<PAGE>
File Nos. 70-7218
70-7113
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 29 (POST-EFFECTIVE) TO
FORM U-1 APPLICATION-DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
__________________________
CSW CREDIT, INC.
1616 Woodall Rogers Freeway
P.O. Box 660164
Dallas, Texas 75202
CENTRAL AND SOUTH WEST CORPORATION
1616 Woodall Rogers Freeway
P.O. Box 660164
Dallas, Texas 75202
(Names of companies filing this application and
address of principal executive offices)
__________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
__________________________
Stephen J. McDonnell
Treasurer
Central and South West Corporation
1616 Woodall Rogers Freeway
P.O. Box 660164
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005-1413
(Names and addresses of agents for service)
Central and South West Corporation, a Delaware
corporation ("CSW") and a registered holding company under the
Public Utility Holding Company Act of 1935, as amended (the
"Act"), and CSW Credit, Inc., a Texas corporation and a wholly--
owned nonutility subsidiary of CSW ("CSW Credit"), hereby amend
the Form U-1 Application-Declarations in File Nos. 70-7218 & 70-
7113 (the "Application-Declarations") in the following respects.
In all other respects the Application-Declarations as previously
filed and amended will remain the same.
Item 1. Description of the Proposed Transaction.
CSW and CSW Credit hereby request, as more fully
described under paragraph (2) below: (i) that the accounts
receivable of Houston Lighting & Power Company ("HLP") factored
by CSW Credit not be included in determining whether CSW Credit
satisfies the 50% Restriction (as defined below) under previous
orders of the Commission, (ii) authority to borrow up to an
additional $216 million to purchase accounts receivable of
nonassociate utilities other than HLP, and (iii) authority to
increase CSW's equity investments in CSW Credit from $156 million
to $260 million, of which up to $80 million could be used to
purchase associate receivables, up to $100 million could be used
to purchase receivables of HLP and up to $80 million could be
used to purchase other nonassociate utility receivables.
(1) History
CSW owns all of the common stock of four domestic
electric operating subsidiaries, Central Power and Light Company
("CPL"), Public Service Company of Oklahoma, Southwestern
Electric Power Company and West Texas Utilities Company ("CSW
Operating Companies"). CSW's other subsidiaries include Transok,
Inc. ("Transok"), CSW Energy, Inc., CSW Credit, CSW Leasing,
Inc., Central and South West Services, Inc., CSW Communications,
Inc., EnerShop Inc. and SEEBOARD plc.
By order dated July 19, 1985, HCAR No. 23717; 70-7113
(the "1985 Order"), the Commission authorized CSW to organize CSW
Credit for the purposes of factoring the accounts receivable of
the CSW Operating Companies. Pursuant to the 1985 Order, CSW
Credit was authorized to borrow up to $320 million, and CSW was
authorized to make equity investments in CSW Credit up to $80
million.
By order dated July 31, 1986, HCAR No. 24157; 70-7218
(the "1986 Order"), the Commission authorized the expansion of
the scope of CSW Credit's permissible activities to include the
factoring of receivables of nonassociate utilities. To finance
these transactions, the Commission authorized CSW Credit to
borrow up to an additional $160 million and permitted CSW to make
additional equity investments in CSW Credit up to an additional
$40 million in order to maintain CSW Credit's equity-to-debt
capitalization ratio. The 1986 Order also provided that CSW
Credit would limit its acquisition of utility receivables from
nonassociate utilities so that the average amount of such
receivables for the preceding 12-month period outstanding as of
the end of any calendar month would be less than the average
amount of receivables acquired from associated companies
outstanding as of the end of each calendar month during the
preceding 12 month period (the "50% Restriction").
The provisions of the 1985 Order and the 1986 Order
were extended to December 31, 1989, with specified authorized
levels of borrowings and related equity investments. HCAR No.
24575; 70-7218, 70-7113 (Feb. 8, 1988). Specifically, the
Commission authorized CSW Credit to factor accounts receivable of
non-associated gas or electric utility companies and authorized
CSW Credit to borrow up to $320 million and $304 million to
finance the factoring of associate and non-associate receivables,
respectively. CSW was authorized to make equity investments in
CSW Credit of up to an aggregate of $80 million and $76 million
in connection with the factoring of associate and non-associate
receivables, respectively. In all other respects, the previously
granted authorities were extended through December 31, 1989.
