayment) of a Note falls on a day that
is not a Business Day, the payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or the maturity date (or any date of redemption or repayment), as the case may
be. Unless otherwise specified in the applicable Pricing Supplement, "Business
Day" means any day other than a Saturday or Sunday on which banks in the City of
New York are not required or authorized by law to close.
Interest payments shall be made in the amount of interest accrued from, and
including the next preceding Interest Payment Date in respect of which interest
has been paid or duly provided for (or from, and including, the date of issue,
if no interest has been paid with respect to such Note), to, but excluding, the
Interest Payment Date or the maturity date or date of redemption or repayment
(each, an "Interest Accrual Period"). The principal and interest payable at
maturity (or, if applicable, upon redemption or repayment) on each Note will be
paid upon maturity in immediately available funds against presentation of the
Note at the corporate trust office of the Trustee located at 140 Broadway -- A
Level, New York, New York 10005-1180. Interest payable at maturity (or, if
applicable, upon redemption or repayment) will be payable to the person to whom
the principal of the Note shall be paid.
REDEMPTION
The Notes will be subject to redemption by the Company on and after the
initial regular redemption date, if any, fixed at the time of sale and set forth
in the applicable Pricing Supplement (the "Initial Regular Redemption Date"). On
and after the Initial Regular Redemption Date with respect to any Note, such
Note
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will be redeemable in whole or in part in increments of $1,000 (provided that
any remaining principal amount of such Note shall be at least $100,000) at the
option of the Company at the Regular Redemption Price (as hereinafter defined),
determined in accordance with the following paragraph, together with interest
thereon payable to the date of redemption, on notice given no more than 90 nor
less than 30 days prior to the date of redemption. In the event such Note is
redeemable at the option of the Company, moneys remaining in the replacement
fund may be used to redeem such Note at the Regular Redemption Price.
The "Regular Redemption Price" for each Note subject to redemption at the
option of the Company shall initially be equal to a certain percentage (the
"Initial Regular Redemption Percentage") of the principal amount of such Note to
be redeemed and shall decline at each anniversary of the Initial Regular
Redemption Date with respect to such Note by a percentage (the "Annual Regular
Redemption Percentage Reduction"), if any, of the principal amount to be
redeemed until the Regular Redemption Price is 100% of such principal amount.
The Initial Regular Redemption Percentage and any Annual Regular Redemption
Percentage Reduction with respect to each Note subject to redemption at the
option of the Company prior to maturity will be fixed at the time of sale and
set forth in the applicable Pricing Supplement.
If no Initial Regular Redemption Date is indicated with respect to a Note,
such Note will not be redeemable at the option of the Company prior to maturity
otherwise than through the application of proceeds of the sale or disposition
substantially as an entirety of the Company's electric property at Portland,
Oregon, in which event such Note will be redeemable upon payment of the
principal amount thereof together with interest thereon payable to the date of
redemption.
OPTIONAL REPAYMENT
The Notes will be subject to repayment at the option of the holders on the
date(s), if any, fixed at the time of sale and set forth in the applicable
Pricing Supplement (the "Optional Repayment Date"). If no Optional Repayment
Date is indicated with respect to a Note, the Note may not be so repaid at the
option of the holder prior to maturity. On any Optional Repayment Date with
respect to any Note, such Note will be repayable in whole or in part in
increments of $1,000 (provided that any remaining principal amount of such Note
shall be at least $100,000) at the option of the holder at a repayment price
equal to 100% of the principal amount to be repaid, together with interest
thereon payable to the date of repayment. For any Note to be repaid in whole or
in part at the option of the holder, the Note must be received, with the form
entitled "Option to Elect Repayment" attached to the Note duly completed, by the
Trustee at 140 Broadway -- A Level, New York, New York 10005-1180, or such
address which the Company shall from time to time notify the holders of the
Note, not more than 60 nor less than 20 days prior to an Optional Repayment
Date. Exercise of such repayment option by the holder shall be irrevocable.
BOOK-ENTRY NOTES
The Notes may be issued in whole or in part in book-entry form ("Book-Entry
Notes"). Upon issuance, all such Book-Entry Notes having identical terms and
provisions will be represented by a single global security (each, a "Global
Note"). Unless otherwise specified in a Pricing Supplement, each Global Note
representing Book-Entry Notes will be deposited with, or on behalf of, The
Depository Trust Company ("DTC"), and registered in the name of a nominee of
DTC.
DTC has advised the Company and the Agent that it 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, as amended. DTC holds
securities that its participants ("Participants") deposit with it. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic book-entry
changes in accounts of the Participants, 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,
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Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. 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 Direct Participant either directly
or indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Book-Entry Notes under the DTC system must be made by or
through Direct Participants, which will receive a credit on DTC's records for
the respective principal amount of the Book-Entry Notes represented by the
Global Note. The ownership interest of each actual purchaser of Book-Entry Notes
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Book-Entry Notes 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, except in
the event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, each Global Note will be deposited with
DTC and will be registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of the Global Notes 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 Book-Entry Notes; DTC's records reflect only the
identity of the Direct Participants to whose accounts the Book-Entry Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect 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.
Principal and interest payments on the Book-Entry Notes will be made by the
Company through the Trustee 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, the Trustee, or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Company through the
Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants. The
Trustee will not have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
DTC may discontinue providing its services as securities depository with
respect to the Book-Entry Notes at any time by giving reasonable notice to the
Company. Under such circumstances, in the event that a successor securities
depository is not appointed by the Company within 90 days, the Company will
issue Notes in certificated form in exchange for the Global Notes representing
Book-Entry Notes. In addition, the Company may at any time determine not to have
Book-Entry Notes represented by one or more Global Notes and, in such event,
will issue Notes in certificated form in exchange for the Global Note or Notes
representing such Book-Entry Notes. In any such instance, an owner of a
beneficial interest in any Global Note will be entitled to physical delivery of
Notes in certificated form which are equal in principal amount to such
beneficial interest and to have such Notes registered in its name. Such Notes so
issued will be issued in registered form only without coupons and in
denominations which are integral multiples of $1,000.
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The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
So long as DTC, or its nominee, is the registered owner of a Global Note,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the Book-Entry Notes represented by such Global Note for all purposes
under the Mortgage. Accordingly, each Beneficial Owner must rely on the
procedures of DTC and, if such person is not a Participant, on the procedures of
the Participant through which such person owns its interests, to exercise any
rights of a holder under the Mortgage or such Global Note. The Company
understands that neither DTC or its nominee will consent or vote with respect to
the Book-Entry Notes. In the event that the Company requests any action of
holders of Book-Entry Notes or an owner of a beneficial interest in a Global
Note desires to take any action that DTC or its nominee, as the holder of such
Global Note, is entitled to take, DTC would assign its and its nominees
consenting or voting rights to the Participants. The Company understands that
under existing industry practice, the Direct Participants would authorize
Beneficial Owners owning through such Direct Participants to take such action or
would otherwise act upon the instructions of Direct Beneficial Owners owning
through them.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by the Company
through UBS Securities LLC (the "Agent") who has agreed to use its reasonable
efforts to solicit offers to purchase the Notes. The Company reserves the right
to sell Notes directly to investors on its own behalf in those jurisdictions
where it is authorized to do so. The Company will pay the Agent a commission of
.101% of the principal amount of each Note sold through such Agent, depending
upon the maturity of such Note. The Company may also sell the Notes to the
Agent, as principal, at a discount from the principal amount thereof as
specified in the applicable Pricing Supplement, and such Agent may later resell
such Notes to investors and other purchasers at varying prices related to
prevailing market prices at the time or times of resale, as determined by such
Agent.
The Company reserves the right to withdraw, cancel, suspend or modify the
offering of the Notes at any time without notice and may reject any offer for
the purchase of Notes from the Company in whole or in part. The Agent shall have
the right, exercisable in its reasonable discretion, to reject any proposed
purchase of Notes in whole or in part.
