<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-47485
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 3, 1998)
$250,000,000
PUBLIC SERVICE COMPANY OF COLORADO
FIRST COLLATERAL TRUST BONDS, SERIES NO. 6
6% BONDS DUE 2003
-----------------
The First Collateral Trust Bonds, Series No. 6, due 2003 (the "Offered
Bonds") of Public Service Company of Colorado (the "Company") will bear interest
at 6% per annum, will mature on April 15, 2003, and will not be redeemable prior
to maturity. See "CERTAIN TERMS OF THE OFFERED BONDS" herein and "DESCRIPTION
OF THE BONDS" in the accompanying Prospectus.
The Offered Bonds will be represented by global bonds (each a "Global
Bond") registered in the name of a nominee of The Depository Trust Company, as
Depository. Beneficial interests in Global Bonds representing Offered Bonds
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depository and its participants. The Offered Bonds will not
be represented by certificates issued in definitive form (such an Offered Bond,
so represented, being called a "Certificated Bond"), except under the limited
circumstances described herein. See "CERTAIN TERMS OF THE OFFERED
BONDS--Book-Entry System".
As discussed herein and in the accompanying Prospectus, the principal of
and accrued interest on the Offered Bonds will be secured by (i) an equal
principal amount of first mortgage bonds of the Company, which will not bear
interest, delivered to the 1993 Mortgage Trustee, and (ii) a second mortgage on
substantially all of the Company's properties used in the electric utility
business. Since such first mortgage bonds will not bear interest, an amount
equal to accrued interest, if any, on the Offered Bonds will be secured only by
such second mortgage. See "DESCRIPTION OF THE New BONDS--Security" in the
accompanying Prospectus.
---------------------
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
ACCOMPANYING PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Offered Bond . . . . . 99.852% 0.600% 99.252%
- --------------------------------------------------------------------------------
Total . . . . . . . . . . $249,630,000 $1,500,000 $248,130,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from April 20, 1998.
(2) The Company has agreed to indemnify the several Underwriters against
certain liabilities under the Securities Act of 1933, as amended. See
"UNDERWRITING".
(3) Before deduction of expenses payable by the Company estimated at $360,000.
-------------------------
The Offered Bonds are offered subject to prior sale, when, as and if
delivered to and accepted by the Underwriters, and subject to approval of
certain legal matters by their counsel and counsel for the Company. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the Offered
Bonds will be made through the book-entry facilities of The Depository Trust
Company on or about April 20, 1998.
---------------------------
SALOMON SMITH BARNEY
BANCAMERICA ROBERTSON STEPHENS
CHASE SECURITIES INC.
J.P. MORGAN & CO.
----------------
The date of this Prospectus Supplement is April 15, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE OFFERED BONDS.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE OFFERED BONDS IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES SEE "UNDERWRITING".
CERTAIN TERMS OF THE OFFERED BONDS
The following information concerning the Offered Bonds supplements, and
should be read in conjunction with, the statements under "DESCRIPTION OF THE NEW
BONDS" in the accompanying Prospectus. Certain capitalized terms used herein
which are not otherwise defined herein are defined in the accompanying
Prospectus.
GENERAL
The Offered Bonds will be issued as a series of the Company's First
Collateral Trust Bonds under the 1993 Mortgage, as previously supplemented and
as further supplemented by the supplemental indenture dated as of April 1, 1998
(the "Supplemental Indenture"), relating to the Offered Bonds. The statements
herein concerning the Offered Bonds, the 1993 Mortgage and the Supplemental
Indenture are merely a summary and do not purport to be complete. Such
statements make use of terms defined in the 1993 Mortgage and are qualified in
their entirety by reference to said documents.
The Offered Bonds will be issued in fully registered form only, without
coupons. Each Offered Bond will be issued initially in book-entry form. Except
as set forth herein under "Book-Entry System", the Offered Bonds will not be
issuable as Certificated Bonds. The authorized denominations of the Offered
Bonds will be $1,000 and integral multiples thereof.
PAYMENT AND MATURITY
Each Offered Bond will bear interest from April 20, 1998, payable
semiannually on April 15 and October 15, commencing October 15, 1998. The
interest on each Offered Bond (other than interest payable at maturity) will be
payable by check mailed to the person in whose name such Offered Bond is
registered at the close of business on the April 1 or October 1, as the case may
be, next preceding the interest payment date in respect thereof, except that (a)
in the case of a Global Bond representing Offered Bonds, such payment will be
made in accordance with arrangements then in effect among the Company, the
Trustee and the Depository (as hereinafter defined), and (b) if and to the
extent the Company defaults in the payment of the interest due on any interest
payment date, such defaulted interest will be paid to the person in whose name
such Offered Bond (or any bond or bonds issued upon transfer or exchange
thereof) is registered as of a Special Record Date fixed by the 1993 Mortgage
Trustee, which shall not be more than 30 days and not less than 10 days prior to
the date of payment of such defaulted interest, or payable in such other manner
as permitted by the 1993 Mortgage. Principal, premium, if any, and interest due
at maturity on the Offered Bonds will be payable upon presentation thereof at
the office of the Trustee that has been designated by the Company as its office
or agency for payment.
The Offered Bonds will mature on April 15, 2003, will be initially issued
in the aggregate principal amount of $250,000,000, and will bear interest at the
rate of 6% per annum.
S-2
<PAGE>
REDEMPTION OF THE OFFERED BONDS
The Offered Bonds will not be redeemable prior to maturity.
BOOK-ENTRY SYSTEM
The Offered Bonds will be issued in the form of Global Bonds that will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), or such other depository as may be subsequently designated by the
Company (DTC and any such other depository being herein referred to as the
"Depository"), and registered in the name of the Depository, or its nominee.
Except under the limited circumstances described below, Offered Bonds
represented by a Global Bond will not be exchangeable for Certificated Bonds.
So long as the Depository, or its nominee, is the registered owner of a
Global Bond, such Depository or such nominee, as the case may be, will be
considered the sole registered holder of the individual Offered Bonds
represented by such Global Bond for all purposes under the 1993 Mortgage.
Payments of principal of and premium, if any, and any interest on individual
Offered Bonds represented by a Global Bond will be made to the Depository or its
nominee, as the case may be, as the registered holder of such Global Bond.
Except as set forth below, owners of beneficial interests in a Global Bond will
not be entitled to have any of the individual Offered Bonds represented by such
Global Bond registered in their names, will not receive or be entitled to
receive physical delivery of any such Offered Bonds and will not be considered
the registered holder thereof under the 1993 Mortgage, including, without
limitation, for purposes of consenting to any amendment thereof or supplement
thereto as described in the accompanying Prospectus.
If (x) the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed within 90 days, or (y)
the Company executes and delivers to the Trustee a Company Order to the effect
that the Global Bond shall be exchangeable, or (z) an Event of Default has
occurred and is continuing with respect to the Offered Bonds and there has been
delivered to the Company and the 1993 Mortgage Trustee an Opinion of Counsel to
the effect that the interests of the beneficial owners of the Offered Bonds in
respect thereof will be materially impaired unless such owners hold Certificated
Bonds, the Company will issue individual Certificated Bonds in exchange for the
Global Bond representing the corresponding Offered Bonds. In any such instance,
an owner of an Offered Bond represented by a Global Bond will be entitled to
physical delivery of individual Certificated Bonds equal in principal amount to
such Offered Bond and to have such Certificated Bonds registered in its name.
Individual Certificated Bonds so issued will be issued as registered Offered
Bonds in denominations of $1,000 and integral multiples thereof.
The following is based upon information furnished by DTC:
DTC will act as securities depository for the Offered Bonds. The
Offered Bonds will be issued as fully registered securities registered
in the name of Cede & Co. (DTC's partnership nominee). Two fully
registered Global Bonds will be issued for the Offered Bonds, together
in the aggregate principal amount of such issue, and will be deposited
with DTC.
DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange
S-3
<PAGE>
Act. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants of DTC ("Direct
Participants") include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to
DTC's system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of the Offered Bonds under DTC's system must be made by or
through Direct Participants, which will receive a credit for such Offered
Bonds on DTC's records. The ownership interest of each actual purchaser of
each Offered Bond ("Beneficial Owner") is in turn to be recorded on the
records of Direct Participants and Indirect Participants. 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 Participants or Indirect Participants
through which such Beneficial Owner entered into the transaction. Transfers
of ownership interests in Offered Bonds are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive Certificated Bonds representing their
ownership interests in a Global Bond, except in the event that use of the
book-entry system for the Offered Bonds is discontinued.
To facilitate subsequent transfers, all the Offered Bonds which are
deposited with, or on behalf of, DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Offered Bonds with, or on
behalf of, 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 Offered Bonds; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Offered Bonds
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.
If applicable, redemption notices shall be sent to DTC. If less than
all of the Offered Bonds are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such issue
to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Offered Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to
the Company as soon as possible after the applicable record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Offered Bonds are credited on the
applicable record date (identified in a listing attached to the Omnibus
Proxy).
S-4
<PAGE>
Principal, premium, if any, and/or interest, if any, payments on the
Offered Bonds will be made to Cede & Co., as nominee of DTC. DTC's practice
is to credit Direct Participants' accounts, upon DTC's receipt of funds and
corresponding detail information from the Company or the 1993 Mortgage
Trustee, on the applicable payment date in accordance with their respective
holdings shown on DTC's records. 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 1993 Mortgage Trustee or the Company,
subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, premium, if any, and/or interest,
if any, to Cede & Co. is the responsibility of the Company and the 1993
Mortgage 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 Participants
and Indirect Participants.
A Beneficial Owner shall give notice of any option to elect to have
its Offered Bonds purchased or tendered, through its Participant, to the
1993 Mortgage Trustee, and shall effect delivery of such Offered Bonds by
causing the Direct Participant to transfer the Participant's interest in
the Offered Bonds, on DTC's records, to the 1993 Mortgage Trustee. The
requirement for physical delivery of Offered Bonds in connection with a
demand for repayment will be deemed satisfied when the ownership rights in
the Offered Bonds are transferred by Direct Participants on DTC's records.
DTC may discontinue providing its services as securities depository
with respect to the Offered Bonds at any time by giving reasonable notice
to the Company or the 1993 Mortgage Trustee. Under such circumstances, in
the event that a successor securities depository is not obtained,
Certificated Bonds are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Certificated Bonds will be printed and delivered.
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.
NONE OF THE COMPANY, THE 1993 MORTGAGE TRUSTEE OR ANY AGENT FOR PAYMENT ON
OR REGISTRATION OF TRANSFER OR EXCHANGE OF THE OFFERED BONDS WILL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS RELATING TO OR
PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN ANY GLOBAL BOND OR FOR
MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL
INTERESTS.
APPLICATION OF PROCEEDS
The net proceeds from the sale of the Offered Bonds will be used for
general corporate purposes and to repay short term and other debt incurred for
such purposes.
S-5
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Bond Purchase
Contract dated as of April 15, 1998 (the "Bond Purchase Contract") among the
Company and Salomon Brothers Inc, BancAmerica Robertson Stephens, Chase
Securities Inc. and J.P. Morgan Securities Inc. (the "Underwriters"), the
Company has agreed to sell to the Underwriters, and the Underwriters have
severally agreed to purchase, the respective principal amounts of the Offered
Bonds set forth after their names below.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
------------- ---------
<S> <C>
Salomon Brothers Inc.............. $100,000,000
BancAmerica Robertson Stephens.... 50,000,000
Chase Securities Inc.............. 50,000,000
J.P. Morgan Securities Inc........ 50,000,000
------------
Total................. $250,000,000
------------
------------
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Offered Bonds to the public at the public offering price set forth on
the cover page of this Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of 0.350% of the principal amount of the
Offered Bonds; that the Underwriters may allow, and such dealers may reallow, a
discount not in excess of 0.250% of the principal amount of the Offered Bonds to
certain other dealers; and that after the initial public offering, the public
offering price, concession and discount may be changed.
The Bond Purchase Contract provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
Salomon Brothers Inc, BancAmerica Robertson Stephens, Chase Securities Inc.
and J.P. Morgan Securities Inc. and certain affiliates thereof engage in
transactions with and perform commercial banking and investment banking services
for the Company and its affiliates in the ordinary course of business.
In order to facilitate the offering of the Offered Bonds, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Offered Bonds. Specifically, the Underwriters may overallot in
connection with the offering, creating a short position in the Offered Bonds for
their own account. In addition, to cover overallotments or to stabilize the
price of the Offered Bonds, the Underwriters may bid for, and purchase, the
Offered Bonds in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or a dealer for
distributing the Offered Bonds in the offering, if the syndicate repurchases
previously distributed Offered Bonds in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Offered Bonds above
independent market levels. The Underwriters are not required to engage in these
activities, and may end any of these activities at any time.
S-6
<PAGE>
The Company has been advised by each Underwriter that such Underwriter may
from time to time purchase and sell Offered Bonds in the secondary market, but
that it is not obligated to do so. There can be no assurance that there will be
a secondary market for the Offered Bonds or liquidity in the secondary market if
one develops. From time to time, each Underwriter may make a market in the
Offered Bonds. The Offered Bonds will not be listed on any securities exchange.
S-7
<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-47485
PROSPECTUS
$450,000,000
[PSCO LOGO]
FIRST COLLATERAL TRUST BONDS
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
--------------------
PSCO CAPITAL TRUST I
PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
PUBLIC SERVICE COMPANY OF COLORADO
--------------------
Public Service Company of Colorado, a Colorado corporation (the
"Company"), may offer, from time to time, (i) first collateral trust bonds,
which may include medium term notes (the "New Bonds"), (ii) unsecured senior
debt securities consisting of debentures, notes and/or other evidences of
indebtedness representing unsecured obligations of the Company (the "Senior
Debt Securities"), or (iii) unsecured subordinated debt securities consisting
of debentures, notes and/or other evidences of indebtedness representing
unsecured obligations of the Company (the "Subordinated Debt Securities",
together with the Senior Debt Securities, the "Debt Securities"), in each
case in one or more series, and in amounts, at prices and on terms to be
determined at or prior to the time or times of sale.
PSCO Capital Trust I (the "Trust"), a statutory business trust
formed under the laws of the State of Delaware, may offer a single series of
its preferred securities representing undivided beneficial interests in the
assets of the Trust ("Preferred Securities") in an amount and at the price
and terms to be determined at or prior to the time of sale. The Company will
be the owner of beneficial interests represented by the common securities of
the Trust (the "Common Securities", together with the Preferred Securities,
the "Trust Securities"). The payment of periodic cash distributions
("Distributions") with respect to the Preferred Securities out of moneys held
by the Trust, and payment upon liquidation, redemption or otherwise with
respect to such Preferred Securities, will be guaranteed by the Company to
the extent described herein (the "Preferred Securities Guarantee"). See
"Description of the Preferred Securities Guarantee" below. The Company's
obligations under the Preferred Securities Guarantee are subordinate and
junior in right of payment to all other liabilities of the Company and rank
PARI PASSU with the most senior preferred stock, if any, now outstanding or
issued from time to time by the Company. The Company's Subordinated Debt
Securities may be issued from time to time in one or more series directly or
may be issued and sold to the Trust, or a trustee of the Trust, in connection
with the investment of the proceeds from the offering of Preferred Securities
and Common Securities (as defined herein) of the Trust. Subordinated Debt
Securities purchased by the Trust may subsequently be distributed pro rata to
the holders of Preferred Securities and Common Securities in connection with
the dissolution of the Trust.
The New Bonds, Senior Debt Securities, Subordinated Debt Securities
and Preferred Securities together with the related Preferred Securities
Guarantee are collectively referred to as the "Offered Securities".
--------------------
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 date of this Prospectus is April 3, 1998.
-1-
<PAGE>
Certain specific terms of the Offered Securities in respect of
which this Prospectus is being delivered will be set forth in an accompanying
Prospectus Supplement or Supplements, together with the terms of the
particular Offered Securities being offered by such Prospectus Supplement or
Supplements, the initial price thereof and the net proceeds from the sale
thereof. The Prospectus Supplement will set forth with regard to the
particular Offered Securities, without limitation and where applicable, the
following: (i) in the case of the New Bonds, the designation, aggregate
principal amount, maturity date or dates, interest rate or rates and times of
payment of interest, the terms of any redemption provisions, the purchase
price and any other specific terms of the offering, (ii) in the case of the
Debt Securities, the designation, aggregate principal amount, denominations,
maturity date or dates, premium, if any, terms of subordination, if any, and
exchange, conversions, redemption or sinking fund provisions, interest
payment dates, interest rate or rates (which may be fixed or variable) or
method of calculating interest, currency or currency units in which principal
of, premium, if any, and interest will be payable, purchase price, any
listing on a securities exchange, any right of the Company to defer payment
of interest and the maximum length of such deferral period and any other
specific terms of the offering and (iii) in the case of the Preferred
Securities, the specific title, aggregate amount, number of securities,
stated liquidation preference per security, purchase price, any listing on a
securities exchange, dividend rate (or method of calculation thereof), dates
on which dividends shall be payable and dates from which dividends shall
accrue, any voting rights, any redemption, exchange or sinking fund
provisions, any other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the Preferred Securities shall be used to purchase a specific
series of Subordinated Debt Securities of the Company.
The Offered Securities may be sold to or through underwriters,
through dealers or agents, directly to purchasers or through a combination of
such methods. See "Plan of Distribution". The names of any underwriters,
dealers or agents involved in the sale of the Offered Securities in respect
of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth in the
related Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
-2-
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "SEC") and the New York Stock Exchange. Such
reports and other information can be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C., and at the following regional offices
of the SEC: New York Regional Office, 13th Floor, Seven World Trade Center,
New York, New York and Chicago Regional Office, 14th Floor, 500 West Madison
Street, Chicago, Illinois. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the SEC at its
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. Such material is also available from the SEC's Web site at
"http://www.sec.gov". Certain of the Company's securities are listed on the
New York Stock Exchange and such reports and other information can also be
inspected and copied at the office of such exchange on the 7th Floor, 20
Broad Street, New York, New York.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company and the Trust with the SEC under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Offered Securities. This Prospectus does not contain all of the
information set forth in such Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the SEC.
Reference is made to such Registration Statement and to the exhibits relating
thereto for further information with respect to the Company, the Trust, and
the Offered Securities. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement
or otherwise filed with the SEC or incorporated by reference herein are not
necessarily complete, and in each instance reference is made to the copy of
such document so filed for a more complete description of the matter
involved. Each such statement is qualified in its entirety by such reference.