By order dated December 27, 1989, HCAR No. 25009; 70-
7218 & 70-7113, the Commission authorized a reduction in the
equity-to-debt capitalization from approximately 20% to no less
than 15%.
By order dated August 30, 1990, HCAR No. 25138; 70-7218
& 70-7113, the Commission authorized a further reduction in the
equity-to-debt capitalization to not less than 5%.
By order dated December 24, 1991, HCAR No. 25443; 70-
7218 & 70-7113, the Commission authorized CSW Credit to borrow up
to an additional $200 million to finance the factoring of
associate receivables. In all other respects, the previously
granted authorizations were extended through December 31, 1992.
On May 29, 1992, CSW and CPL entered into a settlement
with Houston Industries Incorporated ("HII") and its subsidiary,
HLP, to normalize business relations between the two systems and
to settle several disputes which had existed between the two
systems for some time. One such dispute involved allegations by
CPL that HLP breached its duties and obligations in its
performance as the project manager for the South Texas Project
Electric Generating Station ("STP"). Other disputes included
wheeling and transmission claims as well as other Electric
Reliability Council of Texas ("ERCOT") operating disputes that
existed not only between HLP and CPL but also between HLP and
other CSW Operating Companies. For a discussion of CPL's demand
for arbitration and the litigation related to it, see "Item 1.
Business-South Texas Project - HLP Arbitration" in the CPL 1991
Annual Report on Form 10-K.
As part of the normalization of business relations
between the parties, HLP and CSW Credit agreed to arrangements
under which CSW Credit would purchase electric utility
receivables from HLP. By order dated December 29, 1992, HCAR No.
25720; 70-8037 (the "1992 Order"), the Commission authorized CSW
Credit, among other things, to borrow up to an additional $650
million during the 12-1/2 year term of the HLP agreement;
provided that such borrowings would only to be used to purchase
accounts receivable of HLP, subject to the 50% Restriction.
The initial version of the application in respect of
the 1992 Order also requested authorization for the factoring of
HLP receivables without regard to the 50% Restriction. However,
at the request of the Staff this request was withdrawn pending
the outcome of Administrative Proceeding File No. 3-7027, which
is summarized below.
Administrative Proceeding File No. 3-7027
In 1987, CSW and CSW Credit filed an application (the
"1987 Application") requesting that CSW Credit be allowed to
factor the accounts receivable of nonassociate utilities without
regard to the level of its factoring of accounts receivable of
utilities associated with CSW. To finance the proposed expansion
of its business, CSW Credit sought to borrow up to an additional
$750 million pursuant to bank lines of credit or commercial
paper. Similarly, CSW requested authority to make equity
investments in CSW Credit by way of capital contributions or
purchases of CSW Credit common stock up to an additional $150
million in order to maintain CSW Credit's then equity-to-debt
capitalization ratio of 20%.
In 1989, the Commission's Chief Administrative Law
Judge issued an initial decision (the "Initial Decision")
approving the 1987 Application. The Chief Administrative Law
Judge found that, since CSW Credit's factoring business satisfied
the three-part test announced in Jersey Central Power & Light
Co., HCAR No. 24348 (March 18, 1987), the amount of receivables
that CSW Credit factors from nonassociate utilities need not be
limited to the amount of receivables purchased from associated
companies.
The Division of Investment Management (the "Division")
petitioned the Commission for review of the Initial Decision.
The Commission granted the Division's petition, and in CSW
Credit, Inc., et al., HCAR No. 25995 (March 2, 1994) (the "1994
Order"), the Commission ruled that the activities of CSW Credit
are not factually similar to Jersey Central and, as a result, a
majority of the business conducted by CSW Credit must be with
affiliated utilities.
(2) Nature of Requests
(a) Factoring of HLP receivables
CSW and CSW Credit request authorization for CSW Credit
to factor accounts receivable of HLP without regard to the 50%
Restriction. Such factoring transactions are consistent with and
constitute an essential part of the normalization of CSW's
business relationship with HLP and the overall settlement between
the parties. Moreover, CSW's ability to factor the HLP
receivables without regard to the 50% Restriction was clearly
contemplated by the parties and was a significant inducement to
the parties to enter into the settlement. By artificially
limiting the amount of HLP receivables that CSW Credit is
permitted to factor, CSW Credit's revenue is also artificially
constrained with no offsetting reduction in costs. As a result,
the 50% Restriction from time to time interferes with CSW
Credit's ability to conduct its receivable business with HLP, the
effect of which is to raise CSW Credit's overall cost of doing
business and reducing the net benefit to the CSW Operating
Companies.