The Notes are a new issue of securities with no established trading market.
The Agent has informed the Company that they intend to make a market in the
Notes, but are under no obligation to do so, and the Agent may cease making a
market in the Notes at any time. Therefore, no assurance can be given that a
trading market for the Notes will exist in the future. The Notes will not be
listed for trading on any securities exchange.
The Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended. The Company has agreed to indemnify the
Agent against certain liabilities, including liabilities under the Securities
Act.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges (unaudited) for the years 1991 to
1995 and the 12 months ended June 30, 1996 were 2.31, 3.08, 3.13, 3.14, 2.64,
and 3.46, respectively.
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PROSPECTUS
PORTLAND GENERAL ELECTRIC COMPANY
DEBT SECURITIES
------------------------
Portland General Electric Company, an Oregon corporation ("PGE" or the
"Company"), may offer and sell, from time to time or all at one time, in one or
more series, together or separately, in amounts, at prices and on terms to be
determined at the time of the offering, secured and unsecured debt securities
("Debt Securities") consisting of: (i) secured first mortgage bonds, including
medium term notes ("First Mortgage Bonds"), and (ii) unsecured debt securities,
which may be either Senior Unsecured Debt Securities or Junior Subordinated
Debentures ("Unsecured Debt Securities"). Senior Unsecured Debt Securities will
be unsecured and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company but will be junior to all first
mortgage bonds, including the First Mortgage Bonds. Junior Subordinated
Debentures will be unsecured and subordinate and junior in right of payment to
all Senior Indebtedness (as defined herein) of the Company.
The specific terms of the offering and sale of the Debt Securities,
including (a) the specific designation, the aggregate principal amount, the
maturity, the rate (which may be fixed, floating, or adjustable), the time of
payment of interest, any redemption or sinking fund provisions, the extent of
any subordination and any other rights and restrictions of each series of the
Debt Securities; and (b) the initial public offering price, listing on any
securities exchange, and the agents, dealers, or underwriters, if any, to be
utilized in connection with the sale of each series of the Debt Securities, will
be set forth in an accompanying Prospectus Supplement. If so specified in the
applicable Prospectus Supplement, the Debt Securities or a series thereof may be
issued in whole or in part in the form of one or more temporary or permanent
global securities. The Company reserves the sole right to accept and, together
with its agents from time to time, to reject in whole or in part any proposed
purchase of Debt Securities to be made directly or through agents.
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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. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Debt Securities may be sold directly by the Company or through agents,
underwriters, or dealers designated from time to time. If any agents of the
Company or any underwriters are involved in the sale of the Debt Securities or
any series thereof in respect of which this Prospectus is being delivered, the
names of such agents or underwriters and any applicable discounts or commissions
with respect to the Debt Securities or any such series thereof so sold will also
be set forth in the Prospectus Supplement.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 3, 1995
<PAGE> 8
AVAILABLE INFORMATION
The Company and its parent, Portland General Corporation ("Portland
General"), are subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith file
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information concerning the
Company and Portland General can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained upon
written request addressed to the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, reports,
proxy statements and other information concerning the Company and Portland
General may be inspected at the offices of both the New York Stock Exchange, 20
Broad Street, New York, New York 10005 and The Pacific Stock Exchange, 301 Pine
Street, San Francisco, California 94104, on which Portland General Common Stock
and certain of the Company's securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933 (the "Securities
Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Securities and Exchange Commission
by the Company, are incorporated in this Prospectus by reference as of their
respective dates of filing:
1. Annual Report on Form 10-K for the year ended December 31, 1994.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and
June 30, 1995.
3. Current Report on Form 8-K dated August 16, 1995.
All reports filed by the Company pursuant to Sections 13, 14, or 15(d) of
the Securities Exchange Act of 1934 subsequent to the date of this Prospectus
and prior to the termination of the offering or offerings hereunder shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of the filing of such reports. The documents enumerated above or
subsequently filed by the Company pursuant to Section 13 of the Securities
Exchange Act of 1934 prior to the filing with the Commission of the Company's
most recent annual report on Form 10-K shall not be incorporated by reference in
this Prospectus or be a part hereof from and after the filing of such annual
report on Form 10-K.
Any statement contained in a document 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 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 hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Requests for such copies should be
directed to Steven N. Elliott, Assistant Treasurer, Portland General Electric
Company, 121 S.W. Salmon Street, Portland, Oregon 97204 (telephone number:
503/464-8917).
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PORTLAND GENERAL ELECTRIC COMPANY
Portland General Electric Company, incorporated in Oregon in 1930, has
principal offices located at 121 S.W. Salmon Street, Portland, Oregon 97204
(telephone number: 503/464-8000). The Company is an electric utility engaged in
the generation, purchase, transmission, distribution and sale of electricity
primarily in the State of Oregon. The Company's service area is 3,170 square
miles, including 54 incorporated cities of which Portland and Salem are the
largest, within a State approved service area allocation of 4,070 square miles.
A portion of the City of Portland is serviced by another Oregon utility. The
Company estimates that the population of its service area at December 31, 1994
was approximately 1.35 million, constituting approximately 45% of the State's
population. At June 30, 1995, the Company served more than 640,000 customers.
The Company is a wholly owned subsidiary of Portland General Corporation
("Portland General"), an electric utility holding company exempt from the
application of the Public Utility Holding Company Act of 1935 except Section
9(a)(2) relating to the acquisition of securities of other public utility
companies.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used by PGE for refunding fixed and
variable rate securities, reducing short-term debt and other corporate purposes,
including its construction program.
RATIO OF EARNINGS TO FIXED CHARGES
In computing the ratio of earnings to combined fixed charges (i) earnings
have been based on income from continuing operations before income taxes and
fixed charges (exclusive of interest capitalized), and (ii) fixed charges
consist of interest and amortization of debt discount and expense (including
amounts capitalized) and the estimated interest portion of rents.
<TABLE>
<CAPTION>
TWELVE
MONTHS YEARS ENDED DECEMBER 31
ENDED --------------------------------
JUNE 30, 1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges (unaudited)....... 2.60 3.14 3.13 3.08 2.31 3.12
</TABLE>
DESCRIPTION OF DEBT SECURITIES
JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under an indenture, dated as of September 1, 1995 (the "Junior
Indenture"), between PGE and The Bank of New York, as Trustee (the "Junior
Trustee"), a form of which is filed as an exhibit to the Registration Statement
of which this Prospectus is a part. The following summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Junior Indenture, to which reference is
hereby made for a full description of such provisions, including the definition
of certain terms used and for other information regarding the Junior
Subordinated Debentures. Whenever particular provisions or defined terms in the
Junior Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Numerical references used herein are
references to the Junior Indenture unless otherwise noted. The particular terms
of the Junior Subordinated Debentures offered by any Prospectus Supplement and
the extent, if any, to which the general provisions described herein may apply
to such Junior Subordinated Debentures will be described in the Prospectus
Supplement relating to such Junior Subordinated Debentures.
GENERAL
The Junior Subordinated Debentures will be unsecured, subordinated
obligations of PGE. The Junior Indenture does not limit the aggregate principal
amount of Junior Subordinated Debentures which may be issued thereunder and
provides that the Junior Subordinated Debentures may be issued thereunder from
time
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<PAGE> 10
to time in one or more series pursuant to an indenture supplemental to the
Junior Indenture. (Section 2.01) The aggregate principal amount of Junior
Subordinated Debentures of any series will be set forth in the Prospectus
Supplement for such series.
