PROSPECTUS SUPPLEMENT
(To Prospectus dated March 31, 2000)
$106,000,000
Public Service Company of Oklahoma
Floating Rate Notes, Series A, Due 2002
Interest on the Notes will accrue at a rate per annum equal to the
floating interest rate called LIBOR, which we describe under "DESCRIPTION OF
NOTES" beginning on page S-4 of this prospectus supplement, plus 0.625%.
Interest will accrue from November 21, 2000 until November 21, 2002 or the date
of earlier redemption. We will pay interest on the Notes quarterly in arrears on
February 21, May 21, August 21 and November 21 of each year, beginning February
21, 2001.
We may redeem some or all of the Notes on any interest payment date on or
after November 21, 2001, at a redemption price equal to the principal amount of
the Notes to be redeemed plus interest accrued to the redemption date. There is
no sinking fund for the Notes.
The Notes are unsecured, rank equally with all of our other unsecured and
unsubordinated indebtedness and will be effectively subordinated to all of our
secured debt, including $340 million outstanding first mortgage bonds as of
November 1, 2000.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
Per Note Total
Initial public offering price 100% $106,000,000
Underwriting discount 0.25% $ 265,000
Proceeds, before expenses, to us 99.75% $105,735,000
The initial public offering price set forth above does not include accrued
interest, if any.
The underwriters expect to deliver the Notes in book-entry form through
the facilities of The Depository Trust Company against payment in New York, New
York on November 21, 2000.
----------------------
UBS Warburg LLC
ABN AMRO Incorporated
TD Securities
Prospectus Supplement dated November 16, 2000
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
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TABLE OF CONTENTS
Prospectus Supplement Page
DOCUMENTS INCORPORATED BY REFERENCE...........................S-3
THE COMPANY...................................................S-3
USE OF PROCEEDS...............................................S-3
DESCRIPTION OF NOTES..........................................S-4
General...................................................S-4
Interest..................................................S-4
Optional Redemption.......................................S-7
Global Securities.........................................S-7
Events of Default.........................................S-8
Certain Notices...........................................S-8
UNDERWRITING..................................................S-9
LEGAL OPINIONS................................................S-10
Prospectus
WHERE YOU CAN FIND MORE INFORMATION ABOUT THIS PROSPECTUS...... 2
DOCUMENTS INCORPORATED BY REFERENCE............................ 2
REPORTS TO HOLDERS OF SENIOR NOTES............................. 3
FORWARD-LOOKING STATEMENTS..................................... 3
PROSPECTUS SUMMARY............................................. 5
SELECTED FINANCIAL INFORMATION................................. 6
PUBLIC SERVICE COMPANY OF OKLAHOMA............................. 7
RATIOS OF EARNINGS TO FIXED CHARGES............................ 7
USE OF PROCEEDS................................................ 7
DESCRIPTION OF THE SENIOR NOTES................................ 7
General................................................... 7
Registration, Transfer, Exchange and Form................. 9
Book-Entry Only System.................................... 9
Paying Agents............................................. 11
Consolidation, Merger, Conveyance, Sale or Transfer....... 11
Limitation on Liens....................................... 11
Modification of the Senior Note Indenture................. 13
Events of Default......................................... 13
Defeasance................................................ 14
Resignation or Removal of Senior Note Trustee............. 16
No Recourse Against Others................................ 16
Concerning the Senior Note Trustee........................ 16
LEGAL OPINIONS................................................. 16
EXPERTS........................................................ 17
PLAN OF DISTRIBUTION........................................... 17
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. Information incorporated by reference is
considered to be part of this prospectus supplement and the accompanying
prospectus. Later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference our documents
listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all the
Notes.
o Annual Report on Form 10-K for the year ended December 31, 1999;
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June
30, 2000 and September 30, 2000; and
o Current Reports on Form 8-K dated February 14, 2000, June 15, 2000 and
July 5, 2000.
We will provide to each person, including any beneficial owner of Notes,
to whom a copy of this prospectus supplement and the accompanying prospectus is
delivered, a copy of any or all of the information that has been incorporated by
reference in this prospectus supplement and the accompanying prospectus but not
delivered with this prospectus supplement and the accompanying prospectus. We
will deliver this information upon written or oral request and provide this
information at no cost to the requester. You should direct your requests to:
Mr. G. C. Dean
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
(614) 223-1000
THE COMPANY
We are a public utility engaged in the production, purchase, transmission,
distribution and sale of electricity to approximately 491,000 retail customers
in eastern and southwestern Oklahoma. Our principal executive offices are
located at 212 East 6th Street, Tulsa, Oklahoma 74119 (telephone number
918-599-2000). We are a subsidiary of American Electric Power Company, Inc., a
public utility holding company, and we are a part of the American Electric Power
integrated utility system. The executive offices of American Electric Power are
located at 1 Riverside Plaza, Columbus, Ohio 43215 (telephone number
614-223-1000).