For these reasons, CSW believes it is essential to
obtain at least limited relief from the 50% Restriction related
to the factoring of HLP receivables. In 1995, the balance of HLP
receivables purchased by CSW Credit averaged approximately $327.1
million, the balance of receivables purchased from other
nonassociate utilities averaged approximately $27.7 million, and
the balance of receivables purchased from associate companies
averaged approximately $363.9 million. It is anticipated that
the balance of HLP receivables to be purchased by CSW Credit will
average approximately $350.0 million in 1996, and will not exceed
$650 million at any one time during the 12-1/2 year term of the
HLP agreement. No additional personnel or other facilities will
be required for CSW Credit to factor the HLP receivables.
(i) Requirements of Sections 10(c)(1) and 11 of the Public
Utility Holding Company Act of 1935
Section 10(c)(1) of the Act provides, in relevant part,
that the Commission shall not approve "an acquisition of
securities or utility assets, or of any other interest, which is
. . . detrimental to the carrying out of the provisions of
Section 11." 15 U.S.C. Section 79j(c)(1). Section 11(b) makes it the
duty of the Commission:
(1) To require . . . that each registered holding
company, and each subsidiary company thereof,
shall take such action as the Commission shall
find necessary to limit the operations of the
holding-company system of which such company is a
part to a single integrated public-utility system,
and to such other businesses as are reasonable
incidental, or economically necessary or
appropriate to the operations of such integrated
public-utility system.
15 U.S.C. Section 79k(b)(1).
(ii) CSW Credit's Proposed Activities Satisfy the
Requirements of Sections 10(c)(1) and 11 of the Act
Because CSW Credit will Continue to be Primarily
Devoted to Serving the Operations of the CSW System
The Commission has interpreted Section 11(b) to allow
the sale or lease by registered holding company subsidiaries to
non-affiliates of a variety of types of excess capacity. "[W]hen
a utility holding company has a non-utility business that is
functionally related to the utility operations and that has
capacity in excess of the utility operation's requirements, the
excess capacity may be sold to non-affiliates, but the non-
utility business must be primarily devoted to serving the
operations of the utility system." 1994 Order at 4 (citations
omitted). Thus, in the 1986 Order the Commission determined that
"it was sufficient that CSW Credit's factoring business was
primarily devoted to furthering CSW's operations." Id.
(citations omitted).
The factoring transactions with HLP for which approval
is sought arise from the particular circumstances specified
herein and are an element of the overall normalization of the
business relationship between CSW, CSW Credit, HII and HLP. The
tenancy-in-common relationship between CPL and HLP arising out of
their joint ownership of STP is substantially different from the
relationship that exists with respect to the other nonassociate
utilities for whom CSW Credit factors accounts receivable. CPL
and HLP are joint owners of a nuclear generating unit that is an
integral part of the utility operations of each company. By
factoring HLP accounts receivable, CSW Credit provides a
substantial benefit to HLP. Since it is in the interest of the
CSW system to promote the economic viability of HLP, a joint
owner of STP, it would be inappropriate to include these
purchases when calculating compliance with the 50% Restriction.
In addition, because CSW Credit is obligated to share with CPL a
portion of the revenues received by CSW Credit from the factoring
of HLP's receivables, the 50% Restriction from time to time may
indirectly result in lost revenues to CPL. Finally, CSW has been
exploring strategic alternatives for Transok, including, among
other things, a possible sale of the company. A sale of Transok,
if consummated, would likely cause CSW Credit's non-associate
receivables balance to exceed the 50% threshold unless the
Commission grants the relief requested herein. Based upon these
facts and circumstances, especially the relationship between CPL
and HLP as joint owners of STP and the potential benefits to CPL
relating to its sharing of revenues with CSW Credit from the
factoring of HLP receivables, the HLP accounts receivable
factored by CSW Credit should be treated as akin to the factoring
of accounts receivable on behalf of associate companies and
should therefore be considered to be functionally related to the
utility operations of the CSW system.
CSW and CSW Credit therefore respectfully request that
the amount of HLP receivables factored by CSW Credit not be
included in either the numerator or denominator for purposes of
determining compliance by CSW Credit with the 50% Restriction set
forth in the Commission's previous orders described in paragraph
(1) above. CSW Credit will continue to purchase receivables from
HLP in accordance with CSW Credit's customary business practice
and at prices consistent with the authorization previously
conferred upon CSW Credit by the Commission pursuant to the
orders summarized above.