Reference is made to the Prospectus Supplement which will accompany this
Prospectus for the following terms of each particular series of Junior
Subordinated Debentures being offered thereby: (i) title of such series of
Junior Subordinated Debentures; (ii) the aggregate principal amount of such
Junior Subordinated Debentures; (iii) the date or dates on which the principal
of such series of Junior Subordinated Debentures is payable; (iv) the rate or
rates, if any, at which such series of Junior Subordinated Debentures will bear
interest or the method of determination of such rate or rates, the date or dates
from which such interest shall accrue, the date or dates on which such interest
will be payable or the manner of determination of such interest payment dates
and the record dates for the interest payable on any such interest payment
dates; (v) the right, if any, to extend the interest payment periods and the
duration of such extension; (vi) the place where the principal of, premium, if
any, and interest on such series of Junior Subordinated Debentures will be
payable; (vii) the period or periods, if any, within which, the price or prices
at which and the terms and conditions upon which such series of Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
PGE; (viii) the obligation, if any, of PGE to redeem or purchase such series of
Junior Subordinated Debentures pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof, and the terms and conditions
upon which such series of Junior Subordinated Debentures shall be redeemed or
purchased, in whole or part, pursuant to such obligations; (ix) the
denominations in which such series of Junior Subordinated Debentures shall be
issuable; (x) any other terms of the Junior Subordinated Debentures of such
series; and (xi) whether the Junior Subordinated Debentures of such series are
issuable as a global security, and in such case, the identity of the depository.
(Section 2.01)
The Junior Indenture does not contain any provisions that afford holders of
Junior Subordinated Debentures protection in the event of a highly leveraged
transaction involving PGE.
SUBORDINATION
The Junior Indenture provides that the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of PGE as provided in the Junior Indenture. No payment of
principal of (including redemption and sinking fund payments), premium, if any,
or interest on, the Junior Subordinated Debentures may be made if any Senior
Indebtedness is not paid when due, any applicable grace period with respect to
such default has ended and such default has not been cured or waived, or if the
maturity of any Senior Indebtedness has been accelerated because of a default.
Upon any payment or distribution of assets of PGE to creditors upon any
dissolution, winding up, liquidation or reorganization, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
principal of, and premium, if any, and interest due or to become due on, all
Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debentures are entitled to receive or retain any payment. Subject
to the prior payment of all Senior Indebtedness, the rights of the holders of
the Junior Subordinated Debentures will be subrogated, in certain instances, to
the rights of the holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.05)
The term "Senior Indebtedness" shall mean the principal of, and premium, if
any, and interest on and any other payment or obligations due pursuant to any of
the following, whether outstanding at the date of execution of the Junior
Indenture or thereafter incurred, created or assumed: (a) all indebtedness of
PGE for money borrowed, (b) all indebtedness evidenced by notes, debentures,
bonds, securities, or other similar instruments issued by PGE, (c) all capital
lease obligations of PGE, (d) all obligations of PGE issued or assumed as the
deferred purchase price of property, all conditional sales obligations of PGE
and all obligations of PGE under any title retention agreement (excluding trade
accounts payable arising in the ordinary course of business), (e) obligations of
PGE for the reimbursement of any obligor on any letter of credit, banker's
acceptance, security purchase facility, surety bond or similar credit
transaction entered into in the ordinary course of business of PGE, (f) all
indebtedness and obligations of others of the kinds described in the clauses (a)
through (e), assumed by or guaranteed in, any manner by PGE in effect guaranteed
by PGE through an
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<PAGE> 11
agreement to purchase, contingent or otherwise, and (g) all renewals, extensions
or refundings of indebtedness of the kinds described in clauses (a) through (f)
unless, in the case of any particular indebtedness, obligation, renewal,
extension or refunding, the instrument creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
obligation, renewal, extension or refunding is not superior in right of payment
to or is pari passu with the Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions set forth in Article Fourteen of the Junior Indenture irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
The Junior Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued. As of June 30, 1995, Senior Indebtedness of
PGE aggregated approximately $2,000,000,000.
As the Junior Subordinated Debentures will be issued by PGE, the Junior
Subordinated Debentures effectively will be subordinate to all obligations of
PGE's subsidiaries, and the rights of PGE's creditors, including holders of the
Junior Subordinated Debentures, to participate in the assets of such
subsidiaries upon liquidation or reorganization will be junior to the rights of
the holders of all preferred stock, indebtedness and other liabilities of such
subsidiaries, which may include trade payables, obligations to banks under
credit facilities, guarantees, pledges, support arrangements, bonds, capital
leases, notes and other obligations. Nothing in the Junior Indenture limits the
right of PGE to create subsidiaries or limits the right of any PGE subsidiary to
incur indebtedness.
CERTAIN COVENANTS
If there shall have occurred any event that would, with the giving of
notice or the passage of time, or both, constitute an Event of Default under the
Junior Indenture, as described under "Events of Default" below, or if PGE
exercises its option to extend the interest payment period described in clause
(v) under "General" above, PGE will not, until all defaulted interest on the
Junior Subordinated Debentures and all interest accrued on the Junior
Subordinated Debentures during any such extended interest payment period and all
principal and premium, if any, then due and payable on the Junior Subordinated
Debentures shall have been paid in full, (i) declare, set aside or pay any
dividend or distribution on any capital stock of PGE, including its Common
Stock, except for dividends or distribution in shares of its capital stock or in
rights to acquire shares of its capital stock, or (ii) repurchase, redeem or
otherwise acquire, or make any sinking fund payment for the purchase or
redemption of, any shares of its capital stock (except by conversion into or
exchange for shares of its capital stock and except for a redemption, purchase
or other acquisition of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of PGE or any of its subsidiaries);
provided, however, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase or
redemption of such preferred stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision. (Section
4.06)
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Junior Subordinated Debentures of each series will be issued in registered
form and will be either certificated or represented by one or more global
securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Debenture Registrar or at the office of any transfer agent designated by PGE
for such purpose with respect to any series of Junior Subordinated Debentures
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in the
Junior Indenture. Such transfer or exchange will be effected upon the Debenture
Registrar or such transfer agent, as the case may be, being satisfied with the
document of title and identity of the person making the request. PGE has
appointed the Junior Trustee as Debenture Registrar with respect to the Junior
Subordinated Debentures. (Section 2.05) If a Prospectus Supplement refers to any
transfer agents (in addition to the Debenture Registrar) initially designated by
PGE with respect to any series of Junior Subordinated Debentures, PGE may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that PGE will be
required to maintain a transfer agent in each place where Junior Subordinated
Debentures of
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<PAGE> 12
such series may be presented for payment. (Section 4.02) PGE may at any time
designate additional transfer agents with respect to any series of Junior
Subordinated Debentures.
In the event of any redemption in part, PGE shall not be required to (i)
issue, register the transfer of or exchange any Junior Subordinated Debenture
during a period beginning at the opening of business 15 days before any
selection for redemption of Junior Subordinated Debentures of like tenor and of
the series of which such Junior Subordinated Debenture is a part, and ending at
the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal and premium (if any) on any Junior Subordinated Debenture will be
made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in an applicable Prospectus Supplement,
principal of, premium, if any, and interest on Junior Subordinated Debentures
will be payable, subject to any applicable laws and regulations, at the office
of such Paying Agent or Paying Agents as PGE may designate from time to time,
except that at the option of PGE payment of any interest may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the Debenture Register with respect to such Junior Subordinated
Debentures. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of interest on a Junior Subordinated Debenture on any Interest Payment
Date will be made to the person in whose name such Junior Subordinated Debenture
(or Predecessor Debenture) is registered at the close of business on the Regular
Record Date for such interest payment. (Section 2.03)
The Junior Trustee will act as Paying Agent with respect to the Junior
Subordinated Debentures. PGE may at any time designate additional Paying Agents
or rescind the designation of any Paying Agents or approve a change in the
office through which any Paying Agent acts, except that PGE will be required to
maintain a Paying Agent in each place where Junior Subordinated Debentures of
each series may be presented for payment. (Section 4.02)
All moneys paid by PGE to a Paying Agent for the payment of the principal
of, premium, if any, or interest on any Junior Subordinated Debenture of any
series which remain unclaimed at the end of two years after such principal,
premium, if any, or interest shall have become due and payable will be repaid to
PGE and the holder of such Junior Subordinated Debenture will thereafter look
only to PGE for payment thereof. (Section 11.06)
GLOBAL DEBENTURES
If any Junior Subordinated Debentures of a series are represented by one or
more global securities, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global security may exchange such interests for Junior Subordinated Debentures
of such series and of like tenor and principal amount in any authorized form and
denomination. Principal of, premium, if any, and interest on such global
security will be payable in the manner described in the applicable Prospectus
Supplement. (Section 2.11)
The specific terms of the depository arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by a
global security will be described in the applicable Prospectus Supplement.