USE OF PROCEEDS
We estimate the net proceeds from the sale of the Notes will be
approximately $105,735,00. We will use the net proceeds for the repayment of a
portion of outstanding short-term indebtedness. At November 1, 2000,
approximately $131,300,000 of short-term indebtedness was outstanding, with a
blended interest rate of 6.84%. If we do not use the net proceeds immediately,
we may temporarily invest them in short-term interest-bearing obligations.
DESCRIPTION OF NOTES
The Notes are a separate series of the Senior Notes described in the
accompanying prospectus. You should read the prospectus for a detailed summary
of additional provisions of the Notes and of the Indenture under which the Notes
are issued. The description of the Notes below supplements the description of
the Senior Notes contained in the prospectus. If the descriptions are
inconsistent, this prospectus supplement controls. The following summary and the
description set forth in the accompanying prospectus do not purport to be
complete and are subject to, and qualified in their entirety by, all provisions
of the Indenture. Capitalized terms used but not defined in this prospectus
supplement have the meanings given to them in the prospectus.
General
The Notes will constitute a series of our Senior Notes, and are to be
issued under our Indenture dated as of November 1, 2000, between us and The Bank
of New York, as trustee. The aggregate principal amount of the Notes offered
hereby is limited to $106,000,000, but the Indenture does not limit the amount
of other Senior Notes that we may issue. The Notes will mature on November 21,
2002, the maturity date. The Notes are not entitled to the benefit of any
sinking fund, and may be redeemed at our option only under the circumstances
described below under "--Optional Redemption." The Indenture permits the
defeasance of the Notes upon satisfaction of the conditions described under
"Description of the Senior Notes--Defeasance" in the accompanying prospectus.
We will issue the Notes in fully registered form in denominations of
$1,000 and in $1,000 increments above $1,000. The Bank of New York, the trustee
under the Indenture, will register transfers and exchanges of the Notes.
Principal on the Notes will be payable at the Trustee's corporate trust office
at 101 Barclay Street, New York, New York 10286. We will initially issue the
Notes in global form. Please refer to "--Global Securities" in this prospectus
supplement and "Description of the Senior Notes--Book-Entry Only System" in the
accompanying prospectus.
Except to the extent otherwise provided below under "--Interest", if any
principal, interest or other payment to be made in respect of the Notes would be
due on a day that is not a business day (as defined below), payment may be made
on the next day that is a business day, with the same effect as if payment were
made on the due date.
Interest
The Notes will bear interest at LIBOR plus 0.625%. We will pay interest
quarterly in arrears on February 21, May 21, August 21 and November 21 of each
year (each an "interest payment date"), beginning February 21, 2001, and on the
maturity date. If any of the quarterly interest payment dates listed above falls
on a day that is not a business day, we will postpone the payment of interest to
the next succeeding business day unless that business day is in the next
succeeding calendar month, in which case interest will be paid on the
immediately preceding business day. If we pay principal and interest on the next
succeeding business day, we will consider that payment as being made on the date
that the payment is due to you. Accordingly, no interest will accrue on the
payment for the period from and after the interest payment date or the maturity
date to the date we make the payment to you on the next succeeding business day.
Interest on the Notes will be computed on the basis of a 360 day year for the
actual number of days elapsed.
Interest on the Notes will accrue from, and including, November 21, 2000,
to, and excluding, the first interest payment date and then from, and including,
the immediately preceding interest payment date to which interest has been paid
or duly provided for to, but excluding, the next interest payment date or the
maturity date, as the case may be. We will refer to each of these periods as an
"interest period." You can calculate the amount of accrued interest that we will
pay for any interest period by multiplying the face amount of the Notes by the
interest rate applicable for the interest period divided by 360 days and
multiplied by the number of days in the interest period.
So long as the payment of interest is not in arrears, we will pay the
interest payable for any interest payment date to the person in whose name the
note is registered at the close of business on the fifteenth calendar day,
whether or not a business day, immediately preceding the interest payment date.
However, we will pay interest on the maturity date or on a redemption date to
the person to whom the principal will be payable.
When we use the term "business day," we mean any day except a Saturday, a
Sunday or a legal holiday in The City of New York on which banking institutions
are authorized or required by law, regulation or executive order to close;
provided, that the day is also a London business day. "London Business Day"
means a day other than a Saturday or Sunday that is not a day on which banking
institutions in London, England and New York, New York are authorized or
obligated by law or executive order to be closed and a day on which dealings in
deposits in U. S. dollars are transacted, or with respect to any future date are
expected to be transacted, in the London interbank market.
The calculation agent appointed by us, initially The Bank of New York,
will calculate the interest rate on the Notes. The interest rate will be equal
to LIBOR plus 0.625%. The interest rate in effect for the period from November
21, 2000 to, but excluding, February 21, 2001, the initial interest reset date,
will be LIBOR, as determined on November 17, 2000, plus 0.625%. The calculation
agent will reset the interest rate on each interest payment date, each of which
we will refer to as an "interest reset date." The second London business day
preceding an interest reset date will be the "interest determination date" for
that interest reset date. The interest rate in effect on each day that is not an
interest reset date will be the interest rate determined as of the interest
determination date pertaining to the immediately preceding interest reset date.