No separate financial statements of the Trust have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the voting securities of the Trust will be owned, directly
or indirectly, by the Company, a reporting company under the Exchange Act,
(ii) the Trust has no independent operations but exists for the sole purpose
of issuing securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in Subordinated Debt
Securities issued by the Company and (iii) the Company's obligations
described herein and in any accompanying Prospectus Supplement under the
Declaration of Trust of the Trust, the Preferred Securities Guarantee, the
Subordinated Debt Securities purchased by the Trust and the related
Indenture, taken together, constitute a full and unconditional guarantee of
payments due on the Preferred Securities. See "Description of the
Subordinated Debt Securities" and "Description of the Preferred Securities
Guarantee".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates herein by reference the following documents
which have been filed by the Company with the SEC pursuant to the Exchange Act:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (included in the New Century Energies, Inc. combined Annual
Report on Form 10-K for the year ended December 31, 1997).
All documents filed by the Company with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of filing of the
Registration Statement of which this Prospectus is a part and prior to the
termination of the offering made hereby shall be deemed to be incorporated
herein by reference and to be a part hereof from the respective dates of
filing thereof. The documents incorporated or deemed to be
-3-
<PAGE>
incorporated herein by reference are sometimes hereinafter called the
"Incorporated Documents". Any statement contained herein or in an
Incorporated Document shall be deemed to be modified or superseded for all
purposes to the extent that a statement contained herein or in any Prospectus
Supplement or in any subsequently filed Incorporated Document modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY
OR ALL OF THE INCORPORATED DOCUMENTS, EXCLUDING THE EXHIBITS THERETO UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS.
REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO BRIAN P. JACKSON, SENIOR
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, BY MAIL TO PUBLIC SERVICE COMPANY
OF COLORADO, SUITE 900, 1225 17TH STREET, DENVER, COLORADO 80202-5533, OR BY
TELEPHONE AT (303) 571-7511.
In addition to the historical information contained or incorporated by
reference herein, this Prospectus contains or incorporates by reference a
number of "forward-looking statements" within the meaning of the Exchange
Act. Such statements address future events and conditions concerning capital
expenditures, resolution and impact of litigation, regulatory matters,
liquidity and capital resources and accounting matters. Actual results in
each case could differ materially from those projected in such statements due
to a variety of factors including, without limitation, restructuring of the
utility industry; future economic conditions; earnings retention and dividend
payout policies; developments in the legislative, regulatory and competitive
environments in which the Company operates; and other circumstances that
could affect anticipated revenues and costs, such as compliance with laws and
regulations. These and other factors are discussed in the Company's filings
with the SEC.
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THE COMPANY
The Company, incorporated through merger of predecessors under the laws
of the State of Colorado in 1924, is an operating public utility engaged
principally in the generation, purchase, transmission, distribution and sale
of electricity and in the purchase, transmission, distribution, sale and
transportation of natural gas, with the Company's principal distribution
center being the Denver metropolitan area. The Company's executive offices
are located at 1225 17th Street, Denver, Colorado 80202-5533, where the
telephone number is (303) 571-7511.
On August 1, 1997, the Company and Southwestern Public Service Company
consummated a business combination and each became a wholly-owned subsidiary
of New Century Energies, Inc. ("NCE"), a registered holding company under the
Public Utility Holding Company Act of 1935. The transaction has been
accounted for as a pooling of interests for accounting purposes. As a result
of the transaction, NCE directly owns the following subsidiaries which
previously had been directly owned by the Company: Cheyenne Light, Fuel and
Power Company and WestGas InterState, Inc. The Company directly owns the
following subsidiaries: PS Colorado Credit Corporation ("PSCCC"), PSR
Investments, Inc., 1480 Welton, Inc., Fuel Resources Development Co., a
dissolved corporation, and New Century International, Inc., which was
established in 1997 in connection with the Company's investment in Yorkshire
Power Group, plc. The Company intends to transfer the capital stock of PSCCC
to NCE after receipt of regulatory and other approvals. NC Enterprises,
Inc., a wholly-owned subsidiary of NCE, directly owns the following
subsidiaries which previously had been directly owned by the Company: e
prime, inc. and Natural Fuels Corporation. The Company intends that New
Century International, Inc., will be transferred to and become a wholly-owned
subsidiary of NC Enterprises, Inc. following receipt of appropriate
regulatory approval.
THE TRUST
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust (as such declaration will be amended
and restated substantially as set forth in the form attached to the
Registration Statement of which this Prospectus is a part, the "Declaration")
executed by the Company as depositor for the Trust (the "Depositor"), and the
PSCO Trustees (as defined herein) of such trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware.
The Trust exists for the exclusive purposes of (i) issuing and selling the
Preferred Securities and the Common Securities, (ii) using the gross proceeds
from the sale of the Trust Securities to acquire a corresponding series of
Subordinated Debt Securities of the Company and (iii) maintaining the status
of the Trust as a grantor trust for federal income tax purposes and engaging
in only those other activities necessary, appropriate, convenient or
incidental to the foregoing. All of the Common Securities will be directly
or indirectly owned by the Company. The Common Securities will rank PARI
PASSU, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of an event of
default with respect to the corresponding series of Subordinated Debt
Securities of the Company, the rights of the holders of the Common Securities
to payment of cash distributions and payments upon redemption, liquidation or
otherwise will be subordinated to the rights of the holders of the Preferred
Securities. The Company will directly or indirectly acquire Common
Securities in an aggregate liquidation amount equal to at least 3% of the
total capital of the Trust.
The Trust's business and affairs are conducted by three trustees, each
appointed by the Company in its capacity as holder of the Common Securities:
(i) The Bank of New York (the "Property Trustee"); (ii) The Bank of New York
(Delaware) (the "Delaware Trustee"); and (iii) one individual trustee who is
an employee or officer of or affiliated with the Company (the "Administrative
Trustee", and collectively with the Property Trustee and the Delaware
Trustee, the "PSCO Trustees"). The holder of the Common Securities, or the
holders of at least a majority in aggregate liquidation amount of the Trust's
Preferred Securities if an event of default under the Declaration has
occurred and is continuing (a "Declaration Event of Default"), will be
entitled to remove and replace the Property Trustee and the Delaware Trustee.
In no event will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustee, which
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voting rights are vested exclusively in the holder of the Common Securities.
The duties and obligations of each of the PSCO Trustees are governed by the
Declaration.
The Company will pay all fees and expenses related to the Trust and the
offering of its Preferred Securities and will pay, directly or indirectly,
all ongoing costs, expenses and liabilities of the Trust except the Trust's
obligations under its Trust Securities.
The principal place of business of the Trust shall be c/o Public Service
Company of Colorado, 1225 17th Street, Suite 900, Denver, Colorado
80202-5533, where the telephone number is (303) 571-7511.
RATIO OF CONSOLIDATED EARNINGS TO
CONSOLIDATED FIXED CHARGES
<TABLE>
Twelve Months Ended
December 31,
1993 1994 1995 1996 1997
--------------------------------------
<S> <C> <C> <C> <C> <C>
Ratio of consolidated earnings
to consolidated fixed charges 2.54 2.53 2.78 2.75 2.49
</TABLE>
The ratio for future periods will be included in the Company's annual
and quarterly reports filed pursuant to the Exchange Act. Such reports are
incorporated by reference into this Prospectus at the time they are filed.
APPLICATION OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement,
the Company intends to use the net proceeds from the sale of any of the New
Bonds or Debt Securities offered hereby (i) to refinance short-term and other
debt, (ii) to repurchase or redeem outstanding preferred stock of the
Company and (iii) for general corporate purposes. Any specific allocation
of the proceeds to a particular purpose that has been made at the date of any
Prospectus Supplement will be described therein. The Trust will use the
proceeds from the sale of its Preferred Securities to purchase Subordinated
Debt Securities of the Company.
DESCRIPTION OF THE NEW BONDS
GENERAL: The New Bonds will be issued in one or more series as fully
registered bonds, without coupons, under an Indenture, dated as of October 1,
1993 (the "Original 1993 Mortgage"), between the Company and First Trust of
New York, National Association, as successor trustee (together with any
further successor thereto, the "1993 Mortgage Trustee"). Effective March 30,
1998, the name of First Trust New York, National Association, changed to U.S.
Bank Trust National Association. The Original 1993 Mortgage, as supplemented
and to be supplemented by various supplemental indentures, including one or
more supplemental indentures relating to the New Bonds, is hereinafter
referred to as the "1993 Mortgage". The summaries under this heading do not
purport to be complete and are subject to, and qualified in their entirety
by, the detailed provisions of the 1993 Mortgage. Capitalized terms used
under this heading which are not otherwise defined hereunder shall have the
meanings ascribed thereto in the 1993 Mortgage. Wherever particular
provisions of the 1993 Mortgage or terms defined therein are referred to,
such provisions or definitions are incorporated by reference as a part of the
statements made herein and such statements are qualified in their entirety by
such reference. References to article and section numbers herein, unless
otherwise indicated, are references to article and section numbers of the
Original 1993 Mortgage.
The 1993 Mortgage provides that, in addition to the New Bonds, other
debt securities may be issued thereunder, without limitation as to the
aggregate principal amount, on the basis of Class A Bonds (as hereinafter
defined), property additions, retired Mortgage Securities (as hereinafter
defined) and cash. See
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"Issuance of Additional Mortgage Securities". The New Bonds and all other
debt securities heretofore or hereafter issued under the 1993 Mortgage are
collectively referred to herein as the "Mortgage Securities" or the "Bonds".
Reference is made to the Prospectus Supplement and any supplement
thereto for a description of the following terms of the series of New Bonds
in respect of which this Prospectus is being delivered: (i) the title of
such New Bonds; (ii) the aggregate principal amount of such New Bonds; (iii)
the price (expressed as a percentage of principal amount) at which such New
Bonds will be issued; (iv) the date or dates on which the principal of such
New Bonds is payable; (v) the rate or rates at which such New Bonds will bear
interest, if any, the date or dates from which such interest will accrue, the
dates on which such interest will be payable ("Interest Payment Dates"), and
the regular record dates for the interest payable on such Interest Payment
Dates; (vi) the option, if any, of the Company to redeem such New Bonds and
the period or periods within which, or the date or dates on which, the prices
at which and the terms and conditions upon which, such New Bonds may be
redeemed, in whole or in part, upon the exercise of such option; (vii) the
obligation, if any, of the Company to redeem or purchase such New Bonds at
the option of the registered holder or pursuant to any sinking fund or
analogous provisions and the period or periods within which, or the date or
dates on which, the price or prices at which and the terms and conditions
upon which such New Bonds will be redeemed or purchased, in whole or in part,
pursuant to such obligation; (viii) the denominations in which such New Bonds
will be issuable, if other than $1,000 and integral multiples thereof; (ix)
whether such New Bonds are to be issued in whole or in part in book-entry
form and represented by one or more global New Bonds and, if so, the identity
of the depository for such global New Bonds and the specific terms of the
depository arrangements therefor; and (x) any other terms of such New Bonds,
including with respect to any series, if applicable, any consents to
modifications or waivers of covenants contained in the 1993 Mortgage or the
1939 Mortgage (as defined below).
PAYMENT OF BONDS; TRANSFERS; EXCHANGES: Except as may be provided in the
applicable Prospectus Supplement or any supplement thereto, interest, if any,
on each Bond payable on each Interest Payment Date will be paid to the person
in whose name such Bond is registered (the registered holder of any Mortgage
Security being hereinafter called a "Holder") as of the close of business on
the regular record date relating to such Interest Payment Date; provided,
however, that interest payable at maturity (whether at stated maturity, upon
redemption or otherwise, hereinafter "Maturity") will be paid to the person
to whom principal is paid at Maturity. However, if there has been a default
in the payment of interest on any Bond, such defaulted interest may be
payable to the Holder of such Bond as of the close of business on a date
selected by the 1993 Mortgage Trustee which is not more than 30 days and not
less than 10 days prior to the date proposed by the Company for payment of
such defaulted interest or in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Bond may be listed,
if the 1993 Mortgage Trustee deems such manner of payment practicable. (See
Section 307.)
Unless otherwise specified in a Prospectus Supplement or supplement
thereto, the principal of and premium, if any, and interest on the Bonds at
Maturity will be payable upon presentation of the Bonds at the corporate
trust office of U.S. Bank Trust National Association, in New York, New York,
as Paying Agent for the Company. The Company may change the Place of
Payment on the Bonds, may appoint one or more additional Paying Agents
(including the Company) and may remove any Paying Agent, all at its
discretion. (See Section 602 and Article One of the Supplemental Indenture(s)
relating to the New Bonds.)
Unless otherwise specified in a Prospectus Supplement or supplement
thereto, the transfer of Bonds may be registered, and Bonds may be exchanged
for other Bonds of the same series and tranche, of authorized denominations
and of like tenor and aggregate principal amount, at the corporate trust
office of U.S. Bank Trust National Association, in New York, New York,
as Security Registrar for the Bonds. The Company may change the place
for registration of transfer and exchange of the Bonds, and may designate one
or more additional places for such registration and exchange, all at its
discretion. (See Section 602.) Except as otherwise provided in the
applicable Prospectus Supplement or a supplement thereto, no service charge
will be
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made for any transfer or exchange of the Bonds, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of the Bonds. The Company will not be required to execute or to
provide for the registration of transfer of or the exchange of (a) any Bond
during a period of 15 days prior to giving any notice of redemption or (b)
any Bond selected for redemption in whole or in part, except the unredeemed
portion of any Bond being redeemed in part. (See Section 305.)
REDEMPTION: Any terms for the optional or mandatory redemption of New
Bonds will be set forth in the Prospectus Supplement or a supplement thereto.
Except as shall otherwise be provided in the applicable Prospectus Supplement
or a supplement thereto with respect to Bonds redeemable at the option of the
Holder, Bonds will be redeemable only upon notice by mail not less than 30
nor more than 60 days prior to the date fixed for redemption, and, if less
than all the Bonds of a series, or any tranche thereof, are to be redeemed,
the particular Bonds to be redeemed will be selected by such method as shall
be provided for any particular series, or in the absence of any such
provision, by such method of random selection as the Security Registrar deems
fair and appropriate. (See Sections 503 and 504.)
Any notice of redemption at the option of the Company may state that
such redemption will be conditional upon receipt by the Paying Agent or
Agents, on or prior to the date fixed for such redemption, of money
sufficient to pay the principal of and premium, if any, and interest, if any,
on such Bonds and that if such money has not been so received, such notice
will be of no force and effect and the Company will not be required to redeem
such Bonds. (See Section 504.)
While the Original 1993 Mortgage contains provisions for the maintenance
of the Mortgaged Property, it does not contain any provisions for a
maintenance or sinking fund and, except as may be provided in the applicable
Prospectus Supplement or a supplement thereto, there will be no provisions
for any such funds for the New Bonds.
SECURITY: GENERAL. Except as discussed under this heading and under
"Issuance of Additional Mortgage Securities" below, all Mortgage Securities
now or hereafter issued under the 1993 Mortgage will be secured, equally and
ratably, primarily by
(a) an equal principal amount of first mortgage bonds (which need
not bear interest) issued under the Company's Indenture, dated as of
December 1, 1939 (the "Original 1939 Mortgage"), between the Company and
U.S. Bank Trust National Association (formerly First Trust of New York,
National Association), as successor trustee (together with any further
successor thereto, the "1939 Mortgage Trustee"), and delivered to the
Trustee under the 1993 Mortgage (the Original 1939 Mortgage, as amended
and supplemented, being hereinafter called the "1939 Mortgage"). As
discussed under "DESCRIPTION OF THE 1939 MORTGAGE--Security", the 1939
Mortgage constitutes, subject to certain exceptions, a first mortgage
lien on substantially all properties of the Company; and
(b) the lien of the 1993 Mortgage on substantially all of the
Company's properties used or to be used in or in connection with the
business of generating, purchasing, transmitting, distributing and/or
selling electric energy (the "Electric Utility Business"), which lien is
junior to the lien of the 1939 Mortgage.
As discussed below under "Class A Bonds", following a merger or
consolidation of another corporation into the Company or the transfer to the
Company of property subject to the lien of an existing mortgage and the
assumption by the Company of all the obligations of the mortgagor under such
mortgage, the Company could deliver to the 1993 Mortgage Trustee bonds issued
under a mortgage existing on the properties acquired in such transaction in
lieu of or in addition to bonds issued under the 1939 Mortgage. In such
event, the Mortgage Securities would be secured, additionally, by such bonds
and by the lien of the 1993 Mortgage on such properties, which would be
junior to the liens of such existing mortgage and the 1939 Mortgage on
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such properties. The 1939 Mortgage and all such other mortgages are
hereinafter collectively referred to as "Class A Mortgages", and all bonds
issued under the Class A Mortgages and delivered to the 1993 Mortgage Trustee
are hereinafter collectively referred to as "Class A Bonds". If and when no
Class A Mortgages are in effect, the 1993 Mortgage will constitute a first
mortgage lien on all property of the Company subject thereto, subject to
certain Permitted Liens (as discussed below under "Lien of the 1993
Mortgage"). As discussed below under "Class A Bonds", at the date of this
Prospectus the only Class A Mortgage is the 1939 Mortgage. The Company
currently believes that it is possible that prior to the Stated Maturity of
the New Bonds, all Class A Bonds outstanding under the 1939 Mortgage, other
than Class A Bonds delivered to and held by the 1993 Mortgage Trustee as the
basis of authentication and delivery of Mortgage Securities, may have been
paid, redeemed or otherwise retired and that, thereupon, the Class A Bonds
issued under the 1939 Mortgage would be surrendered for cancellation and the
1939 Mortgage would be discharged. Upon discharge of the 1939 Mortgage and
assuming no other Class A Mortgage exists at the time, the 1993 Mortgage
would become a first mortgage lien on all property of the Company subject
thereto, subject to certain Permitted Liens.
CLASS A BONDS. Class A Bonds issued as the basis for the authentication
and delivery of Mortgage Securities will be issued and delivered to, and
registered in the name of, the 1993 Mortgage Trustee or its nominee and will
be owned and held by the 1993 Mortgage Trustee, subject to the provisions of
the 1993 Mortgage, for the benefit of the Holders of all Mortgage Securities
Outstanding from time to time, and the Company will have no interest in such
Class A Bonds. Class A Bonds issued as the basis of authentication and
delivery of Mortgage Securities (a) will mature or be subject to mandatory
redemption on the same dates, and in the same principal amounts, as such
Mortgage Securities and (b) will contain, in addition to any mandatory
redemption provisions applicable to all Class A Bonds Outstanding under the
related Class A Mortgage, mandatory redemption provisions correlative to
provisions for mandatory redemption of such Mortgage Securities (pursuant to
a sinking fund or otherwise), or for redemption at the option of the Holder
of such Mortgage Securities. Class A Bonds issued as the basis for
authentication and delivery of a series or tranche of Mortgage Securities (x)
may, but need not, bear interest, any such interest to be payable at the same
times as interest on the Mortgage Securities of such series or tranche and
(y) may, but need not, contain provisions for the redemption thereof at the
option of the Company, any such redemption to be made at a redemption price
or prices not less than the principal amount of such Class A Bonds. (See
Sections 402 and 701.) To the extent that Class A Bonds issued as the basis
for the authentication and delivery of New Bonds do not bear interest,
holders of Mortgage Securities will not have the benefit of the lien of the
1939 Mortgage in respect of an amount equal to accrued interest, if any, on
such New Bonds; however, such holders will nevertheless have the benefit of
the lien of the 1993 Mortgage in respect of such amount.