AGREED TAX TREATMENT
The Junior Indenture provides that each holder of a Junior Subordinated
Debenture, each person that acquires a beneficial ownership interest in a Junior
Subordinated Debenture and PGE agree that for United
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<PAGE> 13
States federal, state and local tax purposes it is intended that such Junior
Subordinated Debenture constitutes indebtedness. (Section 13.12)
MODIFICATION OF THE JUNIOR INDENTURE
The Junior Indenture contains provisions permitting PGE and the Junior
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of each series which are
affected by the modification, to modify the Junior Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; provided, that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture then
outstanding and affected thereby, (i) extend the fixed maturity of any Junior
Subordinated Debentures of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of any interest thereon, or
reduce any premium payable upon the redemption thereof, or (ii) reduce the
percentage of Junior Subordinated Debentures, the holders of which are required
to consent to any such supplemental indenture. (Section 9.02)
The Junior Indenture contains provisions permitting PGE and the Junior
Trustee to execute, without the consent of any holder of Junior Subordinated
Debentures, any supplemental indenture for certain other usual purposes
including creating any new series of Junior Subordinated Debentures. (Sections
2.01, 9.01, and 10.01)
EVENTS OF DEFAULT
The Junior Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an "Event of
Default" with respect to each series of Junior Subordinated Debentures: (i)
failure for 10 days to pay interest on the Junior Subordinated Debentures of
that series when due; (ii) failure to pay principal of or premium, if any, on
the Junior Subordinated Debentures of that series when due whether at maturity,
upon redemption or otherwise, or to make any sinking fund payment with respect
to that series; (iii) failure to observe or perform any other covenant (other
than those specifically relating to another series) contained in the Junior
Indenture for 90 days after written notice; or (iv) certain events of
bankruptcy, insolvency or reorganization of PGE. (Section 6.01)
The holders of a majority in aggregate outstanding principal amount of any
series of Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Junior Trustee for that series. (Section 6.06) The Junior Trustee or the holders
of not less than 25% in aggregate outstanding principal amount of any particular
series of Junior Subordinated Debentures may declare the principal due and
payable immediately upon an Event of Default with respect to such series, but
the holders of a majority in aggregate outstanding principal amount of such
series may annul such declaration and waive such Event of Default if it has been
cured and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Junior Trustee. (Section
6.01)
The holders of a majority in aggregate outstanding principal amount of all
series of Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all Junior Subordinated Debentures of such series, waive any past
default, except a default in the payment of principal, premium, if any, or
interest. (Section 6.06) PGE is required to file annually with the Junior
Trustee a certificate as to whether or not PGE is in compliance with all the
conditions and covenants under the Junior Indenture. (Section 5.03)
CONSOLIDATION, MERGER AND SALE
The Junior Indenture does not contain any covenant which restricts PGE's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions. (Section 10.01)
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<PAGE> 14
DEFEASANCE AND DISCHARGE
Under the terms of the Junior Indenture, PGE will be discharged from any
and all obligations in respect of the Junior Subordinated Debentures of any
series (except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if PGE deposits with the Junior Trustee, in trust, moneys or
Government Obligations, in an amount sufficient to pay all the principal of, and
interest on, the Junior Subordinated Debentures of such series on the dates such
payments are due in accordance with the terms of such Junior Subordinated
Debentures and, if, among other things, such Junior Subordinated Debentures are
neither due and payable nor to be called for redemption within one year, PGE
delivers to the Trustee an Opinion of Counsel to the effect that the holders of
Junior Subordinated Debentures of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and discharge
and will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit and
discharge had not occurred. In addition, if PGE delivers to the Trustee an
Opinion of Counsel (in lieu of the Opinion of Counsel referred to above) to the
effect that PGE has received from, or there has been published by, the United
States Internal Revenue Service a ruling, or there has been a change in tax law,
in either case to the effect that holders of the Junior Subordinated Debentures
will not recognize gain or loss for federal income tax purposes as a result of
such deposit, defeasance, and discharge and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge were not to occur, and
such deposit will not result in PGE, the Junior Trustee or the trust resulting
from the defeasance being deemed an "investment company" under the Investment
Company Act of 1940, as amended, then, PGE will be deemed to have paid and
discharged the entire indebtedness and holders of Junior Subordinated Debentures
of such series would be able to look only to the trust fund for payment of
principal, premium, if any, and interest on the Junior Subordinated Debentures
of such series. (Sections 11.01, 11.02, and 11.03)
GOVERNING LAW
The Junior Indenture and the Junior Subordinated Debentures will be
governed by and construed in accordance with, the laws of the State of New York.
(Section 13.04)
INFORMATION CONCERNING THE TRUSTEE
The Junior Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Junior Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. (Section 7.01) Subject to such provision,
the Junior Trustee is under no obligation to exercise any of the powers vested
in it by the Junior Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
(Section 7.02) The Junior Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Junior Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01)
MISCELLANEOUS
PGE will have the right at all times to assign any of its rights or
obligations under the Junior Indenture to Portland General or a direct or
indirect wholly owned subsidiary of Portland General or PGE; provided, that, in
the event of any such assignment, PGE will remain liable for all such
obligations. Subject to the foregoing, the Junior Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns. The Junior Indenture provides that it may not otherwise be assigned
by the parties thereto. (Section 13.11)
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<PAGE> 15
FIRST MORTGAGE BONDS
First Mortgage Bonds are to be issued under the Indenture of Mortgage and
Deed of Trust, dated July 1, 1945 (the "Original Indenture"), made by PGE to The
Marine Midland Trust Company of New York (now Marine Midland Bank), as Trustee
("Trustee"), as supplemented by forty-five supplemental indentures (the
"Supplemental Indentures") heretofore executed by PGE and as to be supplemented
by one or more additional supplemental indentures to be dated the first day of
the month or months of issuance of each series of the First Mortgage Bonds, all
of which are collectively referred to as the "Mortgage".
The statements herein concerning the First Mortgage Bonds and the Mortgage
are an outline and do not purport to be complete. They make use of defined terms
and are qualified in their entirety by reference to the Mortgage, which is filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part. References herein are to sections and articles of the Original Indenture
unless otherwise indicated. References to the New Supplementals are to the
drafts of the form of New Supplemental Indenture and the form of New MTN
Supplemental Indenture, respectively (collectively the "New Supplementals"),
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part.
A Prospectus Supplement will set forth any variation in the terms and
provisions of the First Mortgage Bonds from those described in this Prospectus.
FORM, DENOMINATIONS AND EXCHANGEABILITY
The First Mortgage Bonds are issuable in fully registered form in
denominations of $1,000, or such other amounts as may be authorized by PGE, or
any amount in excess thereof that is a multiple of $1,000. (New Supplementals
Section 1.01)
The First Mortgage Bonds will be transferable or exchangeable for First
Mortgage Bonds of other authorized denominations without any service charge at
the office of the Trustee in New York, N.Y. (Sections 2.06 and 2.10; New
Supplementals Section 1.01)
INTEREST AND PAYMENT
Reference is made to the Prospectus Supplement for the interest rate or
rates (which may be either fixed or variable) and/or the method of determination
of such rate or rates, of the First Mortgage Bonds, the date or dates on which
such interest is payable and the office or agency in the Borough of Manhattan,
City and State of New York at which interest will be payable.