(b) Additional Financing authority.
Pursuant to the orders summarized above and other
orders of the Commission, the following authority has been
granted through December 31, 1996: (1) CSW Credit has been
authorized to borrow up to $824 million, of which $520 million
may be used to purchase receivables of associate companies and
$304 million may be used to purchase receivables of nonassociate
companies; (2) CSW Credit has been authorized to borrow up to
$650 million, which will be used only to purchase accounts
receivable of HLP, subject to the 50% Restriction; and (3) CSW
has been authorized to make equity investments in CSW Credit up
to an aggregate of $156 million, of which $80 million may be used
for the purchase of associate receivables, and $76 million may be
used for the purchase of nonassociate receivables. As of April
30, 1996, CSW Credit had obtained committed commercial paper
credit back-up facilities aggregating $900 million, and had
$614.9 million of outstanding debt.
With respect to the request that CSW Credit be
permitted to disregard the factoring of HLP accounts receivable
for purposes of complying with the 50% Restriction, CSW hereby
requests authority to finance the proposed expansion of its
business for other nonassociate utilities by borrowing up to an
additional $216 million pursuant to bank lines of credit or
commercial paper, thereby increasing CSW's authority to incur
debt to finance the purchase of nonassociate receivables from
$304 million to $520 million. In addition, CSW requests
authority to make equity investments in CSW Credit of up to an
aggregate of $260 million (up from $156 million), of which up to
$80 million could be used to purchase receivables of affiliated
companies, up to $100 million could be used to purchase
receivables from HLP, and up to $80 million could be used to
purchase receivables from nonassociate utility companies.
CSW also requests authority to make loans to CSW Credit
and to issue guarantees of CSW Credit's obligations, in any
combination thereof, in an aggregate outstanding amount not to
exceed $850 million. CSW proposes to provide such loans out of
its internally generated funds or borrowings. Any such loans
from CSW to CSW Credit will have an interest rate per annum not
in excess of Mellon Bank's prime commercial lending rate as
announced from time to time plus 3% and will have a final
maturity not to exceed 30 years.
In addition, CSW requests authority for CSW Credit to
obtain the requisite funds for financing the proposed
transactions through open account advances from CSW, to obtain
lines of credit, or enter into loan agreements, which borrowings
will be negotiated and obtained, if possible, on a non-recourse
basis to CSW and its subsidiaries, other than CSW Credit, as
required to fund such transactions, unless CSW requests authority
otherwise. The specific terms and conditions of these borrowings
by CSW Credit will be subject to negotiation with the particular
lender or lenders. However, without prior approval of the
Commission, such terms and conditions will be no less favorable
than the following:
(i) The principal amount of such borrowings from time
to time outstanding shall bear interest at no more
than the prime commercial rate of the lending bank
plus 2%;
(ii) CSW Credit will be required either (a) to keep an
amount equal to 5% of the commitment amount in the
form of a depositary relationship with the lending
bank or (b) to pay to the lending bank a
commitment fee of 1/2% per annum of the amount of
the commitment of such lending bank;
(iii) CSW Credit will be allowed to prepay at any time
all or any part of the outstanding principal
amount of such borrowings without penalty; and
(iv) No such borrowing would have a term in excess of
10 years.
In no event, without further authority from the
Commission, would the sum of the aggregate of borrowings by CSW
Credit plus any equity contributions in CSW Credit by CSW, exceed
$1.95 billion.
Item 2. Fees, Commissions and Expenses.
The estimate of the approximate amount of fees and
expenses payable in connection with the transactions is as
follows:
Holding Company Act filing fee $ 2,000*
Counsel fees
Milbank, Tweed, Hadley & McCloy $ 7,500
Miscellaneous and incidental
expenses including travel,
telephone and postage $ 1,000
TOTAL $10,500
_______________
* Actual Amount
No transactional fees or commissions will be paid to
any associate or affiliate company of CSW in connection with the
proposed activities.
Item 3. Applicable Statutory Provisions.
Sections 6, 7, 9, 10 and 12 and Rule 45 under the 1935
Act are or may be applicable with respect to the proposed
activities.
Item 4. Regulatory Approval.
No approvals from any other governmental agency are
necessary for the proposed activities described herein.
Item 5. Procedure.