The interest rate in effect on any day that is an interest reset date will be
the interest rate determined as of the interest determination date pertaining to
that interest reset date, except that the interest rate in effect for the period
from and including November 21, 2000 to the first interest reset date will be
the initial interest rate.
The calculation agent will determine "LIBOR" in accordance with the
following provisions:
(i) With respect to any interest determination date, LIBOR will be the
offered rate for deposits in United States dollars having an index maturity of
three months commencing on the first day of the applicable interest period in
amounts of not less than $1,000,000, as that rate appears on Telerate Page 3750
as of 11:00 A.M., London time, on that interest determination date. If no rate
appears, LIBOR, in respect to that interest determination date, will be
determined in accordance with the provisions described in (ii) below.
(ii) With respect to an interest determination date on which no rate
appears on Telerate Page 3750, as specified in (i) above, the calculation agent
will request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the calculation agent, to provide
the calculation agent with its offered quotation for deposits in United States
dollars of not less than $1,000,000 for the period of three months, commencing
on the first day of the applicable interest period, to prime banks in the London
interbank market at approximately 11:00 A.M., London time, on that interest
determination date and in a principal amount that is representative for a single
transaction in United States dollars in that market at that time. If at least
two quotations are provided, then LIBOR on that interest determination date will
be the arithmetic mean of those quotations. If fewer than two quotations are
provided, then LIBOR on the interest determination date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M., in The City of New York,
on the interest determination date by three major banks in The City of New York
selected by the calculation agent for loans in United States dollars to leading
European banks, having a three-month maturity and in a principal amount that is
representative for a single transaction in United States dollars in that market
at that time; provided, however, that if all of the banks selected by the
calculation agent are not providing quotations in the manner described by this
sentence, LIBOR determined as of that interest determination date will be LIBOR
in effect on that interest determination date.
"Telerate Page 3750" means the display designated on page 3750 on Dow
Jones Markets Limited (or such other page as may replace the 3750 page on that
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for U.
S. dollar deposits).
The accrued interest for any period is calculated by multiplying the
principal amount of a Note by an accrued interest factor. The accrued interest
factor is computed by adding the interest factor calculated for each day in the
period to the date for which accrued interest is being calculated. The interest
factor (expressed as a decimal rounded upwards if necessary) is computed by
dividing the interest rate (expressed as a decimal rounded upwards if necessary)
applicable to such date by 360.
All percentages resulting from any calculation of the interest rate on
Notes will be rounded, if necessary, to the nearest one-hundred thousandth of a
percentage point, with five one-millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and
9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)), and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upwards).
Optional Redemption
We may redeem all or part of the Notes from time to time on any interest
payment date on or after November 21, 2001 at our option, upon not less than 30
nor more than 60 days' notice, at a redemption price equal to the principal
amount of the Notes to be redeemed plus interest accrued to the redemption date.
Global Securities
When the Notes are initially issued, one or more global securities (the
"Global Securities") will represent the Notes. These Global Securities will have
an aggregate principal amount equal to that of the Notes they represent. Each
Global Security will be deposited with, or on behalf of, DTC, as depository (the
"Depositary"), and registered in the name of Cede & Co., a nominee of the
Depositary. The Global Securities will bear legends stating the restrictions on
exchanges and registration of transfer referred to below and any other matters
provided for by the Indenture.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of section 17A of the Securities
Exchange Act of 1934. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers (including each of the underwriters set forth below), banks,
trust companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own the Depositary. Access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodian
relationship with a participant, either directly or indirectly.
As long as the Depositary, or its nominee, is the registered holder of a
Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Notes
represented thereby for all purposes under the Notes and the Indenture. Except
in limited circumstances, owners of beneficial interests in a Global Security
(1) will not be entitled to have such Global Security or any Notes represented
by the Global Security registered in their names, (2) will not receive or be
entitled to receive physical delivery of certificated Notes in exchange for the
Global Security and (3) will not be considered to be the owners or holders of
such Global Security or any Notes represented by the Global Security for any
purpose under the Notes or the Indenture. Payments of principal of and interest
on a Global Security will be made to the Depositary or its nominee, as the case
may be, as the holder thereof. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. These laws may impair the ability of holders to transfer
beneficial interests in a Global Security.
Institutions that have accounts with the Depositary or its nominee
("participants") and persons that may hold beneficial interests through
participants are the only holders who may own beneficial interests in a Global
Security. In connection with the issuance of any Global Security, the Depositary
will credit, on its book-entry registration and transfer system, the respective
principal amounts of Notes represented by the Global Security to the accounts of
its participants. Ownership of beneficial interests in a Global Security will be
shown only on, and the transfer of those ownership interests will occur only
through, records maintained by the Depositary (with respect to participants'
interests) or any such participant (with respect to interests of persons held by
such participants on their behalf). Payments, transfers, exchanges, notices and
other matters relating to beneficial interests in a Global Security may be
subject to various policies and procedures adopted by the Depositary. Neither we
nor the trustee, the calculation agent, any paying agent, or the security
registrar or any of their respective agents will have any responsibility or
liability (1) for any aspect of the Depositary's or any participant's records
relating to, or for payments or notices on account of, beneficial interests in a
Global Security or (2) for maintaining, supervising or reviewing any records
relating to such beneficial interests.