SECURITY AND PRIORITY; BONDABLE PUBLIC UTILITY PROPERTY
In the opinion of PGE's counsel, the First Mortgage Bonds are to be
secured, equally with all other bonds heretofore or hereafter issued under the
Mortgage, by a direct first lien on PGE's interests in substantially all of its
property (except cash, securities, contracts and accounts receivable, motor
vehicles, materials and supplies, fuel, certain minerals and mineral rights and
certain other assets) now owned or hereafter acquired by PGE; subject, however,
to certain permitted encumbrances and to various exceptions, reservations,
reversions, easements and minor irregularities and deficiencies in title, which,
in the opinion of such counsel, will not interfere with their proper operation
and development. Until such time as the amendment discussed below becomes
effective, the lien of the Mortgage does not extend to properties located
outside of Oregon or contiguous states (principally PGE's interest in the
Colstrip units located in Montana).
The Mortgage permits the acquisition of property subject to prior liens.
However, no property subject to prior liens (other than liens securing the
unpaid purchase price of equipment or machinery) may be acquired (a) if at the
date of acquisition thereof the principal amount of indebtedness secured by such
prior liens, together with all other prior lien indebtedness of PGE, exceeds 10%
of the aggregate principal amount of bonds outstanding under the Mortgage, or
(b) if at the date of acquisition thereof the principal amount of indebtedness
secured by such prior liens exceeds 60% of the cost of such property to PGE, or
(c) in certain cases of property used by another in a business similar to that
of PGE, unless the net earnings of such property meet certain tests. (Section
8.11)
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<PAGE> 16
The term "bondable public utility property", as presently defined in the
Mortgage, means specified types of tangible property, including property then in
the process of construction, now owned or hereafter acquired by PGE and
subjected to the lien of the Original Indenture as the same has been or may be
in the future supplemented, modified or amended, which is located in the State
of Oregon or in any state contiguous thereto. (Section 1.10A) When the holders
of 75% in principal amount of bonds of all series then outstanding, including
the holders of not less than 60% in principal amount of the bonds then
outstanding of each series which is affected by such amendment, shall have
consented thereto, the term "bondable public utility property" will be amended
to mean the same types of tangible property now owned or hereafter acquired by
PGE and subjected to the lien of the Original Indenture as the same has been or
may be in the future supplemented, modified or amended, which is located in the
States of Oregon, Washington, California, Arizona, New Mexico, Idaho, Montana,
Wyoming, Utah, Nevada and Alaska. Each holder of a First Mortgage Bond, by his
acceptance of such First Mortgage Bond, shall thereby consent to such amendment;
no further vote or consent of holders of the First Mortgage Bonds shall be
required to permit such amendment to become effective; and in determining
whether the holders of not less than 75% of principal amount of bonds
outstanding at the time such amendment becomes effective have consented thereto,
the holders of all First Mortgage Bonds then outstanding shall be deemed to have
so consented. (New Supplementals Section 1.08 and 1.07) Similar provisions are
contained in all recent Supplemental Indentures under which new series of bonds
have been issued. Similar provisions amending the definition of "bondable public
utility property" to include all of the states named above (other than Alaska)
are included in certain prior Supplemental Indentures, as well as in the New
Supplementals.
PGE has covenanted, among other things, to not issue bonds under the
Mortgage in any manner other than in accordance with the Mortgage, to keep the
Mortgage a first priority lien on the Trust Estate and, except as permitted by
the Mortgage, to not suffer any act or thing whereby the Trust Estate might or
could be impaired. (Article EIGHT) Neither the Original Indenture nor the
Supplemental Indentures contain any provisions that afford holders of bonds
special protection in the event of a highly leveraged transaction by PGE,
however the bonds would continue to be entitled to the benefit of a first
priority lien on the Trust Estate as described above. Any special provisions
applicable to the First Mortgage Bonds will be set forth in the New
Supplementals and described in a Prospectus Supplement with respect to the First
Mortgage Bonds.
REDEMPTION AND PURCHASE OF BONDS
Reference is made to the Prospectus Supplement for the terms and conditions
under which the First Mortgage Bonds, or any series of the First Mortgage Bonds
if there shall be more than one series, may be redeemed or purchased at the
option of PGE. The First Mortgage Bonds will be redeemable at any time at 100%
of the principal amount thereof, together with interest accrued to the date of
redemption, by use of proceeds from the sale or disposition substantially as an
entirety of PGE's electric properties at Portland, Oregon. (Section 7.01)
Cash deposited under any provision of the Mortgage (with certain
exceptions) may be applied to the purchase of the First Mortgage Bonds or any
series of the First Mortgage Bonds if there shall be more than one series.
(Section 7.05)
SINKING FUND PROVISIONS
If a Prospectus Supplement with respect to all of the First Mortgage Bonds
offered as a single series, or to any separate series of the First Mortgage
Bonds if there shall be more than one series, states that there will be a
sinking fund for the benefit of such series, then so long as any First Mortgage
Bonds of such series shall be outstanding, PGE will be required to deposit with
the Trustee in each year (except the year of maturity) commencing with such year
as shall be set forth in such Prospectus Supplement, cash sufficient to redeem
on the first day of the month of issuance of the first of the First Mortgage
Bonds of such series, at the Special Redemption Price, First Mortgage Bonds
equal to the percentage set forth in such Prospectus Supplement of the aggregate
principal amount of First Mortgage Bonds of such series theretofore issued,
after deducting from such aggregate principal amount (but only if such
deductions would aggregate $500,000 or more) the sum of (1) the aggregate
principal amount of First Mortgage Bonds of such series theretofore redeemed out
of the
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proceeds of property released from the lien of the Mortgage and (2) First
Mortgage Bonds of such series theretofore redeemed and retired and made the
basis for the withdrawal of such proceeds or certified in lieu of the deposit of
cash upon the release or taking of property. If so set forth in such Prospectus
Supplement, credit against such cash required to be deposited may be taken at
PGE's election in an amount equal to the principal amount of First Mortgage
Bonds of such series (i) delivered to the Trustee, (ii) at any time theretofore
redeemed at the option of PGE at the Regular Redemption Price, and/or (iii)
redeemed at the Special Redemption Price in anticipation of any sinking fund
payment at any time during the twelve months preceding the payment date
therefor. If so set forth in such Prospectus Supplement, PGE may also satisfy
all or any part of any sinking fund payment by certifying to the Trustee
available additions in an amount equal to 166 2/3% of the portion of the sinking
fund payment being so satisfied. If so set forth in such Prospectus Supplement,
cash so deposited to satisfy all or any part of any sinking fund payment shall
be used by the Trustee for the redemption of First Mortgage Bonds of such series
and PGE is required to pay all accrued interest and expenses with respect to any
First Mortgage Bonds of such series so redeemed. If sinking fund payments for
the First Mortgage Bonds of any series may be satisfied in whole or in part by
delivering to the Trustee First Mortgage Bonds of such series acquired by PGE
through purchase in the open market or otherwise, by redemption and/or by
certifying available additions, there will be no assurance that any of the First
Mortgage Bonds of any series will ever be called for redemption through
operation of the sinking fund therefor. In the event that less than all of the
First Mortgage Bonds of any series then outstanding were to be redeemed, the
selection would be made by the Trustee by lot in any manner deemed by the
Trustee to be proper. (Section 9.03)
REPLACEMENT FUND
PGE is required, on or before May 1 in each year, to pay to the Trustee an
amount in cash and/or deliver bonds of any series in principal amount equal to
the amount by which the minimum provision for depreciation upon bondable public
utility property (see below) for the preceding calendar year exceeds property
additions (as specified below) and, in the event of any deficiency in property
additions, the sum of certain other credits described below, which are optional.