It is requested that the Commission issue and publish
no later than June 14, 1996, the requisite notice under Rule 23
with respect to the filing of this Application-Declaration, such
notice to specify a date not later than July 8, 1996, as the
date after which an order granting and permitting this
Application-Declaration to become effective may be entered by the
Commission and the Commission enter not later than July 9, 1996,
an appropriate order granting and permitting this Application
Declaration to become effective.
No recommended decision by a hearing officer or other
responsible officer of the Commission is necessary or required in
this matter. The Division of Investment Management of the
Commission may assist in the preparation of the Commission's
decision in this matter. There should be no thirty-day waiting
period between the issuance and the effective date of any order
issued by the Commission in this matter, and it is respectfully
requested that any such order be made effective immediately upon
the entry thereof.
Item 6. Exhibits and Financial Statements.
Exhibit 1 - Preliminary Opinion of Milbank, Tweed,
Hadley & McCloy, counsel to the Company
(to be filed by amendment).
Exhibit 2 - Final or "Past Tense" Opinion of
Milbank, Tweed, Hadley & McCloy, counsel
to the Company (to be filed with
Certificate of Notification.)
Exhibit 3 - Proposed Notice of Proceeding.
Exhibit 4 - Financial Statements of Central and
South West Corporation and its
subsidiaries per books and pro forma as
of March 30, 1996 (to be filed by
amendment).
Item 7. Information as to Environmental Effects.
The proposed transactions do not constitute a major
federal action having a significant effect on the quality of the
human environment.
S I G N A T U R E
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, as amended, the undersigned company
has duly caused this document to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 29, 1996
CENTRAL AND SOUTH WEST CORPORATION
By:/s/STEPHEN J. MCDONNELL
Stephen J. McDonnell
Treasurer
EXHIBIT INDEX
Exhibit Exhibit Transmission
Number Method
1 Preliminary Opinion of Milbank, Tweed, ---
Hadley & McCloy, counsel to the Company
(to be filed by amendment).
2 Final or "Past Tense" Opinion of ---
Milbank, Tweed, Hadley & McCloy,
counsel to the Company (to be filed
with Certificate of Notification.)
3 Proposed Notice of Proceeding. Electronic
4 Financial Statements of Central and South ---
West Corporation and its subsidiaries per
books and pro forma, as of March 30, 1996
(to be filed by amendment).
<PAGE>
EXHIBIT 3
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35 - )
Filings Under the Public Utility Holding Company Act of 1935
("Act")
_______________, 1996
Notice is hereby given that the following filing(s)
has/have been made with the Commission pursuant to provisions of
the Act and rules promulgated thereunder. All interested persons
are referred to the application(s) and/or declaration(s) for
complete statements of the proposed transaction(s) summarized
below. The application(s) and/or declaration(s) and any
amendment(s) thereto is/are available for public inspection
through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a
hearing on the application(s) and/or declaration(s) should submit
their views in writing by __________, 1996 to the Secretary,
Securities and Exchange Commission, Washington, D.C. 20549, and
serve a copy on the relevant applicant(s) and/or declarant(s) at
the address(es) specified below. Proof of service (by affidavit
or, in case of an attorney at law, by certificate) should be
filed with the request. Any request for hearing shall identify
specifically the issues of fact or law that are disputed. A
person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in
the manner. After said date, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or
permitted to become effective.
CSW Credit, Inc. (File Nos. 70-7113 & 70-7218)
CSW Credit, Inc. ("CSW Credit"), a wholly owned, non-
utility subsidiary of Central and South West Corporation ("CSW"),
a registered holding company, and CSW, both of 1616 Woodall
Rodgers Freeway, Dallas, Texas, 75202, have filed an application
with the Commission pursuant to Section 6, 7, 9, 10 and 12 and
Rules 23 and 45 thereunder.
By order dated July 19, 1985, HCAR No. 23717; 70-7113
(the "1985 Order"), the Commission authorized CSW to organize CSW
Credit for the purposes of factoring the accounts receivable of
the CSW Operating Companies. Pursuant to the 1985 Order, CSW
Credit was authorized to borrow up to $320 million, and CSW was
authorized to make equity investments in CSW Credit up to $80
million.
By order dated July 31, 1986, HCAR No. 24157; 70-7218
(the "1986 Order"), the Commission authorized the expansion of
the scope of CSW Credit's permissible activities to include the
factoring of receivables of nonassociate utilities. To finance
these transactions, the Commission authorized CSW Credit to
borrow up to an additional $160 million and permitted CSW to make
additional equity investments in CSW Credit up to an additional
$40 million in order to maintain CSW Credit's equity-to-debt
capitalization ratio. The 1986 Order also provided that CSW
Credit would limit its acquisition of utility receivables from
nonassociate utilities so that the average amount of such
receivables for the preceding 12-month period outstanding as of
the end of any calendar month would be less than the average
amount of receivables acquired from associated companies
outstanding as of the end of each calendar month during the
preceding 12 month period (the "50% Restriction").