Events of Default
An Event of Default with respect to any series of Senior Notes is defined
in the Senior Note Indenture as being any one of the following:
(1) failure to pay interest on the Senior Notes of that series for 30
days after payment is due;
(2) failure to pay principal or any premium on the Senior Notes of that
series for 3 days after payment is due;
(3) failure to perform other covenants in the Senior Note Indenture after
90 days after we are given written notice;
(4) failure to pay any sinking fund installment for 3 days after payment
is due;
(5) certain events of bankruptcy, insolvency, reorganization,
receivership or liquidation relating to us.
Certain Notices
With respect to any Notes represented by a Global Security, notices to be
given to the holders of the Notes will be deemed to have been duly given to the
holders when given to DTC, or its nominee, in accordance with DTC's policies and
procedures. We believe that DTC's practice is to inform its participants of any
such notice it receives in accordance with its policies and procedures. Persons
who hold beneficial interests in the Notes through DTC or its direct or indirect
participants may wish to consult with them about how notices and other
communications relating to the Notes may be given and received through the
facilities of DTC. Neither we nor the calculation agent or the trustee will have
any responsibility with respect to those policies and procedures or for any
notices or other communications among DTC, its direct and indirect participants
and the beneficial owners of the Notes in global form.
With respect to Notes not represented by a Global Security, other notices
to be given to the holders of the Notes will be deemed to have been duly given
to the holders upon the mailing of such notices to the holders at their
respective addresses as they appear on the security register maintained by us or
our agent as of the close of business before the day notice is given.
Neither the failure to give any notice nor any defect in any notice given
to a particular holder will affect the sufficiency of any notice given to
another holder.
UNDERWRITING
We and the underwriters named below have entered into an underwriting
agreement with respect to the Notes. Subject to certain conditions, each
underwriter has agreed severally to purchase from us the principal amount of
Notes indicated in the following table:
Principal
Amount
Underwriters of Notes
UBS Warburg LLC................... $56,000,000
ABN AMRO Incorporated............. 30,000,000
TD Securities (USA) Inc........... 20,000,000
Total ............................ $106,000,000
Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
Notes sold by the underwriters to securities dealers may be sold at a discount
from the initial public offering price of up to 0.15% of the principal amount of
Notes. Any such securities dealers may resell any Notes purchased from the
underwriters to certain other brokers or dealers at a discount from the initial
public offering price of up to 0.10% of the principal amount of Notes. If all
the Notes are not sold at the initial offering price, the underwriters may
change the offering price and the other selling terms.
The Notes are a new issue of securities with no established trading
market. The underwriters have advised us that they intend to make a market in
the Notes but are not obligated to do so and may discontinue market making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for the Notes.
In connection with this offering, the underwriters may purchase and sell
Notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater principal
amount of Notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the Notes while the
offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because UBS Warburg LLC, acting on behalf of the
underwriters, has repurchased Notes sold by or for the account of such
underwriter in a stabilizing or short covering transaction.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
We estimate that our total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $124,000.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
Certain of the underwriters and their affiliates may engage in
transactions with, or perform services for, us and our affiliates in the
ordinary course of business.
LEGAL OPINIONS
Our counsel, Simpson Thacher & Bartlett, New York, NY, and one of our
lawyers will each issue an opinion about the legality of the notes for us. Dewey
Ballantine LLP, New York, NY will issue an opinion for the agents or
underwriters. From time to time, Dewey Ballantine LLP acts as counsel to our
affiliates for some matters.
PROSPECTUS
PUBLIC SERVICE COMPANY OF OKLAHOMA
$200,000,000
SENIOR NOTES
Public Service Company of Oklahoma produces, purchases, transmits,
distributes and sells electricity to approximately 491,000 retail customers in
eastern and southwestern Oklahoma. We are a wholly-owned subsidiary of Central
and South West Corporation, a Dallas-based diversified utility holding company.
We intend to offer from time to time in one or more series up to
$200,000,000 of debentures, notes or other types of senior unsecured debt
securities known as Senior Notes.
When we offer a particular series of Senior Notes, we will prepare and
issue a supplement to this prospectus setting forth the particular terms of the
offered Senior Notes, including the amounts, prices and other terms of the
series. Each supplement is called a prospectus supplement. You should read this
prospectus and any prospectus supplement carefully before you make any decision
to invest in the Senior Notes.
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor have any of these
organizations determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
We may offer the Senior Notes directly or through underwriters, agents or
dealers. Each prospectus supplement will provide the terms of the plan of
distribution relating to the respective series of Senior Notes. "Plan of
Distribution" below also provides more information on this topic.