Any payment by the Company of principal of, or premium or interest on,
the Class A Bonds held by the 1993 Mortgage Trustee will be applied by the
1993 Mortgage Trustee to the payment of any principal, premium or interest,
as the case may be, in respect of the Mortgage Securities which is then due
and, to the extent of such application, the obligation of the Company under
the 1993 Mortgage to make such payment in respect of the Mortgage Securities
will be deemed satisfied and discharged. If, at the time of any such payment
of principal of Class A Bonds, there shall be no principal then due in
respect of the Mortgage Securities, such payment in respect of the Class A
Bonds will be deemed to constitute Funded Cash and will be held by the 1993
Mortgage Trustee as part of the Mortgaged Property, to be withdrawn, used or
applied as provided in the 1993 Mortgage; and thereafter the Mortgage
Securities authenticated and delivered on the basis of such Class A Bonds
will, to the extent of such payment of principal, be deemed to have been
authenticated and delivered on the basis of the deposit of cash. If, at the
time of any such payment of premium or interest on Class A Bonds, there shall
be no premium or interest, as the case may be, then due in respect of the
Mortgage Securities, such payment will be remitted to the Company at its
request; provided, however, that if an Event of Default, as described below,
shall have occurred and be continuing, such payment shall be held as part of
the Mortgaged Property until such Event of Default shall have been cured or
waived. (See Section 702 and "Withdrawal of Cash" below.) Any payment by
the Company of principal of, or premium or interest on, Mortgage Securities
authenticated and delivered on the basis of the issuance and delivery to the
1993 Mortgage Trustee of Class A Bonds (other than by application of the
proceeds of a payment in respect of such Class A
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Bonds) will, to the extent thereof, be deemed to satisfy and discharge the
obligation of the Company, if any, to make a payment of principal, premium or
interest, as the case may be, in respect of such Class A Bonds which is then
due. (See Section 702 and Article One of the Supplemental Indenture(s) to
the 1939 Mortgage creating the Class A Bonds to be delivered in connection
with the issuance of the New Bonds.)
The 1993 Mortgage Trustee may not sell, assign or otherwise transfer any
Class A Bonds except to a successor trustee under the 1993 Mortgage. (See
Section 704.) At the time any Mortgage Securities of any series or tranche
which have been authenticated and delivered upon the basis of the issuance
and delivery to the 1993 Mortgage Trustee of Class A Bonds, cease to be
Outstanding (other than as a result of the application of the proceeds of the
payment or redemption of such Class A Bonds) the 1993 Mortgage Trustee will
surrender to or upon the order of the Company an equal principal amount of
such Class A Bonds. (See Section 703.)
At the date of this Prospectus, the only Class A Mortgage is the 1939
Mortgage and the only Class A Bonds issuable at this time are first mortgage
bonds issuable thereunder. The 1993 Mortgage provides that, in the event
that a corporation which was a mortgagor under a mortgage shall have merged
into or consolidated with the Company, or shall have conveyed or otherwise
transferred property to the Company subject to the lien of such a mortgage
and the Company shall have assumed all the obligations of the mortgagor
thereunder, and in either case such mortgage constitutes a lien on properties
of such other corporation or on such transferred properties, as the case may
be, prior to the lien of the 1993 Mortgage, such existing mortgage may be
designated by the Company as an additional Class A Mortgage. Bonds
thereafter issued under such additional mortgage would be Class A Bonds and
could provide the basis for the authentication and delivery of Mortgage
Securities under the 1993 Mortgage. (See Section 706.) When no Class A Bonds
are Outstanding under a Class A Mortgage except for Class A Bonds held by the
1993 Mortgage Trustee, then, at the request of the Company and subject to
satisfaction of certain conditions, the 1993 Mortgage Trustee will surrender
such Class A Bonds for cancellation and the related Class A Mortgage will be
satisfied and discharged, the lien of such Class A Mortgage on the Company's
property will cease to exist and the priority of the lien of the 1993
Mortgage will be increased accordingly. (See Section 707.)
The 1993 Mortgage contains no restrictions on the issuance of Class A
Bonds in addition to Class A Bonds issued to the 1993 Mortgage Trustee as the
basis for the authentication and delivery of Mortgage Securities. Class A
Bonds may currently be issued under the 1939 Mortgage on the basis of
property additions, retirements of bonds previously issued under the 1939
Mortgage and cash deposited with the 1939 Mortgage Trustee. See "DESCRIPTION
OF THE 1939 MORTGAGE--Issuance of Additional Bonds Under the 1939 Mortgage".
LIEN OF THE 1993 MORTGAGE. In the opinion of LeBoeuf, Lamb, Greene &
MacRae, L.L.P., based on information obtained from public records and from
the Company, the 1993 Mortgage constitutes a mortgage lien on the property
specifically or generally described or referred to therein as subject to the
lien thereof, except such property as may have been disposed of or released
from the lien thereof in accordance with the terms thereof, subject to no
liens prior to the lien of the 1993 Mortgage other than the lien of the 1939
Mortgage (so long as the 1939 Mortgage remains in effect), the liens of any
other Class A Mortgages and Permitted Liens; and the 1993 Mortgage
effectively subjects to the lien thereof property (other than excepted
property) acquired by the Company after the date of the execution and
delivery thereof to the extent, and subject to the qualifications,
hereinafter described. So long as such 1939 Mortgage is in effect, the Bonds
will have the benefit of the first mortgage lien of the 1939 Mortgage on such
property, and the benefit of the prior lien of any additional Class A
Mortgage on any property subject thereto, to the extent of the aggregate
principal amount of Class A Bonds issued under the respective Class A
Mortgages and held by the 1993 Mortgage Trustee for the benefit of holders of
First Collateral Trust Bonds, including the New Bonds. The properties
subject to the lien of the 1993 Mortgage, whether currently owned or
hereafter acquired, are the Company's properties used or to be used in or in
connection with the Electric Utility Business (whether or not
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such is the sole use of such properties). Properties relating to the
Company's gas and steam businesses are not subject to the lien of the 1993
Mortgage.
The lien of the 1993 Mortgage is subject to Permitted Liens which
include tax liens and other governmental charges which are not delinquent or
which are being contested in good faith; certain workmen's, materialmen's and
other liens; certain judgment liens and attachments; certain easements,
leases, reservations or other rights of others (including governmental
entities) in, on, over, and/or across, and laws, regulations and restrictions
affecting, and defects, irregularities, exceptions and limitations in title
to, certain property of the Company; certain leasehold interests; certain
rights and interests of others which relate to common ownership or joint use
of property and liens on the interests of others in such property; certain
non-exclusive rights and interests retained by the Company with respect to
property used or to be used in or in connection with both the businesses in
which the Mortgaged Property is used and any other businesses; and certain
other liens and encumbrances. (See Granting Clauses and Section 101.)
There are excepted from the lien of the 1993 Mortgage, among other
things, cash and securities not paid or delivered to, deposited with or held
by the 1993 Mortgage Trustee under the 1993 Mortgage; contracts, leases and
other agreements of whatsoever kinds, contract rights, bills, notes and other
instruments, accounts receivable, claims, governmental and other permits,
allowances and franchises, certain intellectual property rights and other
intangibles; automobiles, other vehicles, movable equipment and aircraft;
goods, stock in trade, wares and merchandise held for sale or lease in the
ordinary course of business; materials, supplies and other personal property
consumable in the operation of the Mortgaged Property; fuel, including
nuclear fuel, whether or not consumable in the operation of the Mortgaged
Property; furniture and furnishings; computers, machinery and
telecommunication and other equipment used exclusively for corporate
administrative or clerical purposes; coal, ore, gas, oil and other minerals
and timber, and rights and interests in any such minerals or timber, whether
or not such minerals or timber have been mined or extracted or otherwise
separated from the land; electric energy, gas (natural or artificial), steam,
water and other products generated, produced, manufactured, purchased or
otherwise acquired by the Company; leasehold interests held by the Company as
lessee; and property that is located outside of the State of Colorado. (See
"Excepted Property".)
Without the consent of the Holders, the Company and the 1993 Mortgage
Trustee may enter into supplemental indentures in order to subject to the
lien of the 1993 Mortgage additional property, whether or not used or to be
used in or in connection with the Electric Utility Business (including
property which would otherwise be excepted from such lien). (See Section
1401.) Such property would thereupon constitute Property Additions (so long
as it would otherwise qualify as Property Additions as described below) and
be available as a basis for the issuance of Mortgage Securities. See
"Issuance of Additional Mortgage Securities".
The 1993 Mortgage contains provisions subjecting to the lien thereof
after-acquired property used or to be used in the Electric Utility Business,
subject to the prior lien of the 1939 Mortgage (for as long as such prior
lien is in effect). These provisions are limited in the case of
consolidation or merger (whether or not the Company is the surviving
corporation) or transfer of the Mortgaged Property as, or substantially as,
an entirety. In the event of consolidation or merger or the transfer of the
Mortgaged Property as or substantially as an entirety, the 1993 Mortgage will
not be required to be a lien upon any of the properties then owned or
thereafter acquired by the successor corporation except properties acquired
from the Company in or as a result of such transaction and improvements,
extensions and additions to such properties and renewals, replacements and
substitutions of or for any part or parts of such properties. (See Article
Thirteen and "Consolidation, Merger, etc.") In addition, after-acquired
property may be subject to liens existing or placed thereon at the time of
acquisition thereof, including, but not limited to, purchase money liens and
the lien of any Class A Mortgage.
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The 1993 Mortgage provides that the 1993 Mortgage Trustee will have a lien,
prior to the lien on behalf of the holders of Mortgage Securities, upon the
Mortgaged Property for the payment of its reasonable compensation and expenses
and for indemnity against certain liabilities. (See Section 1107.)
ISSUANCE OF ADDITIONAL MORTGAGE SECURITIES: The aggregate principal amount
of Mortgage Securities which may be authenticated and delivered under the 1993
Mortgage is unlimited. (See Section 301.) Mortgage Securities of any series
may be issued from time to time on the basis of, and in an aggregate principal
amount not exceeding:
(a) the aggregate principal amount of Class A Bonds issued and
delivered to the 1993 Mortgage Trustee;
(b) 70% of the Cost or Fair Value to the Company (whichever is less)
of Property Additions (as described below) which do not constitute Funded
Property (generally, Property Additions which have been (i) made the basis
of the authentication and delivery of Mortgage Securities, the release of
Mortgaged Property or cash withdrawals, (ii) substituted for retired
property or (iii) used as the basis of a credit against, or otherwise in
satisfaction of, any sinking, improvement, maintenance, replacement or
similar fund, provided that Mortgage Securities of the series or tranche to
which such fund relates remain Outstanding) after certain deductions and
additions, primarily including adjustments to offset property retirements;
(c) the aggregate principal amount of Retired Securities (which
consist of Mortgage Securities no longer outstanding under the 1993
Mortgage which have not been used for certain other purposes under the 1993
Mortgage and which have not been paid, redeemed or otherwise retired by the
application of Funded Cash), but if Class A Bonds had been made the basis
for the authentication and delivery of such Retired Securities, only if
such Retired Securities became Retired Securities after the discharge of
the related Class A Mortgage; and
(d) an amount of cash deposited with the 1993 Mortgage Trustee.
(See Article Four.)
In general, the issuance of Mortgage Securities is subject to the Adjusted
Net Earnings of the Company for 12 consecutive months within the preceding 18
months being at least twice the Annual Interest Requirements on all Mortgage
Securities at the time outstanding, new Mortgage Securities then applied for,
all outstanding Class A Bonds other than Class A Bonds held by the 1993 Mortgage
Trustee under the 1993 Mortgage, and all other indebtedness (with certain
exceptions) secured by a lien prior to the lien of the 1993 Mortgage, except
that no such net earnings requirement need be met if the additional Mortgage
Securities to be issued are to have no Stated Interest Rate prior to Maturity.
Adjusted Net Earnings are calculated before, among other things, provisions for
income taxes; depreciation or amortization of property; interest and
amortization of debt discount and expense; any non-recurring charge to income or
retained earnings of whatever kind or nature (including without limitation the
recognition of expense due to the non-recoverability of investment or expense),
whether or not recorded as a non-recurring item in the Company's books of
account; and any refund of revenues previously collected or accrued by the
Company subject to possible refund. The calculation of Adjusted Net Earnings
also does not, or, in the case of losses or expense, is not required to, include
profits or losses from the sale or other disposition of property, or
non-recurring items of revenue, income or expense of any kind or nature.
(See Sections 103 and 401.)
The Company is not required to satisfy the net earnings requirement prior
to issuance of Mortgage Securities (i) as provided in (a) above if the Class A
Bonds issued and delivered to the 1993 Mortgage Trustee as the basis for such
issuance have been authenticated and delivered under the related Class A
Mortgage on the basis of retired Class A Bonds or (ii) as provided in (c) above.
In general, the interest requirement with
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respect to variable interest rate indebtedness, if any, is determined with
reference to the rate or rates in effect on the date immediately preceding
such determination or the rate to be in effect upon initial authentication.
With respect to Mortgage Securities of a series subject to a Periodic
Offering (such as a medium-term note program), the 1993 Mortgage Trustee will
be entitled to receive a certificate evidencing compliance with the net
earnings requirements only once, at or prior to the time of the first
authentication and delivery of the Mortgage Securities of such series. (See
Article Four.)
Property Additions generally include any property which is owned by the
Company and is subject to the lien of the 1993 Mortgage except (with certain
exceptions) goodwill, going concern value rights or intangible property, or any
property the cost of acquisition or construction of which is properly chargeable
to an operating expense account of the Company. (See Section 104.)
Unless otherwise provided in the applicable Prospectus Supplement or a
supplement thereto, until the 1939 Mortgage has been discharged, the Company
will issue the New Bonds on the basis of Class A Bonds issued under its 1939
Mortgage.
RELEASE OF PROPERTY: Unless an Event of Default has occurred and is
continuing, the Company may obtain the release from the lien of the 1993
Mortgage of any Funded Property, except for cash held by the 1993 Mortgage
Trustee, upon delivery to the 1993 Mortgage Trustee of cash equal in amount to
the amount, if any, that the Cost of the property to be released (or, if less,
the Fair Value to the Company of such property at the time it became Funded
Property) exceeds the aggregate of:
(a) the aggregate principal amount, subject to certain limitations,
of obligations delivered to the 1993 Mortgage Trustee which are secured by
purchase money liens upon the property to be released;
(b) the Cost or Fair Value to the Company (whichever is less) of
certified Property Additions not constituting Funded Property after certain
deductions and additions, primarily including adjustments to offset
property retirements (except that such adjustments need not be made if such
Property Additions were acquired or made within the 90-day period preceding
the release);
(c) an amount equal to 10/7ths of the principal amount of Mortgage
Securities the Company would be entitled to issue on the basis of Retired
Securities (with such entitlement to issue such principal amount of
Mortgage Securities being waived by operation of such release);
(d) an amount equal to 10/7ths of the principal amount of Outstanding
Mortgage Securities delivered to the 1993 Mortgage Trustee (with such
Mortgage Securities to be cancelled by the 1993 Mortgage Trustee);
(e) an amount of cash and/or the aggregate principal amount, subject
to certain limitations, of obligations secured by purchase money liens upon
the property to be released, which in either case is evidenced to the 1993
Mortgage Trustee by a certificate of the trustee or other holder of a lien
prior to the lien of the 1993 Mortgage to have been received by such
trustee or such other holder in accordance with the provisions of such lien
in consideration for the release of such property or any part thereof from
such lien; and
(f) any taxes and expenses incidental to any sale, exchange,
dedication or other disposition of the property to be released.
Property which is not Funded Property may generally be released from
the lien of the 1993 Mortgage without depositing any cash or property with
the 1993 Mortgage Trustee as long as (a) the aggregate amount of Cost or
Fair Value to the Company (whichever is less) of all Property Additions
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which do not constitute Funded Property (excluding the property to be
released) after certain deductions and additions, primarily including
adjustments to offset property retirements, is not less than zero or (b)
the Cost or Fair Value (whichever is less) of property to be released does
not exceed the aggregate amount of the Cost or Fair Value to the Company
(whichever is less) of Property Additions acquired or made within the
90-day period preceding the release.
The 1993 Mortgage provides simplified procedures for the release of
property which has been released from the lien of a Class A Mortgage, minor
properties and property taken by eminent domain, and provides for dispositions
of certain obsolete property and grants or surrender of certain rights without
any release or consent by the 1993 Mortgage Trustee.
If any property released from the lien of the 1993 Mortgage continues to be
owned by the Company after such release, the 1993 Mortgage will not become a
lien on any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property.
(See Article Eight.)
WITHDRAWAL OF CASH: Unless an Event of Default has occurred and is
continuing and subject to certain limitations, cash held by the 1993 Mortgage
Trustee may
(a) be withdrawn by the Company
(i) to the extent of the Cost or Fair Value to the Company
(whichever is less) of Property Additions not constituting Funded
Property, after certain deductions and additions, primarily including
adjustments to offset retirements (except that such adjustments need
not be made if such Property Additions were acquired or made within
the 90-day period preceding the release) or
(ii) in an amount equal to 10/7ths of the aggregate principal
amount of Mortgage Securities that the Company would be entitled to
issue on the basis of Retired Securities (with the entitlement to such
issuance being waived by operation of such withdrawal) or
(iii) in an amount equal to 10/7ths of the aggregate
principal amount of any Outstanding Mortgage Securities delivered to
the 1993 Mortgage Trustee, or
(b) upon the request of the Company, be applied to
(i) the purchase of Mortgage Securities (at prices not
exceeding 10/7ths of the principal amount thereof) or
(ii) the payment (or provision therefor for the satisfaction
and discharge of any Mortgage Securities) at Stated Maturity of any
Mortgage Securities or the redemption (or similar provision therefor)
of any Mortgage Securities which are redeemable (with any Mortgage
Securities received by the 1993 Mortgage Trustee pursuant to these
provisions being canceled by the 1993 Mortgage Trustee) (see Section
806);
provided, however, that cash deposited with the 1993 Mortgage Trustee as the
basis for the authentication and delivery of Mortgage Securities, as well as
cash representing a payment of principal of Class A Bonds, may only be withdrawn
in an amount equal to the aggregate principal amount of Mortgage Securities the
Company would be entitled to issue on any basis (with the entitlement to such
issuance being waived by operation of such withdrawal), or may, upon the request
of the Company, be applied to the purchase, redemption or payment of Mortgage
Securities at prices not exceeding, in the aggregate, the principal amount
thereof. (See Sections 405 and 702.)