The provisions of the 1985 Order and the 1986 Order
were extended to December 31, 1989, with specified authorized
levels of borrowings and related equity investments. HCAR No.
24575; 70-7218, 70-7113 (Feb. 8, 1988). Specifically, the
Commission authorized CSW Credit to factor accounts receivable of
non-associated gas or electric utility companies and authorized
CSW Credit to borrow up to $320 million and $304 million to
finance the factoring of associate and non-associate receivables,
respectively. CSW was authorized to make equity investments in
CSW Credit of up to an aggregate of $80 million and $76 million
in connection with the factoring of associate and non-associate
receivables, respectively. In all other respects, the previously
granted authorities were extended through December 31, 1989.
By order dated December 27, 1989, HCAR No. 25009; 70-
7218 & 70-7113, the Commission authorized a reduction in the
equity-to-debt capitalization from approximately 20% to no less
than 15%.
By order dated August 30, 1990, HCAR No. 25138; 70-7218
& 70-7113, the Commission authorized a further reduction in the
equity-to-debt capitalization to not less than 5%.
By order dated December 24, 1991, HCAR No. 25443; 70-
7218 & 70-7113, the Commission authorized CSW Credit to borrow up
to an additional $200 million to finance the factoring of
associate receivables. In all other respects, the previously
granted authorizations were extended through December 31, 1992.
On May 29, 1992, CSW and CPL entered into a settlement
with Houston Industries Incorporated ("HII") and its subsidiary,
Houston Lighting & Power Company ("HLP"), to normalize business
relations between the two systems and to settle several disputes
which had existed between the two systems for some time. One
such dispute involved allegations by CPL that HLP breached its
duties and obligations in its performance as the project manager
for the South Texas Project Electric Generating Station ("STP").
Other disputes included wheeling and transmission claims as well
as other Electric Reliability Council of Texas ("ERCOT")
operating disputes that existed not only between HLP and CPL but
also between HLP and other CSW Operating Companies.
As part of the normalization of business relations
between the parties, HLP and CSW Credit agreed to arrangements
under which CSW Credit would purchase electric utility
receivables from HLP. By order dated December 29, 1992, HCAR No.
25720; 70-8037 (the "1992 Order"), the Commission authorized CSW
Credit, among other things, to borrow up to an additional $650
million during the 12-1/2 year term of the HLP agreement;
provided that such borrowings would only to be used to purchase
accounts receivable of HLP, subject to the 50% Restriction.
The initial version of the application in respect of
the 1992 Order also requested authorization for the factoring of
HLP receivables without regard to the 50% Restriction. However,
at the request of the Staff this request was withdrawn pending
the outcome of Administrative Proceeding File No. 3-7027.
Pursuant to the orders summarized above and other
orders of the Commission, the following authority has been
granted through December 31, 1996: (1) CSW Credit has been
authorized to borrow up to $824 million, of which $520 million
may be used to purchase receivables of associate companies and
$304 million may be used to purchase receivables of nonassociate
companies; (2) CSW Credit has been authorized to borrow up to
$650 million, which will be used only to purchase accounts
receivable of HLP, subject to the 50% Restriction; and (3) CSW
has been authorized to make equity investments in CSW Credit up
to an aggregate of $156 million, of which $80 million may be used
for the purchase of associate receivables, and $76 million may be
used for the purchase of nonassociate receivables. As of April
30, 1996, CSW Credit had obtained committed commercial paper
credit back-up facilities aggregating $900 million, and had
$614.9 million of outstanding debt.
CSW Credit and CSW are now requesting (i) that the accounts
receivable of HLP factored by CSW Credit not be included in
determining whether CSW Credit satisfies the 50% Restriction
under previous orders of the Commission, (ii) authority to borrow
up to an additional $216 million to purchase accounts receivable
of nonassociate utilities other than HLP, and (iii) authority to
increase CSW's equity investments in CSW Credit from $156 million
to $260 million, of which up to $80 million could be used to
purchase associate receivables, up to $100 million could be used
to purchase receivables of HLP and up to $80 million could be
used to purchase other nonassociate utility receivables.