Credit must be taken in an amount equal to the aggregate amount and/or cost of
property additions acquired or constructed by PGE from March 31, 1945 to the end
of the preceding calendar year, less (1) property additions theretofore made the
basis for action or credit under the Mortgage, (2) available additions
theretofore made the basis for action or credit under the Mortgage, and (3)
property additions theretofore credited against any previous replacement fund
requirement. PGE may at its election credit against the amount, if any, required
to be paid (i) any available bond retirements, (ii) certain expenditures for the
acquisition of or for improvements, additions, renewals or replacements to
bondable public utility property subject to a prior lien, and (iii) certain
retirements of prior lien indebtedness. To the extent that such credits at any
time exceed the replacement fund requirement, PGE may withdraw cash or bonds
held by the Trustee in the replacement fund or, under certain circumstances,
reinstate available bond retirements previously taken as a credit against any
replacement fund requirement. Any cash so deposited with the Trustee for the
replacement fund may, at the option of PGE, be applied to the redemption or
purchase of bonds. Redemptions of First Mortgage Bonds are at the then
applicable Regular Redemption Prices. (Section 4.04; New Supplementals Sections
1.04 and 1.03)
The amount of the mandatory credit for property additions has always
exceeded the replacement fund requirement and therefore PGE has not been
required (or permitted) to pay cash or deliver bonds to the Trustee. PGE expects
this to continue in the foreseeable future.
MINIMUM PROVISION FOR DEPRECIATION
The "minimum provision for depreciation" as applied to bondable public
utility property, as presently defined in the Mortgage, is, for any period
(other than periods of less than a calendar year), 15% of the gross operating
revenues derived from such property during such period, after deducting the cost
of purchased power and lease or rental payments for generating or transmission
facilities, less all amounts expended for maintenance of such property during
such period. The "minimum provision for depreciation" as applied to bondable
public utility property not subject to a prior lien is similarly determined on
the basis of gross
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<PAGE> 18
operating revenues from, and maintenance expenditures upon, bondable public
utility property not at the time subject to a prior lien. (Section 1.10G)
When the holders of 75% in principal amount of bonds of all series then
outstanding, including the holders of not less than 60% in principal amount of
the bonds then outstanding of each series which is affected by such amendments,
shall have consented thereto:
(1) The definitions of minimum provision for depreciation will be
amended so that the minimum provision for depreciation for the period from
March 31, 1945 through December 31, 1966 as applied to bondable public
utility property, whether or not subject to lien, shall mean $35,023,487.50
(which is the amount of such minimum provision for such period under the
existing definitions of minimum provision for depreciation); the minimum
provision for depreciation as applied to bondable public utility property
for any calendar year subsequent to December 31, 1966, shall mean the
greater of (i) an amount equal to 2% of such property, as shown by PGE's
books as of January 1 of such year, with respect to which PGE was then
required to make appropriations to a reserve or reserves for depreciation
or obsolescence, or (ii) the amount actually appropriated in respect of
such property to such reserve or reserves for such calendar year, in either
case less an amount equal to the aggregate of (a) the amount of any
property additions which during such calendar year were made the basis for
a sinking fund credit, pursuant to the provisions of a sinking fund for
bonds of any series, and (b) 166 2/3% of the principal amount of bonds of
any series which were credited against any sinking fund payment due during
such calendar year for bonds of any series, or which were redeemed in
anticipation of, or out of moneys paid to the Trustee on account of any
sinking fund payment due during such calendar year for bonds of any series;
and the aggregate amount of the minimum provision for depreciation as
applied to bondable public utility property from March 31, 1945 to any date
shall mean $35,023,487.50 plus the sum of the minimum provision for
depreciation for each calendar year or fraction thereof between December
31, 1966 and such date, calculated as set forth immediately above.
(2) The amended definitions of minimum provision for depreciation as
applied to bondable public utility property set forth in (1) above will be
further amended so that (A) the property additions and bonds referred to in
(a) and (b) of (1) above will be limited to property additions and bonds
which, as a result of having been made the basis of a sinking fund credit
for bonds of any series or having been redeemed in anticipation of or out
of moneys paid to the Trustee on account of a sinking fund payment for
bonds of any series, become disqualified from being made the basis of the
authentication and delivery of bonds or any other further action or credit
under the Mortgage, either without time limit or only for as long as any
bonds of such series are outstanding, and (B) the amended definition of the
aggregate amount of the minimum provision for depreciation as applied to
bondable public utility property from March 31, 1945 to any date set forth
in (1) above will be further amended by adding thereto (1) the amount of
any property additions referred to in (a) of (1) above, as so amended,
which between December 31, 1966 and such date were made the basis for a
sinking fund credit pursuant to the provisions of a sinking fund for bonds
of any series, and thereafter and on or prior to such date become
"available additions" as a result of the fact that all bonds of such series
ceased to be outstanding and (ii) 166 2/3% of the principal amount of bonds
referred to in (b) of (1) above, as so amended, which between December 31,
1966 and such date were credited against any sinking fund payment, or were
redeemed in anticipation of, or out of moneys paid to the Trustee on
account of, any sinking fund payment, due between December 31, 1966 and
such date for bonds of any series, and thereafter and on or prior to such
date became "available bond retirements" as a result of the fact that all
bonds of such series ceased to be outstanding.
The "minimum provision for depreciation" as applied to bondable public utility
property not subject to a prior lien for any period subsequent to December 31,
1966 will be calculated on similar bases except that the property referred to in
clauses (i) and (ii) of (1) above will be bondable public utility property not
subject to prior lien. If the revised definitions set forth in (1) above or in
both (1) and (2) above should become effective it is expected that the minimum
provisions for depreciation for periods subsequent to December 31,1966 will be
reduced from such minimum provisions as computed in accordance with the existing
definitions. Each holder of a First Mortgage Bond, by his acceptance of such
First Mortgage Bond, shall thereby consent to both such amendments; no further
vote or consent of holders of the First Mortgage Bonds
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<PAGE> 19
shall be required to permit either such amendment to become effective; and in
determining whether the holders of not less than 75% in principal amount of
bonds outstanding at the time either such amendment becomes effective have
consented thereto, the holder of all First Mortgage Bonds then outstanding shall
be deemed to have so consented. (New Supplementals Sections 1.08 and 1.07)
Similar provisions amending the definitions of "minimum provision for
depreciation" set forth in (1) above have been included in all prior
Supplemental Indentures under which new series of bonds have been issued,
commencing with the Sixteenth Supplemental Indenture. Similar provisions
amending the definitions of "minimum provision for depreciation" set forth in
(2) have been included in all prior Supplemental Indentures under which new
series of bonds have been issued, commencing with the Twenty-fifth Supplemental
Indenture.
The amendment set forth in (1) above also contains provisions to the effect
that all bonds of any series and all property additions made the basis of a
credit upon any sinking fund payment for bonds of any series or redeemed by
operation of the sinking fund for bonds of any series (whether on any sinking
fund payment date or in anticipation of any sinking fund payment) shall not be
made the basis of the authentication and delivery of bonds or of any other
further action or credit under the Mortgage. The amendment set forth in (2)
above will eliminate such provisions. Certain presently outstanding series of
bonds are entitled to the benefits of similar provisions, presently effective,
prohibiting the use of bonds or property additions made the basis of a credit
upon or redeemed by operation of the sinking fund, if any, for bonds of that
series or certain previously issued series. None of such provisions limit the
use of such bonds or property additions in calculating the amended definitions
of minimum provision for depreciation referred to in either (1) or (2) above.