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CONSOLIDATION, MERGER, ETC.: The Company may not consolidate with or merge
into any other corporation or convey, otherwise transfer or lease the Mortgaged
Property as or substantially as an entirety to any Person unless (a) such
transaction is on such terms as will fully preserve the lien and security of the
1993 Mortgage and the rights and powers of the 1993 Mortgage Trustee and the
Holders; (b) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or other transfer,
or which leases, the Mortgaged Property as, or substantially as, an entirety is
a corporation organized and existing under the laws of the United States of
America or any State or Territory thereof or the District of Columbia, and such
corporation executes and delivers to the 1993 Mortgage Trustee a supplemental
indenture which contains an assumption by such corporation of the due and
punctual payment of the principal of and premium, if any, and interest, if any,
on the Mortgage Securities and the performance of all of the covenants and
conditions of the Company under the 1993 Mortgage and which contains a grant,
conveyance, transfer and mortgage by such corporation confirming the lien of the
1993 Mortgage on the Mortgaged Property and subjecting to such lien all property
thereafter acquired by such corporation which shall constitute an improvement,
extension or addition to the Mortgaged Property or a renewal, replacement or
substitution of or for any part thereof, and, at the election of such
corporation, subjecting to the lien of the 1993 Mortgage such other property
then owned or thereafter acquired by such corporation as such corporation shall
specify; and (c) in the case of a lease, such lease is made expressly subject to
termination by the Company or by the 1993 Mortgage Trustee at any time during
the continuance of an Event of Default. (See Section 1301.)
MODIFICATION OF 1993 MORTGAGE: Without the consent of any Holders, the
Company and the 1993 Mortgage Trustee may enter into one or more supplemental
indentures for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in the
1993 Mortgage and in the Mortgage Securities; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be outstanding, Mortgage
Securities of one or more specified series, or one or more tranches
thereof, or to surrender any right or power conferred upon the Company by
the 1993 Mortgage; or
(c) to correct or amplify the description of any property at any time
subject to the lien of the 1993 Mortgage; or to better assure, convey and
confirm to the 1993 Mortgage Trustee any property subject or required to be
subjected to the lien of the 1993 Mortgage; or to subject to the lien of
the 1993 Mortgage additional property (including property of others), to
specify any additional Permitted Liens with respect to such additional
property and to modify the provisions in the 1993 Mortgage for dispositions
of certain types of property without release in order to specify any
additional items with respect to such additional property; or
(d) to change or eliminate any provision of the 1993 Mortgage or to
add any new provision to the 1993 Mortgage, provided that if such change,
elimination or addition adversely affects the interests of the Holders of
the Mortgage Securities of any series or tranche in any material respect,
such change, elimination or addition will become effective with respect to
such series or tranche only when no Mortgage Security of such series or
tranche remains outstanding under the 1993 Mortgage; or
(e) to establish the form or terms of the Mortgage Securities of any
series or tranche as permitted by the 1993 Mortgage; or
(f) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration,
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exchange and replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and for any
and all other matters incidental thereto; or
(g) to evidence and provide for the acceptance of appointment by a
successor trustee or by a co-trustee or separate trustee; or
(h) to provide for the procedures required to permit the Company to
use a non-certificated system of registration for all, or any series or
tranche of, the Mortgage Securities; or
(i) to change any place or places where (i) the principal of and
premium, if any, and interest, if any, on all or any series of Mortgage
Securities, or any tranche thereof, will be payable, (ii) all or any series
of Mortgage Securities, or any tranche thereof, may be surrendered for
registration of transfer, (iii) all or any series of Mortgage Securities,
or any tranche thereof, may be surrendered for exchange and (iv) notices
and demands to or upon the Company in respect of all or any series of
Mortgage Securities, or any tranche thereof, and the 1993 Mortgage may be
served; or
(j) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provision
therein, or to make any other changes to the provisions thereof or to add
other provisions with respect to matters and questions arising under the
1993 Mortgage, so long as such other changes or additions do not adversely
affect the interests of the Holders of Mortgage Securities of any series or
tranche in any material respect.
(See Section 1401.)
Without limiting the generality of the foregoing, if the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), is amended after the date
of the Original 1993 Mortgage in such a way as to require changes to the 1993
Mortgage or the incorporation therein of additional provisions or so as to
permit changes to, or the elimination of, provisions which, at the date of the
Original 1993 Mortgage or at any time thereafter, were required by the Trust
Indenture Act to be contained in the 1993 Mortgage, the 1993 Mortgage will be
deemed to have been amended so as to conform to such amendment or to effect such
changes or elimination, and the Company and the 1993 Mortgage Trustee may,
without the consent of any Holders, enter into one or more supplemental
indentures to evidence or effect such amendment. (See Section 1401.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Mortgage Securities of all series
then Outstanding, considered as one class, is required for the purpose of adding
any provisions to, or changing in any manner, or eliminating any of the
provisions of, the 1993 Mortgage pursuant to one or more supplemental
indentures; provided, however, that if less than all of the series of Mortgage
Securities Outstanding are directly affected by a proposed supplemental
indenture, then the consent only of the Holders of a majority in aggregate
principal amount of Outstanding Mortgage Securities of all series so directly
affected, considered as one class, will be required; and provided, further, that
if the Mortgage Securities of any series have been issued in more than one
tranche and if the proposed supplemental indenture directly affects the rights
of the Holders of one or more, but less than all, of such tranches, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Mortgage Securities of all tranches so directly affected, considered
as one class, will be required; and provided, further, that no such amendment or
modification may (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Mortgage Security, or reduce the
principal amount thereof or the rate of interest thereon (or the amount of any
installment of interest thereon), or change the method of calculating such rate,
or reduce any premium payable upon the redemption thereof, or reduce the amount
of the principal of any Discount Security that would be due and payable upon a
declaration of acceleration of Maturity, or change the coin or currency (or
other property) in which any Mortgage Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity of any Mortgage Security (or,
in the case of redemption, on or after the redemption date) without, in
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any such case, the consent of the Holder of such Mortgage Security; (b)
permit the creation of any lien not otherwise permitted by the 1993 Mortgage
ranking prior to the lien of the 1993 Mortgage with respect to all or
substantially all of the Mortgaged Property or terminate the lien of the 1993
Mortgage on all or substantially all of the Mortgaged Property, or deprive
the Holders of the benefit of the lien of the 1993 Mortgage, without, in any
such case, the consent of the Holders of all Mortgage Securities then
Outstanding; (c) reduce the percentage in principal amount of the Outstanding
Mortgage Securities of any series, or any tranche thereof, the consent of the
Holders of which is required for any supplemental indenture, or the consent
of the Holders of which is required for any waiver of compliance with any
provision of the 1993 Mortgage or of any default thereunder and its
consequences, or reduce the requirements for quorum or voting, without, in
any such case, the consent of the Holder of each Outstanding Mortgage
Security of such series or tranche; or (d) modify certain of the provisions
of the 1993 Mortgage relating to supplemental indentures, waivers of certain
covenants and waivers of past defaults with respect to the Mortgage
Securities of any series, or any tranche thereof, without the consent of the
Holder of each Outstanding Mortgage Security of such series or tranche. A
supplemental indenture which changes or eliminates any covenant or other
provision of the 1993 Mortgage which has expressly been included solely for
the benefit of the Holders of, or which is to remain in effect only so long
as there shall be Outstanding Mortgage Securities of one or more specified
series, or one or more tranches thereof, or modifies the rights of the
Holders of Mortgage Securities of such series or tranches with respect to
such covenant or other provision, will be deemed not to affect the rights
under the 1993 Mortgage of the Holders of the Mortgage Securities of any
other series or tranche. (See Section 1402.)
VOTING OF CLASS A BONDS: The 1993 Mortgage provides that the 1993 Mortgage
Trustee will, as holder of Class A Bonds issued under the 1939 Mortgage as the
basis for the issuance of Mortgage Securities, attend such meetings of
bondholders under the related Class A Mortgage, or deliver its proxy in
connection therewith, as relate[s] to matters with respect to which it is
entitled to vote or consent. The 1993 Mortgage provides that, so long as no
Event of Default as defined in the 1993 Mortgage has occurred and is continuing,
the 1993 Mortgage Trustee will, as holder of such Class A Bonds (a) vote in
favor of the amendments and modifications to the 1939 Mortgage described under
"DESCRIPTION OF THE 1939 MORTGAGE -- Voting of Class A Bonds Issued Under the
1939 Mortgage", and (b) with respect to any amendments or modifications to any
Class A Mortgage other than those amendments or modifications referred to in
(a), vote all Class A Bonds Outstanding under such Class A Mortgage then held by
it, or consent with respect thereto, proportionately with the vote or consent of
holders of all other Class A Bonds Outstanding under such Class A Mortgage the
holders of which are eligible to vote or consent, as evidenced by a certificate
delivered by the trustee under such Class A Mortgage; provided, however, that
the 1993 Mortgage Trustee will not vote in favor of, or consent to, any
amendment or modification of a Class A Mortgage which, if it were an amendment
or modification of the 1993 Mortgage, would require the consent of Holders of
Mortgage Securities as described under "Modification of the 1993 Mortgage",
without the prior consent of Holders of Mortgage Securities which would be
required for such an amendment or modification of the 1993 Mortgage. (See
Section 705.)
WAIVER: The Holders of at least a majority in aggregate principal amount
of all Mortgage Securities may waive the Company's obligations to comply with
certain covenants, including the covenants to maintain its corporate existence
and properties, pay taxes and discharge liens, maintain certain insurance and
make such recordings and filings as are necessary to protect the security of the
Holders and the rights of the 1993 Mortgage Trustee and the covenant described
above with respect to merger, consolidation or the transfer or lease of the
Mortgaged Property as, or substantially as, an entirety, provided that such
waiver occurs before the time such compliance is required. The Holders of at
least a majority of the aggregate principal amount of Outstanding Mortgage
Securities of all affected series or tranches, considered as one class, may
waive, before the time for such compliance, compliance with any covenant
specified with respect to Mortgage Securities of such series or tranches. (See
Section 609.)
EVENTS OF DEFAULT: Each of the following events constitutes an Event of
Default under the 1993 Mortgage:
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(a) failure to pay interest on any Mortgage Security within 60 days
after the same becomes due;
(b) failure to pay principal of or premium, if any, on any Mortgage
Security within 3 business days after the Maturity thereof;
(c) failure to perform or breach of any covenant or warranty of the
Company contained in the 1993 Mortgage (other than a covenant or warranty a
default in the performance of which or breach of which is dealt with
elsewhere under this paragraph) for a period of 90 days after there has
been given to the Company by the 1993 Mortgage Trustee, or to the Company
and the 1993 Mortgage Trustee by the Holders of at least 33% in principal
amount of Outstanding Mortgage Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default", unless the 1993 Mortgage Trustee, or the
1993 Mortgage Trustee and the Holders of a principal amount of Mortgage
Securities not less than the principal amount of Mortgage Securities the
Holders of which gave such notice, as the case may be, agree in writing to
an extension of such period prior to its expiration; provided, however,
that the 1993 Mortgage Trustee, or the 1993 Mortgage Trustee and such
Holders, as the case may be, will be deemed to have agreed to an extension
of such period if corrective action has been initiated by the Company
within such period and is being diligently pursued;
(d) certain events relating to reorganization, bankruptcy and
insolvency of the Company or appointment of a receiver or trustee for its
property; and
(e) the occurrence of a matured event of default under any Class A
Mortgage (other than any such matured event of default which is of similar
kind or character to the Event of Default described in (c) above and which
has not resulted in the acceleration of the Class A Bonds Outstanding under
such Class A Mortgage); provided that the waiver or cure of any such event
of default and the rescission and annulment of the consequences thereof
shall constitute a waiver of the corresponding Event of Default under the
1993 Mortgage and a rescission and annulment of the consequences thereof.
(See Section 1001.)
REMEDIES: If an Event of Default occurs and is continuing, then the 1993
Mortgage Trustee or the Holders of not less than 33% in principal amount of
Mortgage Securities then Outstanding may declare the principal amount (or if the
Mortgage Securities are Discount Securities, such portion of the principal
amount of such Discount Securities as may be provided for pursuant to the terms
of the 1993 Mortgage) of all of the Mortgage Securities then Outstanding,
together with premium, if any, and accrued interest, if any, thereon to be
immediately due and payable. At any time after such declaration of acceleration
of the Mortgage Securities then Outstanding, but before the sale of any of the
Mortgaged Property and before a judgment or decree for payment of money shall
have been obtained by the 1993 Mortgage Trustee as provided in the 1993
Mortgage, the Event or Events of Default giving rise to such declaration of
acceleration will, without further act, be deemed to have been waived, and such
declaration and its consequences will, without further act, be deemed to have
been rescinded and annulled, if
(a) the Company has paid or deposited with the 1993 Mortgage Trustee
a sum sufficient to pay:
(i) all overdue interest, if any, on all Mortgage Securities
then Outstanding;
(ii) the principal of and premium, if any, on any Mortgage
Securities then Outstanding which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Mortgage Securities; and
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(iii) all amounts due to the 1993 Mortgage Trustee as
compensation and reimbursement as provided in the 1993 Mortgage; and
(b) any other Event or Events of Default, other than the non-payment
of the principal of Mortgage Securities which shall have become due solely
by such declaration of acceleration, shall have been cured or waived as
provided in the 1993 Mortgage. (See Sections 1002 and 1017.)
The 1993 Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
1993 Mortgage Trustee has the power to take possession of, and to hold, operate
and manage, the Mortgaged Property or, with or without entry, sell the Mortgaged
Property. If the Mortgaged Property is sold, whether by the 1993 Mortgage
Trustee or pursuant to judicial proceedings, the principal of the Outstanding
Mortgage Securities, if not previously due, will become immediately due,
together with premium, if any, and any accrued interest. (See Sections 1003,
1004 and 1005.)
If an Event of Default occurs and is continuing, the Holders of a majority
in principal amount of the Mortgage Securities then Outstanding will have the
right to direct the time, method and place of conducting any proceedings for any
remedy available to the 1993 Mortgage Trustee or exercising any trust or power
conferred on the 1993 Mortgage Trustee, provided that (a) such direction does
not conflict with any rule of law or with the 1993 Mortgage, and could not
involve the 1993 Mortgage Trustee in personal liability in circumstances where
indemnity would not, in the 1993 Mortgage Trustee's sole discretion, be adequate
and (b) the 1993 Mortgage Trustee may take any other action deemed proper by the
1993 Mortgage Trustee which is not inconsistent with such direction. (See
Section 1016.)
The 1993 Mortgage provides that no Holder of any Mortgage Security will
have any right to institute any proceeding, judicial or otherwise, with respect
to the 1993 Mortgage or for the appointment of a receiver or for any other
remedy thereunder unless (a) such Holder has previously given to the 1993
Mortgage Trustee written notice of a continuing Event of Default; (b) the
Holders of not less than a majority in aggregate principal amount of the
Mortgage Securities then Outstanding have made written request to the 1993
Mortgage Trustee to institute proceedings in respect of such Event of Default
and have offered the 1993 Mortgage Trustee reasonable indemnity against costs
and liabilities to be incurred in complying with such request; and (c) for 60
days after receipt of such notice, the 1993 Mortgage Trustee has failed to
institute any such proceeding and no direction inconsistent with such request
has been given to the 1993 Mortgage Trustee during such 60-day period by the
Holders of a majority in aggregate principal amount of Mortgage Securities then
Outstanding. Furthermore, no Holder will be entitled to institute any such
action if and to the extent that such action would disturb or prejudice the
rights of other Holders. (See Section 1011.) Notwithstanding that the right of
a Holder to institute a proceeding with respect to the 1993 Mortgage is subject
to certain conditions precedent, each Holder of a Mortgage Security has the
right, which is absolute and unconditional, to receive payment of the principal
of and premium, if any, and interest, if any, on such Mortgage Security when due
and to institute suit for the enforcement of any such payment, and such rights
may not be impaired without the consent of such Holder. (See Section 1012.)
The 1993 Mortgage provides that the 1993 Mortgage Trustee give the Holders
notice of any default under the 1993 Mortgage to the extent required by the
Trust Indenture Act, unless such default shall have been cured or waived, except
that no such notice to Holders of a default of the character described in clause
(c) under "Events of Default" may be given until at least 75 days after the
occurrence thereof. For purposes of the preceding sentence, the term "default"
means any event which is, or after notice or lapse of time, or both, would
become, an Event of Default. (See Section 1102.) The Trust Indenture Act
currently permits the 1993 Mortgage Trustee to withhold notices of default
(except for certain payment defaults) if the 1993 Mortgage Trustee in good faith
determines the withholding of such notice to be in the interests of the Holders.
As a condition precedent to certain actions by the 1993 Mortgage Trustee in
the enforcement of the lien of the 1993 Mortgage and institution of action on
the Mortgage Securities, the 1993 Mortgage Trustee
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may require adequate indemnity against costs, expenses and liabilities to be
incurred in connection therewith. (See Sections 1011 and 1101.)
In addition to every other right and remedy provided in the 1993 Mortgage,
the 1993 Mortgage Trustee may exercise any right or remedy available to the 1993
Mortgage Trustee in its capacity as owner and holder of Class A Bonds which
arises as a result of a default or matured event of default under any Class A
Mortgage, whether or not an Event of Default under the 1993 Mortgage has
occurred and is continuing. (See Section 1020.)
DEFEASANCE: Any Mortgage Security or Securities, or any portion of the
principal amount thereof, will be deemed to have been paid for purposes of the
1993 Mortgage, and, at the Company's election, the entire indebtedness of the
Company in respect thereof will be deemed to have been satisfied and discharged,
if there has been irrevocably deposited with the 1993 Mortgage Trustee or any
Paying Agent (other than the Company), in trust: (a) money (including Funded
Cash not otherwise applied pursuant to the 1993 Mortgage) in an amount which
will be sufficient, or (b) Eligible Obligations (as described below), which do
not contain provisions permitting the redemption or other prepayment thereof at
the option of the issuer thereof, the principal of and the interest on which
when due, without any regard to reinvestment thereof, will provide moneys which,
together with the money, if any, deposited with or held by the 1993 Mortgage
Trustee or such Paying Agent, will be sufficient, or (c) a combination of (a)
and (b) which will be sufficient, to pay when due the principal of and premium,
if any, and interest, if any, due and to become due on such Mortgage Security or
Securities or portions thereof. (See Section 901.) For this purpose, Eligible
Obligations include direct obligations of, or obligations unconditionally
guaranteed by, the United States of America, entitled to the benefit of the full
faith and credit thereof, and certificates, depository receipts or other
instruments which evidence a direct ownership interest in such obligations or in
any specific interest or principal payments due in respect thereof.