The date of this prospectus is March 31, 2000.
WHERE YOU CAN FIND MORE INFORMATION
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, utilizing a "shelf" registration
process. Under this shelf process, we may sell the Senior Notes described in
this prospectus in one or more offerings up to a total dollar amount of
$200,000,000. This prospectus provides a general description of the Senior Notes
being offered. Each time we sell a series of Senior Notes we will provide a
prospectus supplement containing specific information about the terms of that
series of Senior Notes and the related offering. It is important for you to
consider the information contained in this prospectus and the related prospectus
supplement together with additional information described under the heading
"Documents Incorporated by Reference" in making your investment decision.
We are subject to the informational requirements of the Securities Act of
l934, and therefore we file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy the
registration statement, with exhibits, as well as the reports and other
information we file with the SEC, at the SEC's public reference facilities at
its principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and its regional offices at Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, Suite 1300, New York, New York 10048. You may obtain information on the
operation of the SEC's public reference facilities and how to request documents
by calling 1-800-SEC-0330. Information we file is also available at the SEC's
Internet site at http://www.sec.gov. You can also obtain these materials at set
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.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone to
provide you with different information. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents. This prospectus
does not constitute an offer to sell or a solicitation of an offer to buy the
Senior Notes in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. Information incorporated by reference is
considered to be part of this prospectus. Later information that we file with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all the Senior Notes.
o Annual Report on Form 10-K for the year ended December 31, 1999; and
o Current Report on Form 8-K dated February 14, 2000.
We will provide to each person, including any beneficial owner of Senior
Notes, to whom a copy of this prospectus is delivered, a copy of any or all of
the information that has been incorporated by reference in this prospectus but
not delivered with this prospectus. We will deliver this information upon
written or oral request and provide this information at no cost to the
requester. You should direct your requests to:
Ms. Ellen Whalen
Manager of Investment Services
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
(214) 777-1000
REPORTS TO HOLDERS OF SENIOR NOTES
We are not required to furnish annual and quarterly reports to holders of
Senior Notes. Our annual report on Form 10-K contains audited financial
statements which we will provide to holders of Senior Notes upon request.
FORWARD-LOOKING STATEMENTS
We make statements in this prospectus, any prospectus supplement and the
documents we incorporate by reference that are considered forward-looking
statements within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Sometimes these statements will contain words such as
"believes," "expects," "intends," "plans" and other similar words. These
statements are not guarantees of our future performance and are subject to
risks, uncertainties and other important factors that could cause our actual
performance or achievements to be materially different from those we project.
These risks, uncertainties and factors include:
o general economic, business and regulatory conditions;
o the impact of Central and South West Corporation's proposed merger with
American Electric Power, including any regulatory conditions imposed on
the merger;
o energy cost, supply and demand;
o federal and state regulatory initiatives that increase competition;
o federal and state regulatory developments and changes in law;
o availability, terms and use of capital;
o environmental issues;
o weather; and
o industry restructuring and cost recovery.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents we incorporate by reference
for more information on these factors. These forward-looking statements
represent our estimates and assumptions only as of the date of this prospectus.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
PROSPECTUS SUMMARY
This summary does not contain all the information that may be important to
you. You should read the entire prospectus, the prospectus supplement, and the
documents, financial statements and other information incorporated by reference
in the prospectus carefully before making an investment decision.
The Offering
Issuer....................Public Service Company of Oklahoma
Securities Offered........Senior Notes
Aggregate Principal Amount Up to $200,000,000
Interest Payment Dates....On dates to be determined
Maturity Date.............To be determined
Redemption................To be determined
Ranking...................The Senior Notes are our senior unsecured notes
ranking equally with any of our other unsecured
indebtedness that is not specifically subordinated
to the Senior Notes. The Senior Notes are
subordinate to $300 million of our outstanding first
mortgage bonds which are secured by a mortgage on
substantially all of our properties. The Senior
Notes are also subordinate to $30 million of our
outstanding medium-term notes, Series A, which are
secured by first mortgage bonds so long as other
series of first mortgage bonds remain outstanding.
The Senior Notes rank junior to the first mortgage
bonds and our medium-term notes with respect to
rights in and to such mortgaged property. We may in
the future issue additional series of first mortgage
bonds and medium-term notes.
Use of Proceeds.......... We will use the net proceeds from the sale
of the Senior Notes to repay a portion of our
long-term debt, all or a portion of our short-term
borrowings, and for other general corporate purposes.
The Company
Business..................We are a public utility engaged in the production,
purchase, transmission, distribution and sale of
electricity.
Service Area ............ Our service area includes approximately 30,000
square miles in portions of eastern and southwestern
Oklahoma.
Population of Service Area Approximately 1,113,000
Customers Approximately 491,000
SELECTED FINANCIAL INFORMATION
We have derived the summary selected financial data set forth below for
the years ended December 31, 1997, 1998 and 1999 from our financial statements.