When the holders of 75% in principal amount of bonds of all series than
outstanding, including holders of not less than 60% of the bonds then
outstanding of each series which is affected by such amendment, shall have
consented thereto, the foregoing provisions prohibiting the use of bonds or
property additions so credited against (or redeemed out of the proceeds of) any
sinking fund payment for bonds of any series, or for bonds of certain series, as
the case may be, will remain effective only so long as any such bonds of such
series are outstanding. When all bonds of a series cease to be outstanding,
bonds and/or property additions so credited (or redeemed) by operation of the
sinking fund for bonds of such series equal to 1% per annum of the principal
amount of bonds of such series theretofore issued (after making certain
deductions) will remain unavailable for further action or credit under the
Mortgage, but the amount of such bonds and property additions in excess of such
1% per annum will become "available additions" or "available bond retirements",
as the case may be. (New Supplementals Sections 1.08 and 1.07) Similar
provisions with respect to the use of bonds and property additions so credited
against (or redeemed out of the proceeds of) sinking fund payments and the
amount of such bonds and property additions in excess of such 1% per annum
becoming "available additions" or "available bond retirements", as the case may
be, have been included in all prior Supplemental Indentures under which new
series of bonds have been issued, commencing with the Twenty-fifth Supplemental
Indenture.
ISSUANCE OF ADDITIONAL BONDS
The principal amount of bonds which may be issued under the Mortgage is
unlimited. Additional bonds may from time to time be issued on the basis of (1)
60% of available additions, (2) the deposit of cash or (3) available bond
retirements. With certain exceptions in the case of (3) above, the issuance of
bonds is subject to net earnings available for interest for 12 consecutive
months within the preceding 15 months being at least twice the annual interest
requirements on all bonds to be outstanding and prior lien indebtedness.
(Article FIVE) Cash deposited with the Trustee pursuant to (2) above may be (i)
withdrawn in an amount equal to 60% of available additions, (ii) withdrawn in an
amount equal to available bond retirements or (iii) applied to the purchase or
redemption of bonds. (Article SEVEN) At June 30, 1995, PGE had available
additions and available bond retirements sufficient to permit the issuance of
approximately $230,000,000 and $100,000,000, respectively, in principal amount
of additional bonds, including the First Mortgage Bonds. As of June 30, 1995,
net earnings available for interest would permit the issuance of up to
$750,000,000 principal amount of additional bonds, including the First Mortgage
Bonds. This amount would increase to the extent proceeds of the issuance of
bonds are used to retire presently outstanding first mortgage bonds.
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<PAGE> 20
Available additions are determined, at any time, by deducting from the
aggregate amount of property additions since March 31, 1945 (1) the greater of
the aggregate amount of retirements since March 31, 1945 or the aggregate amount
of the minimum provision for depreciation upon bondable public utility property
not subject to a prior lien since March 31, 1945, and (2) the aggregate of
available additions theretofore made the basis for action or credit under the
Mortgage. (Sections 1.10.I, 3.01 and 3.03.A) Property additions taken as a
credit against the replacement fund requirement are not deemed to be "made the
basis for action or credit". (Section 1.10.H)
DIVIDEND RESTRICTIONS
So long as any of the First Mortgage Bonds, or bonds of any other series
heretofore authenticated under the Mortgage, are outstanding, dividends (other
than dividends in capital stock of PGE) may not be declared or paid or other
distributions made on Common Stock of PGE, nor may any shares of capital stock
of PGE be purchased (other than in exchange for or from the proceeds of other
shares of capital stock of PGE), if the aggregate amount so distributed or
expended after December 31, 1944 would exceed the aggregate amount of PGE's net
income, as adjusted, available for dividends on its Common Stock accumulated
after December 31, 1944. (Section 4.06; New Supplementals Sections 1.04 and
1.03) At June 30, 1995, $531,000,000 of accumulated net income was available for
payment of dividends under the foregoing provision.
RELEASE AND SUBSTITUTION OF PROPERTY
Property subject to the lien of the Mortgage may (subject to certain
exceptions and limitations) be released only upon the substitution of cash,
purchase money obligations or certain other property or upon the basis of
available additions or available bond retirements. (Article SIX)
MODIFICATION OF THE MORTGAGE
The rights of the bondholders may be modified with the consent of the
holders of 75% of the bonds, including the consent of the holders of 60% of the
bonds of each series the rights of the holders of which are affected by such
modification. In general, no modification of the terms of principal and
interest, and no modification affecting the lien of the Mortgage or reducing the
percentage required for modification, is effective against any bondholder
without his consent. (Section 17.02) The Mortgage may also be modified in
various other respects not inconsistent with the Mortgage and which do not
adversely affect the interests of the holders of bonds. (Section 17.01)
DEFAULTS AND NOTICE THEREOF
Defaults are defined as being: default in payment of principal; default for
60 days in payment of interest or of any sinking fund or replacement or
improvement fund obligation; certain events of bankruptcy, insolvency or
reorganization; or default continuing for 60 days after notice in performance or
observance of other covenants, agreements or conditions. (Section 11.01) The
Trustee may withhold notice of defaults (except in payment of principal,
interest or any sinking or purchase fund installment) if it in good faith
determines it to be in the interest of the bondholders. (Section 14.09) The
holders of 25% of the bonds may declare the principal and accrued interest due
on default, but the holders of a majority may annul such declaration if such
default has been cured. (Section 11.01) No holder of bonds may enforce the lien
of the Mortgage without giving the Trustee written notice of a default and
unless the holders of 25% of the bonds have requested the Trustee to act and
offered the Trustee indemnity against expenses and the Trustee has failed to act
within 60 days. (Section 11.21) The holders of a majority of the bonds may
direct the time, method and place of conducting any proceedings for any remedy
available to the Trustee or exercising any trust or power conferred upon the
Trustee, but the Trustee is not required to incur personal liability if there is
reasonable ground for believing that it will not be sufficiently indemnified for
any expenditures in connection therewith. (Section 11.20)
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EVIDENCE TO BE FURNISHED TO THE TRUSTEE
Compliance with Mortgage provisions is evidenced by written statements of
officers of PGE or persons selected and paid by PGE. In certain cases, opinions
of counsel and certificates of an engineer, accountant, appraiser or other
expert (who in some instances must be independent), must be furnished. Various
certificates and other papers are required to be filed annually and in certain
events, including an annual certificate with respect to compliance with the
terms of the Mortgage and absence of defaults.
SENIOR UNSECURED DEBT SECURITIES
The Senior Unsecured Debt Securities may be issued from time to time in one
or more series under an indenture to be dated as of the first day of the month
of its execution ("Senior Indenture"), between PGE and a trustee to be selected
by PGE (the "Senior Trustee"). A copy of the Senior Indenture will be filed as
an exhibit to the Registration Statement of which this Prospectus is a part on
or before execution thereof by PGE and the Senior Trustee. The following
description of the general provisions of the Senior Indenture is not complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the Senior Indenture in the form in which it is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
Reference is hereby made to the Senior Indenture as so filed for a full
description of such provisions, including the definitions of certain terms used
and for other information regarding the Senior Unsecured Debt Securities. The
particular terms of the Senior Unsecured Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which the general provisions
described herein may apply to such Senior Unsecured Debt Securities will be
described in the Prospectus Supplement relating to such Senior Unsecured Debt
Securities.