It is possible that for federal income tax purposes any deposit
contemplated in the preceding paragraph could be treated as a taxable exchange
of the related Mortgage Securities for an issue of obligations of the trust or a
direct interest in the cash and securities held in the trust. In that case,
Holders of such Mortgage Securities would recognize gain or loss as if the trust
obligations or the cash or securities deposited, as the case may be, had
actually been received by them in exchange for their Mortgage Securities. Such
gain or loss, generally, would be capital in nature to Holders for whom the
Mortgage Securities are held as capital assets and any deductions for losses
would be subject to certain limitations. Such Holders thereafter would be
required to include in income a share of the income, gain or loss of the trust
or the income from the securities held in trust, as the case may be. The amount
so required to be included in income could be different from the amount that
would be includible in the absence of such deposit. Prospective investors are
urged to consult their own tax advisors as to the specific consequences to them
of such deposit.
RESIGNATION OF THE 1993 MORTGAGE TRUSTEE: The 1993 Mortgage Trustee may
resign at any time by giving written notice thereof to the Company or may be
removed at any time by Act of the Holders of a majority in principal amount of
Mortgage Securities then Outstanding delivered to the 1993 Mortgage Trustee and
the Company. No resignation or removal of the 1993 Mortgage Trustee and no
appointment of a successor 1993 Mortgage Trustee will become effective until the
acceptance of appointment by a successor 1993 Mortgage Trustee in accordance
with the requirements of the 1993 Mortgage. So long as no Event of Default or
event which, after notice or lapse of time, or both, would become an Event of
Default has occurred and is continuing, if the Company has delivered to the 1993
Mortgage Trustee a resolution of its Board of Directors appointing a successor
1993 Mortgage Trustee and such successor has accepted such appointment in
accordance with the terms of the 1993 Mortgage, the 1993 Mortgage Trustee will
be deemed to have resigned and the successor will be deemed to have been
appointed as 1993 Mortgage Trustee in accordance with the 1993 Mortgage. (See
Section 1110.)
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EVIDENCE TO BE FURNISHED TO THE 1993 MORTGAGE TRUSTEE: Compliance with
1993 Mortgage provisions is evidenced by written statements of Company officers
or persons selected or paid by the Company. In certain cases, opinions of
counsel and certification of an engineer, accountant, appraiser or other expert
(who in some cases must be independent) must be furnished. In addition, the
1993 Mortgage requires that the Company give the 1993 Mortgage Trustee, not less
often than annually, a brief statement as to the Company's compliance with the
conditions and covenants under the 1993 Mortgage.
CONCERNING THE 1993 MORTGAGE TRUSTEE: The Company conducts banking
transactions with affiliates of the 1993 Mortgage Trustee in the normal course
of the Company's business and uses the 1993 Mortgage Trustee or its affiliates
as trustee for various debt issues.
DESCRIPTION OF THE 1939 MORTGAGE
GENERAL: The summaries under this heading do not purport to be complete
and are subject to the detailed provisions of the 1939 Mortgage. Capitalized
terms used under this heading which are not otherwise defined hereunder shall
have the meanings ascribed thereto in the 1939 Mortgage. Wherever particular
provisions or terms defined therein are referred to, such provisions or
definitions are incorporated by reference as part of the statements made herein
and such statements are qualified in their entirety by such reference.
References to article and section numbers herein, unless otherwise indicated,
are references to article and section numbers of the Original 1939 Mortgage.
SECURITY: Class A Bonds issued under the 1939 Mortgage will rank PARI
PASSU, except as to any sinking fund or similar fund provided for a particular
series, with all bonds at any time outstanding under the 1939 Mortgage. In the
opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., based on information obtained
from public records and from the Company, the 1939 Mortgage constitutes a first
mortgage lien on the property specifically or generally described therein as
subject to the lien thereof, except such property as may have been disposed of
or released from the lien thereof in accordance with the terms thereof, subject
to no liens prior to the lien of the 1939 Mortgage other than Permitted
Encumbrances, as defined therein; and the 1939 Mortgage by its terms effectively
subjects to the lien thereof all property (except property of the kinds
specifically excepted from the lien thereof) acquired by the Company after the
date of the execution and delivery thereof, subject to Permitted Encumbrances,
to any lien thereon existing, and to any liens for unpaid portions of the
purchase money placed thereon, at the time of such acquisition, and also subject
to certain limitations in the case of consolidation, merger or sale of
substantially all the mortgaged property. The principal properties subject to
the lien of the 1939 Mortgage are the electric and gas properties owned by the
Company and securities of certain subsidiaries. (See Granting and Habendum
Clauses, Sections 2 and 3 of Article I, and Section 3 of Article XI of the 1939
Mortgage.)
The 1939 Mortgage provides that the 1939 Mortgage Trustee shall have a lien
prior to the bonds on the mortgaged property for payment of its compensation,
expenses and disbursements and for indemnity against certain liabilities. (See
Section 10 of Article XII of the 1939 Mortgage.)
ISSUANCE OF ADDITIONAL BONDS UNDER THE 1939 MORTGAGE: Additional bonds may
be issued under the 1939 Mortgage in a principal amount equal to (a) 60% of net
property additions (as defined in the 1939 Mortgage) acquired or constructed
within five years of certification to the 1939 Mortgage Trustee, (b) the
principal amount of certain retired bonds or prior lien bonds or (c) deposited
cash (in certain cases 60% thereof). See "Voting of Class A Bonds Issued Under
the 1939 Mortgage".
No bonds may be issued under the 1939 Mortgage, as provided in clauses
(a) and (c) above, unless the net earnings of the Company (as defined in
Section 5 of Article I of the 1939 Mortgage and as discussed below) are at
least 2 1/2 times the annual interest on all bonds issued and outstanding
under the 1939 Mortgage, including the bonds applied for (but excluding any
bonds to be paid, retired or redeemed with the proceeds of the bonds applied
for), and indebtedness secured by prior liens. Such net earnings test
generally need not be
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satisfied prior to the issuance of bonds as provided in clause (b) above
unless (x) the new bonds are issued more than two years prior to the stated
maturity of the retired bonds and the new bonds bear a greater rate of
interest than the retired bonds or (y) the new bonds are issued in respect of
retired bonds, the interest charges on which have been excluded from any net
earnings certificate filed with the 1939 Mortgage Trustee since the
retirement of such bonds. (See Article III of the 1939 Mortgage.) See
"Voting of Class A Bonds Issued Under the 1939 Mortgage".
Cash deposited under clause (c) above may be withdrawn by the Company in an
amount equal to the principal amounts of bonds issuable pursuant to clauses (a)
and (b) above (in certain cases 166-2/3% thereof) without regard to earnings or
may be applied to the purchase or redemption of bonds of one or more series
selected by the Company. (See Sections 8, 9 and 10 of Article III of the 1939
Mortgage.) See "Voting of Class A Bonds Issued Under the 1939 Mortgage".
Net earnings are computed before provision for depreciation and
amortization of property, income and profits taxes (as defined in the 1939
Mortgage), interest on any indebtedness and amortization of debt discount and
expense and do not take into account any profits or losses from the sale or
disposal of capital assets or securities. (See Section 5 of Article I of the
1939 Mortgage.)
Property additions under the 1939 Mortgage consist of property used or
useful in the electric, gas or steam business (with certain exceptions) acquired
or constructed by the Company within five years next preceding the certification
thereof to the 1939 Mortgage Trustee. (See Section 4 of Article I of the 1939
Mortgage.) See "Voting of Class A Bonds Issued Under the 1939 Mortgage".
The approximate amount of net property additions as of December 31, 1997,
and the amount of retired bonds as of December 31, 1997, available for use as
the basis for the issuance of Class A Bonds under the 1939 Mortgage, subject to
the net earnings restrictions discussed above, were $758,333,879 and
$669,480,000, respectively. The Company will determine, at the time of each
issuance of Class A Bonds under the 1939 Mortgage which are to be the basis for
the issuance of New Bonds, whether such Class A Bonds will be issued upon the
basis of property additions or retired bonds. As of December 31, 1997,
$1,424,417,000 in aggregate principal amount of bonds were outstanding under the
1939 Mortgage, $822,167,000 aggregate principal amount of which was held by the
1993 Mortgage Trustee as security for outstanding Mortgage Securities under the
1993 Mortgage.
The 1939 Mortgage contains restrictions on (a) the acquisition of property
securing prior lien indebtedness in excess of 60% of the fair value of the
property and (b) the issuance of bonds, withdrawal of cash or release of
property on the basis of property subject to a prior lien. Prior lien
indebtedness secured by property theretofore acquired may not be increased
unless the evidence thereof is pledged with the 1939 Mortgage Trustee. (See
Section 4 of Article I and Sections 15, 17 and 19 of Article IV of the 1939
Mortgage.) See "Voting of Class A Bonds Issued Under the 1939 Mortgage".
MAINTENANCE AND REPLACEMENT FUND FOR BONDS OUTSTANDING UNDER THE 1939
MORTGAGE: Although there will be no provision for a maintenance and replacement
fund with respect to Class A Bonds issued under the 1939 Mortgage as the basis
for the issuance of New Bonds, the Company has covenanted, with respect to
various series of outstanding bonds issued under the 1939 Mortgage maturing
through July 1, 1998, that, so long as any bond of such series remains
outstanding, the Company will, for each calendar year (herein called the
"accounting period"), pay to the 1939 Mortgage Trustee, as a Maintenance and
Replacement fund, an amount in cash not less than the sum of 15% of the gross
electric operating revenues and 10% of the gross gas and steam operating
revenues (as defined in the 1939 Mortgage, which, among other things, provides
for the deduction therefrom the cost of purchased electric current, gas and
steam) derived from the mortgaged property during the accounting period, LESS,
HOWEVER, the following optional credits: (a) expenditures during the accounting
period for repairs and maintenance of the mortgaged property; (b) the cost of
property additions during the accounting period deemed to renew or replace
retired or abandoned property, subject to adjustment
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for any outstanding prior lien bonds secured by such property additions; (c)
the principal amount of all bonds and/or 166-2/3% of the principal amount of
all prior lien bonds, retired or redeemed and for which no bonds have been
issued, credit taken or cash withdrawn under the 1939 Mortgage; and (d) net
property additions to the extent of 100% thereof. Cash so deposited may be
applied to the purchase or redemption of such bonds as the Company may
designate, which by their terms are redeemable prior to maturity (including
any of the Class A Bonds issued under the 1939 Mortgage that are so
redeemable and that were issued as the basis for the issuance of Bonds) at a
price not exceeding the then current redemption price as set forth in the
relevant supplemental indenture and the accrued interest on such bonds, or
may be withdrawn upon the basis of certain property additions or certain
retired bonds or prior lien bonds. (See Section 8 of Article IV of the 1939
Mortgage and Article Two of certain supplemental indentures.) See "Voting of
Class A Bonds Issued Under the 1939 Mortgage".
The series of outstanding bonds which contain maintenance and replacement
fund covenants mature through July 1, 1998, but may be redeemed prior to their
stated maturity. The Company does not anticipate issuing any additional series
of bonds under the 1939 Mortgage which will contain such covenants. The Company
will no longer be bound by such covenants after all the bonds of such series
have been retired.
MODIFICATION OF THE 1939 MORTGAGE: The 1939 Mortgage and the rights of
bondholders thereunder may be modified with the consent of the Company, and of
the 1939 Mortgage Trustee if deemed affected, and the consent of the holders of
not less than 75% in principal amount of the bonds then outstanding, or of not
less than 75% in principal amount of the outstanding bonds of any one or more
series which may be affected by any such modification; except that the
bondholders, without the consent of the holder of each bond affected, have no
power to (a) extend the time of payment of the principal of or interest on any
bonds; (b) reduce the principal amount thereof or the rate of interest thereon,
or otherwise modify the terms of payment of principal or interest; (c) permit
the creation of any lien ranking prior to or on a parity with the lien of the
1939 Mortgage with respect to any of the mortgaged property; (d) deprive any
nonassenting bondholder of a lien upon the mortgaged property for the security
of his/her bonds; or (e) reduce the percentage of bondholders authorized to take
such action. (See Article XIV of the 1939 Mortgage.) The Company has reserved
the right to amend the 1939 Mortgage without any consent or other action by
holders of any series of bonds created after October 31, 1975 (including Class A
Bonds issued under the 1939 Mortgage as the basis for the issuance of New Bonds)
to reduce the required consent of bondholders described above from 75% to 60%.
(See Article Five of the Supplemental Indenture dated as of November 1, 1977.)
VOTING OF CLASS A BONDS ISSUED UNDER THE 1939 MORTGAGE: The 1993 Mortgage
provides that, so long as no Event of Default as defined in the 1993 Mortgage
has occurred and is continuing thereunder, the 1993 Mortgage Trustee will, as
holder of Class A Bonds issued under the 1939 Mortgage and delivered as the
basis for the issuance of Bonds,
(a) vote or consent in favor of amendments or modifications to the
1939 Mortgage of substantially the same tenor and effect as follows:
(i) to expand the definition of property additions to
eliminate geographical restrictions to certain states and allow the
inclusion of properties located anywhere in the United States, Canada
and Mexico, or their coastal waters; to include space satellites and
stations, solar power satellites and other analogous facilities; to
include nuclear fuel and other analogous devices or substances and to
establish other provisions as to such fuel; to include properties
located on leased real property, subject to certain limitations; to
include goodwill when acquired with a public utility system, subject
to certain limitations; and to delete the requirement that property
additions must have been acquired or constructed within five years;
(ii) to remove the requirement that certificates delivered to
the 1939 Mortgage Trustee be verified;
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(iii) to liberalize the requirements for publication of notices
of redemption and other notices;
(iv) to eliminate the maintenance and replacement fund or, in
the alternative,
(A) to change the amount of cash deliverable to the 1939
Mortgage Trustee to the lower of (x) 10% of the combined
electric, gas and steam gross operating revenues of the
Company or (y) 2% of the cost of the depreciable property
of the Company, less the accumulated provision for
depreciation; and
(B) to change the definition of gross operating revenues
to deduct the cost of fuel used to provide electric, gas
and steam services;
(v) to change the opinion of counsel required to be delivered
upon the certification of property additions to delete the requirement
that the Company have all necessary permission from governmental
authorities to use and operate such property additions;
(vi) to specifically allow the inclusion of earnings collected
subject to refund in net earnings for purposes of the interest
coverage requirement for the issuance of bonds;
(vii) to specifically permit the debt component, in addition to
the equity component, of the allowance for funds used during
construction to be included in net earnings for purposes of the
interest coverage requirement for the issuance of bonds;
(viii) (A) to reduce the interest coverage requirement for the
issuance of bonds to 2 times from 2 1/2 times annual
interest charges on outstanding bonds, including bonds
applied for, and prior lien indebtedness; or, in the
alternative,
(B) to change such coverage requirement to a requirement
that net earnings be at least equal to either (x) 2 (or
any higher amount) times annual interest charges on, or
(y) 15% (or any higher percentage) of the aggregate
principal amount of, outstanding bonds, including the
bonds applied for, and prior lien indebtedness;
(ix) to remove the restrictions on acquiring property subject
to a prior lien (retaining, however, the restrictions on certifying
such property as property additions);
(x) to raise the minimum dollar amount of fire and other
losses that must be payable to the 1939 Mortgage Trustee from $50,000
to 3% (or any higher percentage) of the principal amount of
outstanding bonds; and to specifically permit the Company to carry
insurance policies with deductible provisions equal to 3% (or any
higher percentage) of the principal amount of outstanding bonds or any
higher deductible amount usually contained in the policies of other
companies owning and operating similar properties;
(xi) to delete the covenant of the Company to "observe and
conform to all valid requirements of any governmental authority
relative to any of the mortgaged property";
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(xii) to delete the requirement that the 1939 Mortgage Trustee
be located in New York, New York and that the Company maintain an
office in New York, New York, to make payments on bonds and register
transfers thereof;
(xiii) to modify the special release provision of the 1939
Mortgage to increase the amount of the aggregate value of property
which may be released from the lien of the 1939 Mortgage within any
period of 12 consecutive calendar months without compliance with all
the conditions of the general release provision from $25,000 to (A)
the greater of $25,000 or 1% of the aggregate principal amount of
outstanding bonds or (B) the greater of $10,000,000 or 3% of the
aggregate principal amount of outstanding bonds (or any lower amount
or percentage);
(xiv) to permit bonds to be issued under the 1939 Mortgage in a
principal amount equal to 70% of net property additions instead of 60%
and to make correlative changes in provisions relating to, among other
things, the release of property from the lien of the 1939 Mortgage,
the withdrawal of cash held by the 1939 Mortgage Trustee, the
acquisition and use under the 1939 Mortgage of property securing prior
lien indebtedness, and the use of retired prior lien bonds; and
(xv) to modify the definition of all defaults under the 1939
Mortgage to be substantially identical to the Events of Default under
the 1993 Mortgage; and
(b) with respect to any amendments or modifications to the 1939
Mortgage other than those referred to in (a) above, vote all Class A Bonds
Outstanding under the 1939 Mortgage then held by it, or consent with
respect thereto, in the manner as described under "DESCRIPTION OF THE BONDS
-- Voting of Class A Bonds". (See Section 705 of the 1993 Mortgage.)
The Company has reserved the right to make any or all of the modifications
to the 1939 Mortgage described in (a)(i) through (a)(xiii)(A) above without
consent or other action of the holders of certain outstanding series of bonds
previously issued under the 1939 Mortgage. (See Article Three of the
Supplemental Indenture dated as of March 1, 1980 and Article Four of the
Supplemental Indentures dated as of July 1, 1990, December 1, 1990, and March 1,
1992, respectively). In addition, the indentures under which certain pollution
control revenue bonds of Morgan County, Colorado and Adams County, Colorado
were issued provide that the trustees thereunder, as holders of bonds issued
under the 1939 Mortgage, shall vote in favor of, or consent with respect to,
any or all of the possible modifications described in (a)(i) through
(a)(xiii)(A) above. The aggregate principal amount of bonds with respect to
which such right has been reserved or with respect to which such agreements
to consent have been obtained, together with the bonds held by the 1993
Mortgage Trustee, exceeds the 75% in aggregate principal amount of
outstanding bonds required to approve such modifications, and therefore the
Company may effect such modifications at its discretion upon the taking of
appropriate corporate action as required by the 1939 Indenture.