Arthur Andersen LLP, independent public accountants, have audited the financial
statements for the three-year period ended December 31, 1999 and the reports of
Arthur Andersen LLP thereon are incorporated by reference in this prospectus.
You should read the information presented below in conjunction with the
historical financial statements and notes thereto contained in our 1999 Annual
Report on Form 10-K which is incorporated by reference in this prospectus.
(Dollar amounts in thousands)
Year Ended December 31,
1999 1998 1997
---- ---- ----
Operating Revenues... $ 749,390 $ 780,159 $ 712,690
Operating Income..... $ 99,810 $ 115,008 $ 81,776
Net Income for Common $ 62,392 $ 76,630 $ 50,053
Stock................
Net Utility Plant.... $1,345,450 $1,309,641 $1,308,586
Capitalization at
December 31, 1999
Actual %
Long-Term Debt........................ $364,516 40
Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust
Holding Solely Junior Subordinated Debentures 75,000 8
Preferred Stock ...................... 5,286 0
Common Equity ........................ 479,248 52
Total ............................ $924,050 100
Short-Term Debt ...................... $ 79,169 +
Long-Term Debt and Preferred Stock
Currently Maturing $ 20,000 +
PUBLIC SERVICE COMPANY OF OKLAHOMA
We are a public utility company engaged in the production, purchase,
transmission, distribution and sale of electricity in eastern and southwestern
Oklahoma. We serve approximately 491,000 retail customers in our service
territory. Central and South West Corporation, a registered public utility
holding company under the Public Utility Holding Company Act of 1935, as
amended, owns all of our issued and outstanding common stock . Our executive
offices are located at 212 East Sixth Street, Tulsa, Oklahoma 74119-1212,
telephone number (918) 599-2000.
RATIOS OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for each of the years ended
December 31, 1995 through 1999 are as follows:
Year Ended December 31,
-----------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges(1) 3.39 4.21 2.68 2.45 4.32
----------------------
(1) For purposes of computing the ratios: (i) earnings consist of operating
income plus federal income taxes, deferred income taxes and investment tax
credits, other income and deductions, allowance for funds (both borrowed and
equity) used during construction and interest portion of financing leases, and
(ii) fixed charges consist of interest on long-term debt and short-term debt,
and other interest charges and interest portion of financing leases.
USE OF PROCEEDS
We plan to use the net proceeds from the sale of the Senior Notes to repay
a portion of our long-term debt, all or a portion of our short-term borrowings
and for other general corporate purposes, subject to applicable regulatory
requirements. If we do not use the net proceeds immediately, we may temporarily
invest them in short-term, interest-bearing obligations.
DESCRIPTION OF THE SENIOR NOTES
General. We will issue Senior Notes under a Senior Note Indenture between
us and the Senior Note Trustee, The Bank of New York, a New York banking
corporation. We have summarized selected provisions of the Senior Note Indenture
below. This is a summary and is not complete. It does not describe all
exceptions and qualifications contained in the Senior Note Indenture. You should
read the Senior Note Indenture we filed as an exhibit to the registration
statement. In the summary below, we have included references to section numbers
of the Senior Note Indenture so that you can locate the summarized provisions.
Capitalized terms not defined in this prospectus have the meanings given to them
in the Senior Note Indenture.
There is no requirement under the Senior Note Indenture that future issues
of our debt securities be issued under the Senior Note Indenture. We will be
free to use other indentures or documentation, containing provisions different
from those included in the Senior Note Indenture or applicable to one or more
issues of Senior Notes, in connection with future issues of other debt
securities.
The Senior Note Indenture does not limit the aggregate principal amount of
the Senior Notes that we may issue under the Senior Note Indenture. The Senior
Note Indenture provides that the Senior Notes will be issued in one or more
series. The Senior Notes may be issued at various times and may have differing
maturity dates and may bear interest at differing rates. The prospectus
supplement applicable to each issue of Senior Notes will specify:
(1) the title of the Senior Notes;
(2) any limit on the aggregate principal amount of the Senior Notes;
(3) the person to whom any interest on the Senior Notes shall be payable,
if other than the person in whose name the Senior Notes are registered at the
close of business on the regular Record Date;
(4) the dates or dates on which the principal of the Senior Notes will
be payable or how the date or dates will be determined;
(5) the rate or rates at which the Senior Notes will bear interest, or
how the rate or rates will be determined and the date or dates from which
interest will accrue;
(6) the dates on which interest will be payable;
(7) the record dates for payments of interest;
(8) the place or places, if any, in addition to the office of the
Trustee, where the principal of, and premium, if any, and interest, if any, on
the Senior Notes will be payable;
(9) the period or periods within which the price or prices at which and
the terms and conditions upon which the Senior Notes may be repaid, in whole or
in part, at the option of the Holder thereof;
(10) any sinking fund or other provisions or options held by Holders of
the Senior Notes that would obligate us to repurchase or redeem the Senior
Notes;
(11) the percentage, if less than 100% of the principal amount of the
Senior Notes that will be payable if the maturity of the Senior Notes is
accelerated;
(12) any changes or additions to the events of default under the Senior
Note Indenture or changes or additions to our covenants under the Senior Note
Indenture;
(13) any collateral, security, assurance or guarantee for the Senior
Notes; and
(14) any other specific terms applicable to the Senior Notes.