GENERAL
The aggregate principal amount of the Senior Unsecured Debt Securities
issuable under the Senior Indenture will be unlimited. The Senior Unsecured Debt
Securities may be issued from time to time in one or more series pursuant to an
indenture supplemental to the Senior Indenture. The specific terms for each
particular series of the Senior Unsecured Debt Securities, including (i) the
title of such series; (ii) the aggregate principal amount of such series; (iii)
the date or dates on which the principal of such series is payable; (iv) the
rate or rates, if any, at which such series will bear interest or the method of
determination of such rate or rates, the date or dates from which such interest
will accrue, the date or dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the interest payable on such interest payment dates; (v) the place where the
principal of, premium, if any, and interest on such series will be payable; (vi)
the period or periods, if any, within which, the price or prices at which and
the terms and conditions upon which such series may be redeemed, in whole or in
part, at the option of PGE; (vii) the terms and conditions, if any, on which
such series may be discharged prior to redemption or maturity; (viii) the
obligation, if any, of PGE to redeem or purchase such series pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof, and
the terms and conditions upon which such series shall be redeemed or purchased,
in whole or in part, pursuant to such obligations; (ix) the denominations in
which such series shall be issuable; (x) any other terms of such series; and
(xi) whether the Senior Unsecured Debt Securities of such series will be issued
as a global security, and in such case, the circumstances, if any, under which
beneficial owners of interests in any such global security may exchange such
interests for Senior Unsecured Debt Securities of such series, the manner for
payment of principal of and any premium and interest on such global security,
the identity of the depository, and the terms of the depository arrangement,
will be set forth in the Prospectus Supplement relating thereto which will
accompany this Prospectus.
The Senior Unsecured Debt Securities will not be secured by any lien, but
will rank on a parity with all other unsecured and unsubordinated indebtedness
of PGE.
The Senior Unsecured Debt Securities or any series thereof may be issued as
"original issue discount securities" to be sold at a discount below their
principal amount. Special federal income tax and other considerations applicable
thereto will be described in the Prospectus Supplement relating thereto.
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<PAGE> 22
THE SENIOR INDENTURE
The Senior Indenture will contain provisions, which will be described in
the Prospectus Supplement relating to the Senior Unsecured Debt Securities, with
regard to (i) PGE's consolidating or merging with or into any other corporation
or selling or conveying its property as an entirety or substantially as an
entirety to another corporation, (ii) PGE's granting to any holder of its
outstanding unsecured debt for money borrowed a mortgage, lien, encumbrance or
security interest in its property, (iii) the terms and conditions with regard to
amending or modifying the Senior Indenture; (iv) Events of Default with respect
to Senior Unsecured Debt Securities of any series; and (v) the duties and
responsibilities of the Senior Trustee.
The Senior Indenture will not contain any provisions that afford protection
to the holders of Senior Unsecured Debt Securities in the event of a highly
leveraged transaction involving PGE.
PGE will have the right at all times to assign any of its rights or
obligations under the Senior Indenture to Portland General or a direct or
indirect wholly owned subsidiary of Portland General or PGE; provided, that, in
the event of any such assignment, PGE will remain liable for all such
obligations. Subject to the foregoing, the Senior Indenture will be binding upon
and inure to the benefit of the parties thereto and their respective successors
and assigns, and may not otherwise be assigned.
The Senior Indenture and the Senior Unsecured Debt Securities will be
governed by and construed in accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
PGE may offer the Debt Securities ("Offered Securities") in one or more of
the following ways from time to time: (i) through underwriters or dealers; (ii)
directly to a limited number of purchasers or to a single purchaser; (iii)
through agents or (iv) through a combination of any such methods. A Prospectus
Supplement with respect to each series of the Offered Securities will set forth
the terms of the offering of the Offered Securities and the proceeds to PGE from
the sale thereof, the name or names of any underwriters or agents, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are utilized, the Offered Securities being sold to them
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Securities may be offered to the public either
through underwriting syndicates represented by one or more managing
underwriters, or directly by one or more firms acting as underwriters. The
underwriter or underwriters with respect to the Offered Securities being offered
will be named in a Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of such Prospectus Supplement. Any underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent, and that the underwriters will be obligated to
purchase all of the Offered Securities to which such underwriting agreement
relates if any are purchased. Any underwriter utilized may be entitled to
indemnification from PGE against certain civil liabilities, including
liabilities under the Securities Act of 1933.
The Offered Securities may be sold directly by PGE or through agents
designated by PGE from time to time. Any agent involved in the offer or sale of
the Offered Securities or any series thereof in respect of which this Prospectus
is delivered will be named, and any commissions payable by PGE to such agent
will be set forth, in a Prospectus Supplement. Agents who participate in the
distribution of the Offered Securities may be entitled to indemnification by PGE
against certain liabilities, including liabilities under the Securities Act of
1933.
If so indicated in the Prospectus Supplement, PGE will authorize
underwriters or other persons acting as agents to solicit offers by certain
institutions to purchase the Offered Securities from PGE pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
such contracts may be
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<PAGE> 23
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases will be subject to the approval of PGE. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Offered Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such agents will not have any responsibility in
respect of the validity or performance of such contracts.
Each series of Offered Securities will be a new issue of securities and
will have no established market. Any underwriters to whom Offered Securities are
sold by PGE for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given as to the liquidity of or the trading markets for any of the Offered
Securities.
LEGAL OPINIONS
Legal matters in connection with the issuance and sale of the Offered
Securities are being passed upon for PGE by Steven F. McCarrel, Deputy General
Counsel of Portland General and Assistant Secretary of PGE, and for the
underwriters or agents by Morgan, Lewis & Bockius LLP, 101 Park Avenue, New
York, NY 10178. As to all matters governed by Oregon law, Morgan, Lewis &
Bockius LLP will rely upon the opinion of Mr. McCarrel.
EXPERTS
PGE's consolidated financial statements and schedules included in its
Annual Report on Form 10-K for the year ended December 31, 1994, which are
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED IN THIS
PROSPECTUS, AS SUPPLEMENTED, IN CONNECTION WITH THE OFFERING MADE HEREBY AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN SO AUTHORIZED BY THE COMPANY OR BY THE AGENTS. THIS PROSPECTUS, AS
SUPPLEMENTED, DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS, AS SUPPLEMENTED, NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Certain Recent Developments........... S-2
Description of the Notes.............. S-2
Plan of Distribution.................. S-6
Ratio of Earnings to Fixed Charges.... S-6
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of Debt Securities........ 3
Plan of Distribution.................. 16
Legal Opinions........................ 17
Experts............................... 17
</TABLE>
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PORTLAND GENERAL
ELECTRIC COMPANY
[LOGO]
$50,000,000
MEDIUM-TERM NOTE SERIES V
(A SERIES OF FIRST MORTGAGE BONDS)
DUE FROM NINE MONTHS TO
THIRTY YEARS FROM DATE OF ISSUE
------------------------
PROSPECTUS SUPPLEMENT
------------------------
UBS Securities
PROSPECTUS SUPPLEMENT
DATED AUGUST 26, 1996
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<PAGE> 25
RULE 424(b)(2)
FILE NO. 33-62549
PRICING SUPPLEMENT NO. 1
DATED AUGUST 26, 1996
(TO PROSPECTUS DATED SEPTEMBER 11, 1995 AND
PROSPECTUS SUPPLEMENT DATED AUGUST 26, 1996)
PORTLAND GENERAL ELECTRIC COMPANY
MEDIUM-TERM NOTE SERIES V
(A SERIES OF FIRST MORTGAGE BONDS)
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<S> <C>
Principal Amount: $50,000,000
Discount and Commissions to Agent: .101%
Total Discount and Commissions to Agent: $ 50,500
Price to Public: 99.876%
Price to Company: 99.775%
Proceeds to Company: $49,887,500
Original Issue
Interest Rate: 6.625% Date: August 29, 1996
Interest Payment Dates: June 15 and Maturity
December 15 Date: August 31, 1999
Interest Payment Period: Semiannually
Terms of Redemption:
Initial Regular Redemption Date: None
Initial Regular Redemption Percentage: N/A
Annual Regular Redemption Percentage Reduction: N/A
Additional Terms:
Optional Repayment Dates: None
Other: None
Global Book-entry Form: X
Certificate Form:
(Check appropriate line)
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