DEFAULT UNDER THE 1939 MORTGAGE: An event of default under the 1939
Mortgage includes a failure to pay interest on any bond, or to pay a sinking
fund installment, for 60 days after such payment becomes due, a failure to pay
the principal of or premium, if any, on any bond when the same becomes due, a
default with respect to the payment of principal of or interest on any prior
lien bonds, a failure to perform any other covenant in the 1939 Mortgage for 90
days after notice given to the Company by the 1939 Mortgage Trustee or by the
holders of 10% in principal amount of outstanding bonds, certain events in
bankruptcy, and an Event of Default under the 1993 Mortgage and/or certain
matured events of default under any other Class A Mortgage. (See Section 1 of
Article VIII of the 1939 Mortgage and Article Five of the Supplemental Indenture
dated as of November 1, 1993 creating the First Mortgage Bonds, Collateral
Series A.) The 1939 Mortgage Trustee may withhold notice of default (except
default in the payment of principal of or premium, if any, or interest on the
bonds or in the payment of a sinking fund installment) if it determines such
withholding to be in the interests of the bondholders. (See Section 2 of
Article VIII of the 1939 Mortgage.) The Company is required to report
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annually to the 1939 Mortgage Trustee as to compliance with the covenants
contained in the 1939 Mortgage. (See Section 24 of Article IV of the 1939
Mortgage.)
Upon the occurrence of a default under the 1939 Mortgage, the 1939 Mortgage
Trustee or the holders of 25% in principal amount of outstanding bonds may
declare the principal of and interest accrued on all outstanding bonds due and
payable immediately; PROVIDED, HOWEVER, that if such default has been cured, (a)
the holders of a majority in principal amount of outstanding bonds may annul
such declaration or (b) if, in making such declaration, the 1939 Mortgage
Trustee shall have acted without a direction from the holders of a majority in
principal amount of outstanding bonds, or if such declaration was made by the
holders of 25% in principal amount of outstanding bonds and the holders of a
majority in principal amount of outstanding bonds shall not have theretofore
delivered a written notice to the contrary, then such declaration shall IPSO
FACTO be deemed to be annulled. (See Section 1 of Article VIII of the 1939
Mortgage.)
ACTION BY 1939 MORTGAGE TRUSTEE: Except as otherwise provided in the 1939
Mortgage, the holders of a majority in principal amount of bonds outstanding
under the 1939 Mortgage have the right to require the 1939 Mortgage Trustee to
enforce the lien of the 1939 Mortgage and direct the time, method and place of
conducting any proceedings for any remedy available to the 1939 Mortgage Trustee
under the 1939 Mortgage. (See Section 15 of Article VIII of the 1939 Mortgage.)
No holder of bonds outstanding under the 1939 Mortgage has the right to enforce
the lien of the 1939 Mortgage without giving to the 1939 Mortgage Trustee
written notice of default and unless the holders of a majority in principal
amount of outstanding bonds shall have requested the 1939 Mortgage Trustee to
act and have offered the 1939 Mortgage Trustee security and indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred
thereby and the 1939 Mortgage Trustee shall have failed to take action within 60
days. (See Section 16 of Article VIII of the 1939 Mortgage.)
CONCERNING THE 1939 MORTGAGE TRUSTEE: The Company conducts banking
transactions with affiliates of the 1939 Mortgage Trustee in the normal course
of the Company's business and uses the 1939 Mortgage Trustee or its affiliates
as trustee for various debt issues.
DESCRIPTION OF THE DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series
and will constitute either Senior Debt Securities or Subordinated Debt
Securities. The Debt Securities will be unsecured obligations of the Company.
The Senior Debt Securities and the Subordinated Debt Securities will be issued
under separate indentures although the description of the Indentures herein
applies to both Indentures unless specifically stated otherwise. The Senior
Debt Securities will be issued under an Indenture (the "Senior Debt Securities
Indenture"), between the Company and The Bank of New York, as trustee (the
"Senior Debt Securities Trustee"). The Subordinated Debt Securities will be
issued under an Indenture (the "Subordinated Debt Securities Indenture"),
between the Company and The Bank of New York, as trustee (the "Subordinated Debt
Securities Trustee"). The Indentures are subject to being qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). A form of
each of the Indentures is filed as an exhibit to the Registration Statement of
which this Prospectus is a part.
The Senior Debt Securities Indenture and the Subordinated Debt Securities
Indenture are referred to herein individually as an "Indenture" and,
collectively, as the "Indentures", and the Senior Debt Securities Trustee and
the Subordinated Debt Securities Trustee are referred to herein as the
"Indenture Trustee".
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The following summaries of certain provisions of the Debt Securities and
the Indentures do not purport to be complete and are subject to, and are
qualified in their entirety by the detailed provisions of the Indentures,
including the definitions therein of certain terms. Certain capitalized terms
used under this heading which are not otherwise defined hereunder shall have the
meanings ascribed thereto in the Indentures. Whenever particular provisions of
the Indentures or terms defined therein are referred to, such provisions or
definitions are incorporated by reference as part of the statements made herein
and such statements are qualified in their entirety by such reference.
References to article and section numbers herein, unless otherwise indicated,
are references to article and section numbers of the Indentures.
GENERAL: The Debt Securities will be unsecured obligations of the Company.
The Indentures do not limit the aggregate principal amount of Debt Securities
which may be issued thereunder, nor do they limit the incurrence or issuance of
other secured or unsecured debt of the Company. Debt Securities may be issued
under the Indentures, from time to time, in one or more series. (See Section
301.)
The Debt Securities will rank PARI PASSU in right of payment with all
other unsecured indebtedness of the Company, except that the Senior Debt
Securities will be senior in right of payment to any subordinated
indebtedness which, by its terms, is subordinate to the Senior Debt
Securities, including the Subordinated Debt Securities.
Reference is made to the Prospectus Supplement relating to the Debt
Securities being offered (the "Offered Debt Securities") for, among other
things, the following terms thereof: (i) the title of the Offered Debt
Securities; (ii) any limit on the aggregate principal amount of the Offered
Debt Securities; (iii) whether or not the Debt Securities will be issued in
global form and the terms thereof and the depository therefor; (iv) the date
or dates on which the Offered Debt Securities will mature; (v) the rate or
rates (which may be fixed or variable) per annum at which the Offered Debt
Securities will bear interest or the method by which such rate or rates shall
be determined and the date or dates from which such interest will accrue, the
date or dates on which such interest will be payable and the Regular Record
Dates for such Interest Payment Dates or the method by which such date or
dates shall be determined; (vi) the place or places where the principal of
(and premium, if any) on the Offered Debt Securities shall be payable; (vii)
the right of the Company, if any, to defer payment of interest on the
Subordinated Debt Securities and the maximum length of any such deferral
period; (viii) the date, if any, after which, and the price or prices at
which, the Offered Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the Holder thereof
and other detailed terms and provisions of any such optional redemption; (ix)
the date or dates, if any, on which, and the price or prices at which the
Company is obligated, pursuant to any mandatory sinking fund provisions or
otherwise, to redeem the Offered Debt Securities and other detailed terms and
provisions of such mandatory redemption; (x) the denominations in which the
Offered Debt Securities will be issued, if other than denominations of $1,000
and any integral multiple thereof; (xi) the portion of the principal amount
of the Offered Debt Securities, if other than the principal amount thereof,
which will be payable upon declaration of acceleration of the maturity
thereof; (xii) additional Events of Default with respect to the Offered Debt
Securities, if any, other than those set forth in the appropriate Indenture;
(xiii) whether the provisions of the appropriate Indenture relating to
Defeasance and Covenant Defeasance shall be applicable to the Offered Debt
Securities; (xiv) the currency or currencies or units based on or related to
currencies in which the Offered Debt Securities shall be denominated, and in
which payments or principal of, and any premium and interest on such Offered
Debt Securities will be payable, if other than U.S. dollars; (xv) additional
covenants, if any, with respect to the Offered Debt Securities other than
those set forth in the appropriate Indenture; (xvi) the identity of the
Registrar or any Paying Agent, if other than the Trustee; (xvii) any
exceptions to provisions in the appropriate Indenture relating to legal
holidays or the definition of "Business Day" with respect to the Offered Debt
Securities; and (xviii) any other terms of the Offered Debt Securities (which
terms shall not be inconsistent with the appropriate Indenture). For a
description of the terms of the Offered Debt Securities, reference must be
made to both the Prospectus Supplement relating thereto and to the
description of Debt Securities set forth herein. (See Section 301.)
The Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
principal amount. Special federal income tax, accounting
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and other considerations applicable to any such Original Issue Discount
Securities will be described in any Prospectus Supplement relating thereto.
"Original Issue Discount Security" means any security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof as a result of the
occurrence of an Event of Default and the continuation thereof. (See
Section 101.)
Debt Securities of any series may be offered in a Periodic Offering, in
which any or all of the specific terms of each Security of such series may vary
from other Securities of such series, including with respect to rate or rates of
interest, if any, thereon, the Stated Maturity or Maturities thereof, the
redemption provisions, if any, and such other terms as may be permitted by the
Indenture and determined by the Company from time to time as provided in the
Indentures.
CONSOLIDATION, MERGER OR SALE BY THE COMPANY: Each Indenture provides that
the Company shall not consolidate with, merge with or into any other corporation
(whether or not the Company shall be the surviving corporation), or sell,
assign, transfer or lease all or substantially all of its properties and assets
as an entirety or substantially as an entirety to any Person or group of
affiliated Persons, in one transaction or a series of related transactions,
unless: (i) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or with which or into which
the Company is merged or the Person (or group of affiliated Persons) to which
all or substantially all the properties and assets of the Company are sold,
assigned, transferred or leased is a corporation (or constitute corporations)
organized under the laws of the United States or any State thereof or the
District of Columbia and expressly assumes, by an indenture supplemental to the
Indenture, all the obligations of the Company under the Debt Securities issued
thereunder and the Indenture, executed and delivered to the Indenture Trustee in
form satisfactory to the Indenture Trustee; (ii) immediately before and after
giving effect to such transaction or series of transactions, no Event of
Default, and no Default, shall have occurred and be continuing; and (iii) the
Company shall have delivered to the Indenture Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indentures comply with the Indenture and such
other conditions as may be established in connection with the issuance of the
applicable Debt Securities. (See Article Eight.)
EVENTS OF DEFAULT AND NOTICE THEREOF: The following are Events of
Default under the Indentures with respect to Debt Securities of any series
issued thereunder: (i) failure by the Company to pay interest on any Debt
Security of that series when due and such failure continues for 30 days and
the time for payment has not been extended or deferred; (ii) failure by the
Company to pay the principal of (or premium, if any, on) any Debt Security of
that series when due and payable at Maturity, including upon redemption but
excluding any failure by the Company to deposit money in connection with any
redemption at the option of the Company, and the time for payment has not
been extended or deferred; (iii) failure by the Company to observe or perform
any other covenant, warranty or agreement contained in the Debt Securities of
that series or in the Indenture (other than a covenant, agreement or warranty
included in the Indenture solely for the benefit of Debt Securities other
than that series), and such failure continues for a period of 60 days after
notice has been received by the Company from the Indenture Trustee or Holders
of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series; (iv) certain events of bankruptcy, insolvency or
reorganization relating to the Company; (v) failure by the Company to pay
interest on any series of Debt Security issued under the Indenture and such
failure continues for 30 days, or failure to pay the principal of or premium,
if any, on any series of Debt Security issued under the Indenture when the
same shall become due and payable at Maturity (including upon redemption but
excluding any failure by the Company to deposit money in connection with any
redemption at the option of the Company) and the time for payment of such
interest or principal shall not have been extended or deferred; and (vi) any
other Event of Default with respect to Debt Securities of that series
specified in the Prospectus Supplement relating thereto or Supplemental
Indenture under which such series of Debt Securities is issued. (See Section
501.)
The Indentures provide that the Trustee thereunder shall, within 30 days
after the occurrence of any Default or Event of Default with respect to Debt
Securities of any series issued thereunder, give the Holders of
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Debt Securities of that series notice of all uncured Defaults or Events of
Default known to it (the term "Default" includes any event which after notice
or passage of time or both would be an Event of Default); provided, however,
that, except in the case of an Event of Default or a Default in payment on
any Debt Securities of any series, the Indenture Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or directors or Responsible Officers of the Indenture
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of Debt Securities of the affected series. (See
Section 602.)
If an Event of Default with respect to Debt Securities of any series (other
than due to events of bankruptcy, insolvency or reorganization) occurs and is
continuing, the Indenture Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Debt Securities of that series, by notice in
writing to the Company (and to the Indenture Trustee if given by the Holders of
at least 25% in aggregate principal amount of the Debt Securities of that
series), may declare the unpaid principal of and accrued interest, if any, to
the date of acceleration (or, if the Debt Securities are Original Issue Discount
Securities, such portion of that principal as may be specified in the terms
thereof) on all the Outstanding Debt Securities of that series to be due and
payable immediately and, upon any such declaration, the Debt Securities of that
series shall become immediately due and payable. (See Section 502.)
If an Event of Default occurs due to bankruptcy, insolvency or
reorganization, all unpaid principal of and accrued interest on the Outstanding
Debt Securities of all series will become immediately due and payable without
any declaration or other act on the part of the Indenture Trustee or any Holder
of any Debt Security. (See Section 502.)
Any such declaration with respect to Debt Securities of any series may be
annulled and past Events of Default and Defaults (except, unless theretofore
cured, an Event of Default or a Default in payment of principal of or interest
on the Debt Securities of that series) may be waived by the Holders of a
majority of the principal amount of the Outstanding Debt Securities of that
series, upon the conditions provided in the Indenture. (See Section 513.)
If the Subordinated Debt Securities of any series are then held by a
statutory trust created by the Company for the purpose of issuing preferred
securities and common securities and purchasing a series of Subordinated Debt
Securities with the proceeds thereof, each holder of the preferred securities of
the trust may bring suit directly against the Company for the enforcement of
payment to such holder in respect of the Subordinated Debt Securities of such
series held by the trust in a principal amount equal to the aggregate
liquidation amount of the preferred securities held by such holder. The
holders of at least a majority in aggregate liquidation amount of preferred
securities of the trust must consent to any waiver of an Event of Default with
respect to the series of Subordinated Debt Securities held by the trust and
each such holder must consent to any supplemental indenture that would
adversely affect the interests of such holders. (See Sections 502, 508, 513
and 902.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in the event an Event of Default shall occur and be continuing, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable indemnity. (See Section
603.) The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series; provided that (i) such direction is not in conflict
with any law or the Indenture; (ii) the Indenture Trustee may take any other
action deemed proper by the Indenture Trustee which is not inconsistent with
such direction; and (iii) subject to its duties under the Trust Indenture Act,
the Indenture Trustee need not take any action that might involve the Indenture
Trustee in personal liability or might be unduly prejudicial to the Holders not
joining therein. (See Section 512.)
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No Holder of the Debt Securities of any series will have any right to
institute any proceeding with respect to the Indenture, or for the appointment
of a receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt Securities
of that series have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. However, such
limitations do not apply to a suit instituted by a Holder of a Debt Security for
the enforcement of payment of the principal of or any premium or interest on
such Debt Security on or after the applicable due date specified in such Debt
Security. (See Sections 507 and 508.)
The Indentures provide that the Company shall periodically file statements
with the Indenture Trustee regarding compliance by the Company with certain of
the covenants therein and shall specify any Event of Default or Defaults with
respect to Debt Securities of any series outstanding thereunder, in performing
such covenants, of which the signers may have knowledge. (See Section 704.)
MODIFICATION OF INDENTURES; WAIVER: The Indentures may be modified by the
Company and the applicable Indenture Trustee without the consent of any Holders
with respect to certain matters, including (i) to cure any ambiguity, defect or
inconsistency or to correct or supplement any provision which may be
inconsistent with any other provision of the Indenture and (ii) to make any
change that does not materially adversely affect the interests of any Holder of
Debt Securities of any series. In addition, under the Indentures, certain
rights and obligations of the Company and the rights of Holders of the Debt
Securities may be modified by the Company and the Indenture Trustee with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Outstanding Debt Securities of each series affected thereby;
PROVIDED that no such modification or amendment may, without the consent of each
Holder of any Outstanding Debt Security affected thereby, (i) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any such Debt Security; (ii) reduce the principal amount of, or the rate of
interest on, or any premium payable upon the redemption of, any such Debt
Security, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon declaration of acceleration of the
Maturity thereof; (iii) change the place of payment, or the coin or currency,
for payment of principal of (or premium, if any) or interest on any Debt
Security; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (v) modify any of the
foregoing provisions or any of the provisions relating to the waiver of
certain past defaults or certain covenants; (vi) modify the provisions of the
Indenture with respect to the subordination of the Debt Securities in a
manner adverse to the holders; (vii) reduce the above-stated percentage of
outstanding Debt Securities of any series necessary to modify or amend the
Indentures, or to waive compliance with certain provisions thereof or
Defaults or Events of Default thereunder and the consequences thereof; or
(viii) change the redemption provisions of any Debt Security in a manner
adverse to such holder. (See Article Nine.)
The Subordinated Debt Securities Indenture will provide that if the
Subordinated Debt Securities of any series are then held by a statutory trust
created by the Company for the purpose of issuing preferred securities and
common securities and purchasing a series of Subordinated Debt Securities
with the proceeds thereof, the Company and the Subordinated Debt Securities
Indenture Trustee shall not enter into any supplemental indenture, for the
purposes of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the Subordinated Debt Securities
Indenture, that adversely affects the holders of such preferred securities of
the trust without the prior consent of the holders of each such preferred
security. (See Section 902.)
DEFEASANCE: The Company may terminate its substantive obligations in
respect of Debt Securities of any series (except for its obligations to pay the
principal of (and premium, if any, on) and the interest on the Debt Securities
of that series) by (i) depositing with the applicable Indenture Trustee, under
the terms of an irrevocable trust agreement, money or U.S. Government
Obligations or a combination thereof sufficient to pay all remaining
indebtedness on the Debt Securities of that series, (ii) delivering to such
Indenture Trustee either an Opinion of Counsel or a ruling directed to the
Indenture Trustee from the Internal Revenue Service to the effect that the
Holders of the Debt Securities of that series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and termination
of obligations, and (iii) complying with certain other requirements set forth in
the Indenture. (See Section 1304.)
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SUBORDINATION: For purposes of the description of the Subordinated Debt
Securities, the term "Senior Indebtedness" shall mean the principal of and
premium, if any, and interest, if any, on the following, whether outstanding on
the date of execution of the Indenture or thereafter incurred or created:
(i) all obligations of the Company for money borrowed by the Company (including
Capital Lease Obligations and purchase money obligations with an original
maturity in excess of one year) or evidenced by debentures (other than Debt
Securities issued under the Subordinated Debt Securities Indenture), bonds,
notes, bankers' acceptances or other corporate debt securities or similar
instruments issued by the Company, (ii) all obligations of the Company with
respect to letters of credit; (iii) all obligations of the Company constituting
a guarantee or assumption of indebtedness of others of the type referred to in
the preceding clauses (i) and (ii), including through an agreement to purchase,
contingent or otherwise; (iv) all dividends of others for the payment of which
the Company is responsible or liable as obligor, guarantor or otherwise; (vi)
all obligations of the type referred to in clauses (i) through (iv) of others
secured by any property or asset of the Company (whether or not such obligation
is assumed by the Company), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured; or (vi) renewals, extensions or refundings of any of the
obligations referred to in the preceding clauses (i) through (v); unless, in the
case of any particular obligation or renewal, extension or refunding thereof,
under the express provisions of the instrument creating or evidencing the same,
or pursuant to which the same is outstanding, such obligation or such renewal,
extension or refunding thereof is not superior in right of payment to or is PARI
PASSU with the Subordinated Debt Securities. The term "Capital Lease
Obligations" shall mean any obligation of a Person that is required to be
classified and accounted for as a capital lease on the face of a balance sheet
of such Person prepared in accordance with GAAP.