Unless we otherwise indicate in the applicable prospectus supplement, the
Senior Notes will be denominated in United States currency in minimum
denominations of $1,000 and multiples of $1,000.
Unless we otherwise indicate in the applicable prospectus supplement,
there are no provisions in the Senior Note Indenture or the Senior Notes that
require us to redeem, or permit the Holders to cause a redemption of, the Senior
Notes or that otherwise protect the Holders in the event that we incur
substantial additional indebtedness, whether or not in connection with a change
in control of our company. However, any change in control transaction that
involves the incurrence of additional long-term indebtedness, as notes or
otherwise, by us in such a transaction may require approval of state utility
regulatory authorities and, possibly, of federal utility regulatory authorities.
Our management believes that such approvals would be uncertain in any
transaction that would result in us, or our successor, having a highly leveraged
capital structure.
Registration, Transfer, Exchange and Form. Senior Notes of any series will
be exchangeable for other Senior Notes of the same series of any authorized
denominations and of a like aggregate principal amount and tenor.
(Section 305)
Unless we otherwise indicate in the applicable prospectus supplement,
Senior Notes may be presented for registration of transfer, duly endorsed or
accompanied by a duly executed written instrument of transfer, at the office or
agency maintained for such purpose, without service charge except for
reimbursement of taxes and other governmental charges as described in the Senior
Note Indenture. (Section 305)
In the event of any redemption of Senior Notes of any series, the Senior
Note Trustee will not be required to exchange or register a transfer of any
Senior Notes of the series selected, called or being called for redemption
except the unredeemed portion of any Senior Note being redeemed in part.
(Section 305)
Book-Entry Only System. The following discussion pertains to Senior
Notes that are issued in book-entry only form.
One or more global notes would be issued to DTC, The Depository Trust
Company, or its nominee. DTC would keep a computerized record of its
participants (for example, your broker) whose clients have purchased the Senior
Notes. The participant would then keep a record of its clients who purchased the
Senior Notes. A global note may not be transferred, except that DTC, its
nominees and their successors may transfer an entire global note to one another.
Under book-entry only, we will not issue certificates to individual
holders of the Senior Notes. Beneficial interests in global notes will be shown
on, and transfers of global notes will be made only through, records maintained
by DTC and its participants.
DTC has advised us that it is:
(1) a limited-purpose trust company organized under the New York Banking
Law;
(2) a "banking organization" within the meaning of the New York Banking
Law;
(3) a member of the Federal Reserve System;
(4) a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
(5) a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934.
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among direct participants of securities transactions,
such as transfers and pledges, in deposited securities through computerized
records for direct participants' accounts. This eliminates the need to exchange
certificates. Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
direct participant. The rules that apply to DTC and its participants are on file
with the SEC.
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.
We will wire principal and interest payments to DTC's nominee. We and the
Senior Note Trustee will treat DTC's nominee as the owner of the global notes
for all purposes. Accordingly, we and the Senior Note Trustee will have no
direct responsibility or liability to pay amounts due on the Senior Notes to
owners of beneficial interests in the global notes.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit direct participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global notes as
shown on DTC's records as of the record date for such payment. In addition, it
is DTC's current practice to assign any consenting or voting rights to direct
participants whose accounts are credited with securities on a record date, by
using an omnibus proxy. Payments by participants to owners of beneficial
interests in the global notes, and voting by participants, will be governed by
the customary practices between the participants and owners of beneficial
interests, as is the case with securities held for the account of customers
registered in "street name." However, these payments will be the responsibility
of the participants and not of DTC, the Senior Note Trustee, or us.
Senior Notes represented by a global note would be exchangeable for Senior
Note certificates with the same terms in authorized denominations only if:
(1) DTC notifies us that it is unwilling or unable to continue as
depository or if DTC ceases to be a clearing agency registered under applicable
law; or
(2) we instruct the Senior Note Trustee that the global note is now
exchangeable; or
(3) an event of default has occurred and is continuing.
According to the DTC, the foregoing information with respect to DTC has
been provided to the financial community for informational purposes only and is
not intended to serve as a representation, warranty, or contract modification of
any kind.
Paying Agents. We will maintain an office or agency where Senior Notes may
be presented or surrendered for payment. We will give prompt written notice to
the Senior Note Trustee of the location, and any change in the location of the
office or agency. If at any time we fail to maintain any required office or
agency or fail to furnish the Senior Note Trustee with the address, any
presentations and surrenders may be made or served at the corporate trust office
of the Senior Note Trustee, and the Senior Note Trustee shall act as our agent
to receive all presentations and surrenders.