The payment of the principal of and premium, if any, and any interest on
the Subordinated Debt Securities (including making any deposit pursuant to the
provisions described under "Defeasance" or repurchasing, redeeming or otherwise
retiring any Subordinated Debt Securities) will, to the extent set forth in the
Subordinated Debt Securities Indenture, be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness of the Company. Upon any
payment or distribution of assets or securities to creditors upon any
dissolution, winding up, or total or partial liquidation or reorganization of
the Company whether voluntary or involuntary or in bankruptcy, insolvency,
receivorship or similar proceedings of the Company, the holders of all Senior
Indebtedness of the Company will first be entitled to receive payment in full in
cash or cash equivalents of the principal of, premium, if any, or any interest
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment or distribution in respect of the principal of,
premium, if any, or any interest on the Subordinated Debt Securities, and in the
event that, notwithstanding the foregoing, the Trustee under the Subordinated
Indenture or the Holder of any Subordinated Debt Security receives any payment
or distribution of assets of any kind or character before all Senior
Indebtedness of the Company is paid in full, or effective provision is made for
its payments, then such payment or distribution will be required to be paid over
or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other person making payment or
distribution of assets of the Company for application to the payment of all
Senior Indebtedness of the Company remaining unpaid, to the extent necessary to
pay all Senior Indebtedness of the Company then due in full.
No direct or indirect payment by or on behalf of the Company of principal
of, premium, if any, or interest on, the Subordinated Debt Securities, whether
pursuant to the terms of the Subordinated Debt Securities or upon acceleration
or otherwise, shall be made if, at the time of such payment, there exists (i) a
default in the payment of all or any portion of any Senior Indebtedness or (ii)
any other default pursuant to which the maturity of any Senior Indebtedness has
been accelerated and, in either case, requisite notice has been given to the
Subordinated Debt Securities Trustee and such default shall not have been cured
or waived by or on behalf of the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the Company,
the Holders of the Subordinated Debt Securities shall be subrogated to the
rights of holders of Senior Indebtedness of the Company to receive payments or
distributions or assets of the Company applicable to Senior Indebtedness of
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the Company until the Subordinated Debt Securities are paid in full. As a
result of these subordination provisions, in the event of the Company's
insolvency, holders of the Subordinated Debt Securities may recover ratably
less than holders of Senior Indebtedness of the Company. (See Article
Fourteen of the Subordinated Debt Securities Indenture.) The Subordinated
Debt Securities Indenture provisions described in this paragraph, however, do
not prevent the Company from making a sinking fund payment with Subordinated
Debt Securities acquired prior to the maturity of Senior Indebtedness or, in
the case of default, prior to such default and notice thereof.
FORM, EXCHANGE, AND TRANSFER: The Debt Securities of each series will be
issuable only in fully registered form without coupons and, unless otherwise
specified in the applicable Prospectus Supplement, in denominations of $1,000
and any integral multiple thereof. (See Section 302.)
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to global securities described in the applicable
Prospectus Supplement, Debt Securities of any series will be exchangeable for
other Debt Securities of the same series, of any authorized denomination and of
like tenor and aggregate principal amount. (See Section 305.)
Subject to the terms of the Indenture and the limitations applicable to
global securities set forth in the applicable Prospectus Supplement, Debt
Securities may be presented for exchange or for registration of transfer (duly
endorsed or with the form of transfer endorsed thereon duly executed if so
required by the Company or the Indenture Trustee) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. Unless otherwise provided in the Securities to be transferred or
exchanged, no service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
therewith. The Company has appointed the Trustee as Security Registrar. Any
transfer agent (in addition to the Security Registrar) initially designated by
the Company for any Debt Securities will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that the Company will be required
to maintain a transfer agent in each Place of Payment for the Debt Securities of
each series. (See Sections 305 and 1002.)
If the Debt Securities of any series are to be redeemed, the Company will
not be required to (i) issue, register the transfer of, or exchange any Debt
Security of that series during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption of any such Debt
Security that may be selected for redemption and ending at the close of business
on the day of such mailing or (ii) register the transfer of or exchange any Debt
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any such Debt Security being redeemed in part. (See Section 305.)
PAYMENT AND PAYING AGENTS: Unless otherwise indicated in the applicable
Prospectus Supplement, payment of the interest on a Debt Security on any
Interest Payment Date will be made to the Person in whose name such Debt
Security (or one or more Predecessor Debt Securities) is registered at the close
of business on the Regular Record Date for such interest. (See Section 307.)
Principal of and any premium and interest on the Debt Securities of a
particular series will be payable at the office of such Paying Agent or Paying
Agents as the Company may designate with respect to the Debt Securities of such
series for such purpose from time to time, except that unless otherwise
indicated in the applicable Prospectus Supplement, payment of any interest may
be made by check mailed to the address of the Person entitled thereto as such
address appears in the Security Register. Unless otherwise indicated in the
applicable Prospectus Supplement, the corporate trust office of the Trustee in
The City of New York will be designated as the Company's sole Paying Agent for
payments with respect to Debt Securities of each series. Any other Paying
Agents initially designated by the Company for the Debt Securities of a
particular series will be named in the applicable Prospectus Supplement. The
Company will be required to maintain a Paying Agent in each Place of Payment for
the Debt Securities of a particular series. (See Sections 307 and 1002.)
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All moneys paid by the Company to a Paying Agent for the payment of their
principal of or any premium or interest on any Debt Security which remains
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Company, and the Holder of such
Debt Security thereafter may look only to the Company for payment thereof. (See
Section 1008.)
CONCERNING THE INDENTURE TRUSTEE: The Company and its affiliates
conduct banking transactions with the Indenture Trustee in the normal course
of business.
GOVERNING LAW: The Indentures will be governed by and construed in
accordance with the laws of the State of New York except to the extent that
the Trust Indenture Act shall be applicable.
DESCRIPTION OF THE PREFERRED SECURITIES OF THE TRUST
GENERAL: The Trust may issue only one series of Preferred Securities which
shall have the terms described in the Prospectus Supplement relating thereto.
The Declaration authorizes the Administrative Trustee to issue on behalf of the
Trust one series of Preferred Securities. The Declaration will be qualified as
an indenture under the Trust Indenture Act. The Property Trustee, The Bank of
New York, an independent trustee, will act as indenture trustee for the
Preferred Securities to be issued by the Trust, for the purpose of compliance
with the provisions of the Trust Indenture Act. The proceeds from the sale of
the Preferred Securities and the Common Securities will be used by the Trust to
purchase a corresponding series of Subordinated Debt Securities from the
Company. The Subordinated Debt Securities of that series will be held in trust
by the Property Trustee for the benefit of the holders of the Trust Securities.
Pursuant to the Preferred Securities Guarantee, the Company will agree to make
payments of Distributions and payments on redemption or liquidation with respect
to such Preferred Securities, but only to the extent the Trust holds funds
available therefor and has not made such payments. See "DESCRIPTION OF THE
PREFERRED SECURITIES GUARANTEE". The following summary of the Trust, the
Declaration and the Preferred Securities of the Trust does not purport to be
complete and is subject to, and qualified in its entirety by the detailed
provisions of the Amended and Restated Declaration of Trust and Form of
Certificate of Preferred Securities, forms of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part. Capitalized terms
used under this heading and not otherwise defined hereunder shall have the
meanings ascribed thereto in the Amended and Restated Declaration of Trust.
Wherever particular provisions or terms defined therein are referred to herein,
such provisions or definitions are incorporated by reference as part of the
statements made herein and such statements are qualified in their entirety by
such reference.
It is anticipated that the assets of the Trust available for distribution
to the holders of its Preferred Securities will be limited to payments from the
Company under the Subordinated Debt Securities in which the Trust will invest
the proceeds from the issuance and sale of its Trust Securities. If the Company
fails to make a payment on such Subordinated Debt Securities, the Trust will not
have sufficient funds to make related payments, including Distributions, on the
Preferred Securities. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration or made part of the Declaration by the Trust Indenture Act, and
which will mirror the terms of the Subordinated Debt Securities held by the
Trust and as described in the Prospectus Supplement related thereto.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of the Trust for specific terms, including (i) the distinctive
designation of such Preferred Securities; (ii) the number of Preferred
Securities issued; (iii) the annual distribution rate or rates (or method of
determining such rate or rates) for Preferred Securities and the date or dates
upon which such distributions shall be payable; provided, however, that
distributions on such Preferred Securities shall be payable on a periodic basis
to holders of such Preferred Securities as of a record date in each period
during which such Preferred Securities are outstanding; (iv) whether
distributions on Preferred Securities shall be cumulative, and, in the case of
Preferred Securities having such cumulative distribution rights, the date or
dates or method of determining the date or dates from which distributions on
Preferred Securities shall be cumulative; (v) the obligation or option, if any,
of the Trust to purchase or redeem Preferred Securities and the price or prices
at which, the period or periods within which, and the terms and conditions upon
which, Preferred Securities shall be purchased or redeemed, in
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whole or in part, pursuant to such obligation or option (with such redemption
price to be determined through negotiations among the Company and the
underwriters based on, among other factors, redemption prices of securities
similar to the Preferred Securities and market conditions generally); (vi)
the terms and conditions, if any, upon which the Subordinated Debt Securities
may be distributed to holders of Preferred Securities; (vii) if applicable,
any securities exchange upon which the Preferred Securities shall be listed;
(viii) whether the Preferred Securities are to be issued in whole or in part
in book-entry form and represented by one or more global certificates, and if
so, the identity of the depository for such global certificates and the
specific terms of the depository arrangements therefor; and (ix) any other
relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities not inconsistent with the Declaration or with applicable
law. The Preferred Securities will be guaranteed by the Company to the
extent set forth below under "DESCRIPTION OF THE PREFERRED SECURITIES
GUARANTEE". The Preferred Securities Guarantee of the Company, when taken
together with the Company's obligations under the Subordinated Debt
Securities and the relevant Supplemental Indenture, and its obligations under
the Declaration, including obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities),
would provide a full and unconditional guarantee of amounts due on Preferred
Securities issued by the Trust. Certain United States federal income tax
considerations applicable to any offering of Preferred Securities will be
described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, the Trust will
issue one series of Common Securities. The Declaration authorizes the
Administrative Trustee to issue on behalf of the Trust one series of Common
Securities having such terms including distributions, redemption, voting,
liquidation rights or such restrictions as shall be set forth therein. The
terms of the Common Securities will be substantially identical to the terms of
the Preferred Securities issued by the Trust and the Common Securities will rank
PARI PASSU, and payments will be made thereon pro rata with the Preferred
Securities except that, upon the occurrence and during the continuance of an
event of default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace any
of the PSCO Trustees. All of the Common Securities of the Trust will be
directly or indirectly owned by the Company.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION: Pursuant to the Declaration,
the Trust shall be dissolved on the earliest to occur of: (i) the expiration of
the term of the Trust; (ii) the bankruptcy, dissolution or liquidation of the
Company or an acceleration of the maturity of the corresponding series of
Subordinated Debt Securities held by the Trust; (iii) if provided for in the
accompanying Prospectus Supplement, upon the election of the Company to dissolve
the Trust and, after satisfaction of liabilities to creditors of the Trust,
cause the distribution of the corresponding series of Subordinated Debt
Securities to the holders of the Trust Securities; (iv) the redemption of all of
the Trust Securities; and (v) an order for the dissolution of the Trust shall
have been entered by a court of competent jurisdiction. The election of the
Company pursuant to clause (iii) above shall be made by the Company giving
written notice to the PSCO Trustees not less than 30 days prior to the date of
distribution of the corresponding series of Subordinated Debt Securities and
shall be accompanied by an opinion of counsel that such event will not be a
taxable event to the holders of the Trust Securities for federal income tax
purposes.
If a dissolution event occurs as described in clause (ii), (iii), (iv) or
(v) above with respect to the Trust, the Trust shall be liquidated by the PSCO
Trustees as expeditiously as the PSCO Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of its Trust Securities a like amount
of the Subordinated Debt Securities held by the Trust, unless such distribution
is determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to, in the case of holders
of Trust Securities, the aggregate liquidation amount per Trust Security
specified in the accompanying Prospectus
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Supplement plus accumulated and unpaid distributions thereon to the date of
payment (such amount, the "Liquidation Distribution"). If the Liquidation
Distribution with respect to the Preferred Securities can be paid only in
part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable by the Trust on
such Preferred Securities shall be paid on a pro rata basis. The holders of
the Trust's Common Securities will be entitled to receive the Liquidation
Distribution upon any such liquidation pro rata with the holders of its
Preferred Securities, except that if a Declaration Event of Default (defined
below) has occurred and is continuing the Preferred Securities shall have a
priority over the Common Securities with respect to payment of such
Liquidation Distribution.
DECLARATION EVENT OF DEFAULT; NOTICE: An Event of Default under the
Subordinated Debt Securities Indenture relating to the Subordinated Debt
Securities held by the Trust shall constitute a Declaration Event of Default
with respect to the Preferred Securities issued by the Trust under the
Declaration.
Within 90 days after the occurrence of any Declaration Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Declaration Event of Default to the holders of the Trust
Securities, the Administrative Trustee and the Company, unless such Declaration
Event of Default shall have been cured or waived. The Company and the
Administrative Trustee are required to file annually with the Property Trustee a
certificate as to whether or not they are in compliance with all the conditions
and covenants applicable to them under the Declaration.
Under the Declaration, if the Property Trustee has failed to enforce its
rights under the Declaration or the Subordinated Debt Securities Indenture, to
the fullest extent permitted by law and subject to the terms of the Declaration
and the Subordinated Debt Securities Indenture, any holder of the corresponding
Preferred Securities may institute a legal proceeding directly to enforce the
Property Trustee's rights under the Declaration or the Subordinated Debt
Securities Indenture with respect to Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder without first instituting a legal proceeding against
the Property Trustee or any other person. To the extent that any action under
the Subordinated Debt Securities Indenture is entitled to be taken by the
holders of at least a specified percentage of the principal amount of a series
of Subordinated Debt Securities, holders of the corresponding Preferred
Securities may take such action if such action is not taken by the Property
Trustee. Notwithstanding the foregoing, if a Declaration Event of Default
attributable to the Company's failure to pay principal of or premium, if any, or
interest on the Subordinated Debt Securities held by the Trust has occurred and
is continuing, then each holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of any such payment to
such holder, all as provided in the Subordinated Debt Securities Indenture and
the Supplemental Indenture thereunder relating to the Subordinated Debt
Securities purchased by the Trust.
REMOVAL OF PSCO TRUSTEES: Unless a Declaration Event of Default has
occurred and is continuing, any PSCO Trustee may be removed and replaced at any
time by the holder of the Common Securities. If a Declaration Event of Default
has occurred and is continuing, the Property Trustee and the Delaware Trustee
may be removed and replaced at such time only by the holders of at least a
majority in aggregate liquidation amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustee, which
voting rights are vested exclusively in the holder of the Common Securities. No
resignation or removal of PSCO Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Declaration.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE: Unless a Declaration Event of
Default has occurred and is continuing, at any time and from time to time, for
the purpose of meeting the legal requirements of the Trust Indenture Act or of
any jurisdiction in which any part of the Trust Property (as defined in the
Declaration) may at such time be located, the holder of the Common Securities
and the Administrative Trustee
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shall have the power (i) to appoint one or more persons approved by the
Property Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such Trust Property, in either case with such powers as may be
provided in the instrument of appointment, and (ii) to vest in such person or
persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the Declaration. If a Declaration
Event of Default has occurred and is continuing, only the Property Trustee
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES: Any corporation or other
entity into which any PSCO Trustee may be merged or converted or with which it
may be consolidated, or any corporation or other entity resulting from any
merger, conversion or consolidation to which any PSCO Trustee shall be a party,
or any corporation or other entity succeeding to all or substantially all the
corporate trust business of any PSCO Trustee, shall be the successor of such
PSCO Trustee under the applicable Declaration, provided such corporation or
other entity shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST: The
Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other entity, except as
described below or in "Liquidation Distribution Upon Dissolution". The Trust
may, at the request of the Company, with the consent of the Administrative
Trustee and without the consent of the holders of its Preferred Securities,
merge with or into, consolidate, amalgamate, or be replaced by a trust organized
as such under the laws of any State, provided that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
such Preferred Securities or (b) substitutes for such Preferred Securities other
securities substantially similar to such Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as such Preferred
Securities rank with respect to the payment of Distributions and payments upon
redemption and liquidation, (ii) the Company expressly appoints a trustee of
such successor entity possessing the same powers and duties as the Property
Trustee with respect to the corresponding series of Subordinated Debt
Securities, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which such Preferred Securities are
then listed, (iv) such merger, consolidation, amalgamation or replacement does
not cause such Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of such Preferred
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially similar to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation or replacement, the
Company has received an opinion of counsel to the Trust to the effect that (a)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of such Preferred
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation or replacement, neither the
Trust nor such successor entity will be required to register as an investment
company under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and (viii) the Company or any permitted successor assignee owns
all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Preferred Securities Guarantee and Declaration.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
all holders of its Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by, any other entity, or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity not to be classified as a grantor trust for federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT: Except as provided below and
under "Mergers, Consolidations, Amalgamations or Replacements of the Trust" and
"DESCRIPTION OF THE GUARANTEE--Amendments and Assignment" and as otherwise
required by law and the Declaration, the holders of the Preferred Securities
will have no voting rights.
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The Declaration may be amended from time to time by the Company and the
PSCO Trustees, without the consent of the holders of the corresponding Preferred
Securities, (i) to cure any ambiguity, defect or inconsistency or (ii) to make
any other change that does not adversely affect in any material respect the
interests of any holder of such Preferred Securities. The Declaration may be
amended by the Company and the PSCO Trustees in any other respect, with the
consent of the holders of at least a majority in aggregate liquidation amount of
such Preferred Securities, except to (i) change the amount, timing or currency
or otherwise adversely affect the method of payment of any distribution or
Liquidation Distribution on the Trust Securities, (ii) restrict the right of a
holder of any such Preferred Security to institute suit for enforcement of any
distribution, Redemption Price or Liquidation Distribution on the Trust
Securities, (iii) change the purpose of the Trust, (iv) authorize the issuance
of any additional beneficial interests in the Trust, (v) change the redemption
provisions of the Trust Securities, (vi) change the conditions precedent for the
Company to elect to dissolve the Trust and distribute the Subordinated Debt
Securities to the holders of such Trust Securities or (vii) affect the limited
liability of any holder of such Preferred Securities, which amendment requires
the consent of each holder of the related Preferred Securities affected thereby.
Notwithstanding the foregoing, no amendment may be made without receipt by the
Trust of an opinion of counsel to the effect that such amendment will not affect
the Trust's status as a grantor trust for federal income tax purposes or its
exemption from regulation as an investment company under the Investment Company
Act.
The PSCO Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Subordinated Debt
Securities Indenture Trustee or executing any trust or power conferred on the
Subordinated Debt Securities Indenture Trustee with respect to the Subordinated
Debt Securities held by the Trust, (ii) waive any past default pursuant to
Section 513 of the Subordinated Debt Securities Indenture, (iii) exercise any
right to rescind or annul an acceleration of the principal of such Subordinated
Debt Securities, or (iv) consent to any amendment or modification of the
Subordinated Debt Securities Indenture, where such consent shall be required,
without, in each case, obtaining the prior consent of the holders of at least a
majority in aggregate liquidation amount of all outstanding Preferred
Securities; provided, however, that where a consent under the Subordinated Debt
Securities Indenture would require the consent of each holder of Subordinated
Debt Securities affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the Preferred Securities.
The PSCO Trustees shall not revoke any action previously authorized or approved
by a vote of the holders of such Preferred Securities except by subsequent vote
of the holders thereof. The Property Trustee shall notify all holders of
Preferred Securities of any notice received from the Subordinated Debt
Securities Indenture Trustee as a result of the Trust being the holder of the
Subordinated Debt Securities. In addition to obtaining the consent of the
holders of the Preferred Securities, prior to taking any of the foregoing
actions, the PSCO Trustees shall obtain an opinion of counsel to the effect that
the Trust will not be classified as an association taxable as a corporation or a
partnership for federal income tax purposes on account of such action and will
continue to be classified as a grantor trust for federal income tax purposes.
Any required consent of holders of Preferred Securities may be given at a
meeting of holders of such Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of such Preferred Securities in the manner set
forth in the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under certain circumstances, any Preferred Securities that are owned
by the Company, the PSCO Trustees or any affiliate of the Company or any PSCO
Trustee shall, for purposes of such vote or consent, be treated as if they were
not outstanding.
INFORMATION CONCERNING THE PROPERTY TRUSTEE: The Property Trustee is the
sole trustee under the Declaration for purposes of the Trust Indenture Act and
shall have and be subject to all of the duties and responsibilities specified
with respect to an indenture trustee under the Trust Indenture Act. The
Property
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Trustee, other than during the occurrence and continuance of a Declaration
Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, upon a Declaration Event of Default, must
use the same degree of care and skill in the exercise thereof as a prudent
person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of
any holder of Preferred Securities unless it is offered reasonable security
or indemnity against the costs, expenses and liabilities that might be
incurred thereby. If no Declaration Event of Default has occurred and is
continuing, and the Property Trustee is required to decide between
alternative courses of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the
Declaration, and the matter is not one on which holders of Preferred
Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Company and, if not so
directed, may take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own negligent action, negligent failure to act or willful
misconduct.
MISCELLANEOUS: The Administrative Trustee is authorized and directed to
conduct the affairs of and to operate the Trust in such a way that (i) it will
not be deemed to be an "investment company" required to be registered under the
Investment Company Act or to be taxed as a corporation or partnership for
federal income tax purposes, (ii) it will be classified as a grantor trust for
federal income tax purposes and (iii) the Subordinated Debt Securities held by
it will be treated as indebtedness of the Company for federal income tax
purposes. In this connection, the Company and the Administrative Trustee are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Declaration, that the Company and the
Administrative Trustee determine in their discretion to be necessary or
desirable for such purposes, even if such action adversely affects the interests
of the holders of the Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any of
its assets.
Except as otherwise provided in the Declaration, any action requiring the
consent or vote of the PSCO Trustees shall be approved by the Administrative
Trustee.
GOVERNING LAW: The Declaration will be governed by and construed in
accordance with the laws of the State of Delaware.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be executed and delivered by the
Company concurrently with the issuance by the Trust of its Preferred Securities
for the benefit of the holders from time to time of such Preferred Securities.
The Preferred Securities Guarantee will be qualified as an indenture under the
Trust Indenture Act and The Bank of New York will act as indenture trustee (the
"Preferred Securities Guarantee Trustee") under the Preferred Securities
Guarantee for the purposes of compliance with the Trust Indenture Act. The
Preferred Securities Guarantee Trustee will hold the Preferred Securities
Guarantee for the benefit of the holders of the Preferred Securities issued by
the Trust. The following summary of the Preferred Securities Guarantee does not
purport to be complete and is qualified in its entirety by the detailed
provisions of the Preferred Securities Guarantee, a form of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
Capitalized terms used under this heading and not otherwise defined hereunder
shall have the meanings ascribed thereto in the Preferred Securities Guarantee.
Whenever particular provisions or terms defined therein are referred to herein,
such provisions or definitions are incorporated by reference as part of the
statements made herein and such statements are qualified in their entirety by
such reference.
GENERAL: The Company will irrevocably agree, to the extent set forth in
the Preferred Securities Guarantee, to pay in full, to the holders of the
Preferred Securities issued by the Trust, the Preferred
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Securities Guarantee Payments (as defined below) (except to the extent
previously paid), as and when due, regardless of any defense, right of
set-off or counterclaim which the Trust may have or assert. The following
payments, to the extent not paid by the Trust (the "Preferred Securities
Guarantee Payments"), will be subject to the Preferred Securities Guarantee
(without duplication), (i) any accumulated and unpaid Distributions required
to be paid on such Preferred Securities, to the extent that the Trust has
funds available therefor, (ii) the redemption price (the "Redemption Price")
and all accrued and unpaid Distributions to the date of redemption to the
extent that the Trust has funds available therefor, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Trust (other than
in connection with a distribution of Subordinated Debt Securities to holders
of such Preferred Securities or the redemption of all such Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount
specified in the Prospectus Supplement per Preferred Security plus all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Trust has funds available therefor and (b) the
amount of assets of the Trust remaining available for distribution to
holders of Preferred Securities upon a dissolution and liquidation of the
Trust (the "Liquidation Payment"). The Company's obligation to make a
Preferred Securities Guarantee Payment may be satisfied by direct payment of
the required amounts by the Company to the holders of the Preferred
Securities or by causing the Trust to pay such amounts to such holders.
While the assets of the Company will not be available pursuant to the
Preferred Securities Guarantee for the payment of any distribution,
Liquidation Payment or Redemption Price on any Preferred Securities if the
Trust does not have funds available therefor as described above, the Company
has agreed under the Declaration to pay all expenses of the Trust except the
Trust's obligations under its Preferred Securities. Accordingly, the
Preferred Securities Guarantee, together with the backup undertakings
consisting of the Company's obligations under the Declaration, the
corresponding series of Subordinated Debt Securities and the relevant
Supplemental Indenture provide for the Company's full and unconditional
guarantee of the Preferred Securities.
No single document executed by the Company in connection with the
issuance of the Preferred Securities will provide for the Company's full and
unconditional Preferred Securities Guarantee of the Preferred Securities.
It is only the combined operation of the Company's obligations under the
Preferred Securities Guarantee, the Declaration, the corresponding series of
Subordinated Debt Securities and the relevant Supplemental Indenture that has
the effect of providing a full and unconditional guarantee of the Trust's
obligations under its Preferred Securities.
STATUS OF THE PREFERRED SECURITIES GUARANTEE: The Preferred Securities
Guarantee will constitute an unsecured obligation of the Company and will rank
(a) subordinate and junior in right of payment to all general liabilities of the
Company, (b) PARI PASSU with the senior most preferred stock now or hereafter
issued by the Company and with any guarantee now or hereafter issued by the
Company in respect of preferred stock of any affiliate of the Company and (c)
senior to the Company's common stock. The Declaration provides that each holder
of Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee. The Preferred
Securities Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Preferred Securities
Guarantee without first instituting a legal proceeding against any other person
or entity). The Preferred Securities Guarantee will not be discharged except by
payment of the Preferred Securities Guarantee Payments in full to the extent not
previously paid or upon distribution to the holders of the Preferred Securities
of the corresponding series of Subordinated Debt Securities pursuant to the
Declaration.
AMENDMENTS AND ASSIGNMENT: Except with respect to any changes which do not
adversely affect the rights of holders of the Preferred Securities in any
material respect (in which case no consent of the holders will be required), the
Preferred Securities Guarantee may not be amended without the prior approval of
the holders of at least a majority in aggregate liquidation amount of the
Preferred Securities (excluding any Preferred Securities held by the Company or
an affiliate thereof). The manner of obtaining any such approval will be as set
forth under "DESCRIPTION OF THE PREFERRED SECURITIES OF THE TRUST -- Voting
Rights; Amendment of Trust Agreement". All guarantees and agreements contained
in the Preferred Securities
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Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders
of the Preferred Securities.
PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT: An event of default
under the Preferred Securities Guarantee (a "Preferred Securities Guarantee
Event of Default") will occur upon the failure of the Company to perform any of
its payment or other obligations thereunder, provided that except with respect
to the Preferred Securities Guarantee Event of Default resulting from a failure
to make any of the Preferred Securities Guarantee Payments, the Company shall
have received notice of such Preferred Securities Guarantee Event of Default
from the Preferred Securities Guarantee Trustee and shall not have cured such
Preferred Securities Guarantee Event of Default within 60 days after receipt of
such notice. The holders of at least a majority in aggregate liquidation amount
of the Preferred Securities (excluding any Preferred Securities held by the
Company or an affiliate thereof) will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Preferred
Securities Guarantee Trustee in respect of such Preferred Securities Guarantee
or to direct the exercise of any trust or power conferred upon the Preferred
Securities Guarantee Trustee under the Preferred Securities Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce such holder's rights under the Preferred
Securities Guarantee without first instituting a legal proceeding against the
Trust, the Preferred Securities Guarantee Trustee or any other person or entity.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE: The
Preferred Securities Guarantee Trustee, other than during the occurrence and
continuance of a Preferred Securities Guarantee Event of Default, undertakes to
perform only such duties as are specifically set forth in the Preferred
Securities Guarantee and, after a Preferred Securities Guarantee Event of
Default, to exercise the same degree of care and skill in the exercise thereof
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Preferred Securities Guarantee Trustee
is under no obligation to exercise any of the powers vested in it by the
Preferred Securities Guarantee at the request of any holder of Preferred
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE: The Preferred
Securities Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price or Liquidation Payment for the Preferred
Securities or upon distribution of the corresponding series of Subordinated Debt
Securities to the holders of the Preferred Securities. The Preferred Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Preferred Securities must restore payment
of any sums paid under the Preferred Securities or the Preferred Securities
Guarantee.
GOVERNING LAW: The Preferred Securities Guarantee will be governed by and
construed in accordance with the laws of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE PREFERRED SECURITIES GUARANTEE
AND THE SUBORDINATED DEBT SECURITIES HELD BY THE TRUST
Payments of Distributions and redemption and liquidation payments due on
the Preferred Securities (to the extent the Trust has funds available for such
payments) will be guaranteed by the Company as and to the extent set forth under
"DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE". No single document
executed by the Company in connection with the issuance of the Preferred
Securities will provide for the Company's full, irrevocable and unconditional
guarantee of the Preferred Securities. It is only the combined operation of the
Company's obligations under the Preferred Securities Guarantee, the Declaration,
the corresponding series of Subordinated Debt Securities and the Indenture that
has the effect of providing a full, irrevocable and unconditional guarantee of
the Trust's obligations under its Preferred Securities.
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A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Preferred
Securities Guarantee without first instituting a legal proceeding against the
Preferred Securities Guarantee Trustee, the Trust or any other person or entity.
As long as the Company makes payments of interest and other payments when
due on the Subordinated Debt Securities held by the Trust, such payments will be
sufficient to cover the payment of Distributions and redemption and Liquidation
Distributions due on the Preferred Securities, primarily because (i) the
aggregate principal amount of such Subordinated Debt Securities will be equal to
the sum of the aggregate liquidation amount of the Preferred Securities and
Common Securities, (ii) the interest rate and interest and other payment dates
on such Subordinated Debt Securities will match the Distribution rate and
Distribution and other payment dates for the Preferred Securities, (iii) the
Declaration provides that the Company shall pay for all and any costs, expenses
and liabilities of the Trust of such Preferred Securities except the Trust's
obligations under the Preferred Securities, and (iv) the Declaration provides
that the Trust will not engage in any activity that is not consistent with the
limited purposes of the Trust. If and to the extent that the Company does not
make payments on such Subordinated Debt Securities, the Trust will not have
funds available to make payments of Distributions or other amounts due on the
Preferred Securities.
A principal difference between the rights of a holder of a Preferred
Security (which represents an undivided beneficial interest in the assets of the
Trust thereof) and a holder of a Subordinated Debt Security is that a holder of
a Subordinated Debt Security will accrue, and (subject to the permissible
extension of the interest payment period) is entitled to receive, interest on
the principal amount of Subordinated Debt Securities held, while a holder of
Preferred Securities is entitled to receive Distributions only if and to the
extent the Trust has funds available for the payment of such Distributions.
Upon any voluntary or involuntary dissolution or liquidation of the Trust
not involving a distribution of the Subordinated Debt Securities held by the
Trust, after satisfaction of liabilities to creditors of the Trust, the holders
of the Preferred Securities will be entitled to receive, out of assets held by
the Trust, the Liquidation Distribution in cash. See "DESCRIPTION OF THE
PREFERRED SECURITIES OF THE TRUST -- Liquidation Distribution Upon Dissolution".
Upon any voluntary liquidation or bankruptcy of the Company, the Trust, as
holder of the Subordinated Debt Securities, would be a creditor of the Company,
subordinated in right of payment to all Senior Indebtedness, but entitled to
receive payment in full of principal, premium, if any, and interest, before any
stockholders of the Company receive payments or distributions.
A default or event of default under any Senior Indebtedness would not
constitute an Event of Default under the Subordinated Debt Securities Indenture.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Subordinated Debt Securities
provide that no payments may be made in respect of the Subordinated Debt
Securities until such Senior Indebtedness has been paid in full or any payment
default thereunder has been cured or waived. Failure to make required payments
on any series of Subordinated Debt Securities would constitute an Event of
Default under the Subordinated Debt Securities.
VALIDITY OF THE SECURITIES
Except as set forth below, the validity of the Offered Securities of the
Company will be passed upon for the Company by LeBoeuf, Lamb, Greene & MacRae,
L.L.P., a limited liability partnership including professional corporations, New
York, New York. Certain legal matters in connection with the Offered Securities
will be passed upon for the underwriters by Cahill Gordon & Reindel, a
partnership including a professional corporation, New York, New York. Certain
matters of Delaware law relating to the validity of the Preferred Securities
will be passed upon on behalf of the Trust by Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to the Trust. Certain United
States federal income taxation matters will be passed upon for the Company and
the Trust by LeBoeuf, Lamb, Greene & MacRae, L.L.P, special tax counsel to the
Company and the Trust. All legal matters pertaining to title and the respective
liens
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of the 1993 Mortgage and the 1939 Mortgage will be passed upon only by
LeBoeuf, Lamb, Greene & MacRae, L.L.P. Cahill Gordon & Reindel from time to
time renders legal services to the Company. At March 31, 1998, Gary W. Wolf,
a partner in that firm, beneficially owned 2,383 shares of common stock of
New Century Energies, Inc., the parent company of the Company. In giving
their opinion, Cahill Gordon & Reindel may rely as to all matters of Colorado
law upon the opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
EXPERTS
The consolidated balance sheets and statements of capitalization of the
Company and its subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1997, and the related
financial statement schedule, included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997, included in the New Century Energies,
Inc. combined Annual Report on Form 10-K for the year ended December 31, 1997,
which statements and schedule are incorporated by reference in this Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
PLAN OF DISTRIBUTION
The Company and/or the Trust may sell the Offered Securities: (i) directly
to purchasers, (ii) to or through underwriters, or (iii) through agents or
dealers. The Prospectus Supplement with respect to the Offered Securities will
set forth the terms of the offering of the Offered Securities, including the
name or names of any such underwriters, agents or dealers; the purchase price of
the Offered Securities and the net proceeds to the Company and/or the Trust from
such sale; any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation; the initial public
offering price; any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchange on which such Offered Securities may be
listed. 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 used in any sale, the Offered Securities will be
acquired by such 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 a particular underwritten offering of Offered Securities will be
named in the 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 of such Prospectus Supplement. Unless otherwise set
forth in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in a sale of Offered Securities, the Company and/or
the Trust will sell such Offered Securities to the dealers as principal. The
dealers may then resell such Offered Securities to the public at varying prices
to be determined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
The Offered Securities may be sold directly by the Company and/or the Trust
or through agents designated by the Company and/or the Trust from time to time.
Any agent involved in the offer or sale of the Offered Securities in respect to
which this Prospectus is delivered will be named, and any commissions payable by
the Company and/or the Trust to such agent will be set forth in the Prospectus
Supplement relating thereto. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
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Agents, dealers and underwriters may be entitled under agreements with the
Company and/or the Trust to indemnification by the Company and/or the Trust
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for the Company and/or the Trust in the ordinary course of business.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY
OFFERED HEREBY, NOR ARE THEY AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS SUBSIDIARIES SINCE THE DATE
HEREOF.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
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Certain Terms of the Offered Bonds . . . . . . . . . . . . . . . . . .S-2
Application of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .S-5
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-6
PROSPECTUS
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . .3
Incorporation of Certain Documents by Reference. . . . . . . . . . . . .3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
The Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Ratio of Consolidated Earnings to Consolidated
Fixed Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Application of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .6
Description of the New Bonds . . . . . . . . . . . . . . . . . . . . . .6
Description of the 1939 Mortgage . . . . . . . . . . . . . . . . . . . 21
Description of the Debt Securities . . . . . . . . . . . . . . . . . . 26
Description of the Preferred
Securities of the Trust. . . . . . . . . . . . . . . . . . . . . . 33
Description of the Preferred
Securities Guarantee . . . . . . . . . . . . . . . . . . . . . . . 39
Relationship Among the Preferred Securities, the
Preferred Securities Guarantee and the
Subordinated Debt Securities Held by the Trust . . . . . . . . . . 41
Validity of the Securities . . . . . . . . . . . . . . . . . . . . . . 42
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 42
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$250,000,000
PUBLIC SERVICE COMPANY
OF COLORADO
FIRST COLLATERAL TRUST BONDS,
SERIES NO. 6
6% BONDS DUE 2003
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PROSPECTUS SUPPLEMENT
April 15, 1998
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SALOMON SMITH BARNEY
BANCAMERICA ROBERTSON STEPHENS
CHASE SECURITIES INC.
J.P. MORGAN & CO.
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