(Section 1002)
All monies we pay to a paying agent for the payment of principal of,
interest or premium, if any, on any Senior Note which remain unclaimed at the
end of two years after the principal, interest or premium shall have become due
and payable will be repaid to us. The Holder of the Senior Note will thereafter
look only to us for payment. (Section 1003)
Consolidation, Merger, Conveyance, Sale or Transfer. Unless otherwise
provided in a supplemental indenture and described in a prospectus supplement,
we may consolidate or merge with any Person or transfer our properties and
assets substantially as an entirety to any Person provided that:
(1) the successor is a Person organized and existing under the laws of
the United States or any State or the District of Columbia; and
(2) the successor expressly assumes by a supplemental indenture the due
and punctual payment of the principal of, and premium, if any, and interest, if
any, on all the Senior Notes and the performance of every covenant of the Senior
Note Indenture that we would otherwise have to perform. (Section 801)
Limitation on Liens. If this covenant is made applicable to the Senior
Notes of any particular series, we have agreed that we will not, nor will we
permit any of our subsidiaries to, issue, assume or guarantee any notes, bonds,
debentures or other similar evidences of indebtedness for borrowed money
(collectively referred to as "debt") secured by a mortgage, lien, pledge,
security interest or other encumbrance (a "lien") on or with respect to any of
our properties or assets or assets or properties of our subsidiaries unless we
make effective a provision under which the Senior Notes of that series are
secured equally and ratably with any and all borrowed money that we secure. This
restriction will not, however, apply to the following:
(1) liens in existence on the date of the original issue of the Senior
Notes to which this restriction is made applicable;
(2) liens created solely for the purpose of securing debt incurred to
finance, refinance or refund the purchase price or cost, including the cost of
construction, of property acquired after the date hereof, by purchase,
construction or otherwise, or liens in favor of guarantors of obligations or
debt representing, or incurred to finance, refinance or refund, such purchase
price or cost, provided that no such lien shall extend to or cover any property
other than the property so acquired and improvements thereon;
(3) liens which secure only indebtedness owing by any of our
subsidiaries, to one or more of our subsidiaries, or to us and one or more of
our subsidiaries;
(4) liens on any property or assets acquired from a Person which is merged
with or into us or any subsidiary, or any liens on the property or assets of any
corporation or other entity existing at the time such corporation or other
entity becomes a subsidiary and, in either case, is not created as a result of
or in connection with or in anticipation of any such transaction, unless liens
were created to secure or provide the payment of any part of the purchase price
of such corporation;
(5) any lien on any property or assets existing at the time of acquisition
thereof and which is not created as a result of or in connection with or in
anticipation of such acquisition, unless the lien was created to secure or
provide for the payment of any part of the purchase price of such property or
assets; or
(6) any extension, renewal or replacement of any lien referred to in the
foregoing clauses (1) through (5), provided that the principal amount of debt so
secured thereby shall not exceed the principal amount of debt so secured at the
time of such extension, renewal or replacement, and that such extension, renewal
or replacement lien shall be limited to all or part of substantially the same
property which secured the lien extended, renewed or replaced, plus improvements
on such property.
Notwithstanding the foregoing, we and one or more of our subsidiaries may
issue, assume or guarantee debt secured by liens which would otherwise be
subject to the foregoing restrictions in an aggregate principal amount which,
together with the aggregate outstanding principal amount of all of our other
debt which would otherwise be subject to the foregoing restrictions, not
including debt permitted to be secured under clauses (1) through (6) above, does
not at the time of issuance, assumption or guarantee thereof exceed twenty
percent of the Net Tangible Assets.
Net Tangible Assets is defined as the total of all assets, including
revaluations thereof as a result of commercial appraisals, price level
restatement or otherwise, appearing on our and our subsidiaries' balance sheet,
net of applicable reserves and deductions, but excluding goodwill, trade names,
trademarks, patents, unamortized debt discount and all other like intangible
assets, which term shall not be construed to include such revaluations, less the
aggregate of our and our subsidiaries' current liabilities appearing on such
balance sheet. The following types of transactions, among others, shall not be
deemed to create debt secured by liens: Liens required by any contract or
statute in order to permit us or our subsidiaries to perform any contract or
subcontract made by us with or at the request of a governmental entity or any
department, agency or instrumentality thereof, or to secure partial, progress,
advance or any other payments to us or any of our subsidiaries by such
governmental unit pursuant to the provisions of any contract or statute.
(Section 1007)
Modification of the Senior Note Indenture. Under the Senior Note Indenture
or any supplemental indenture, our rights and the rights of the Holders of
Senior Notes may be changed with the consent of the Holders of a majority in
principal amount of the outstanding Senior Notes, of all series affected by the
change, voting as one class, provided that the following changes may not be made
without the consent of the Holders of each outstanding Senior Note affected
thereby:
(1) change the fixed date upon which the principal of or the interest on
any Senior Note is due and payable, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable upon the redemption thereof,
or reduce the amount of the principal of an Original Issue Discount Security
that would be payable upon a declaration of acceleration of the maturity
thereof, or change any place of payment where, or the currency in which, any
Senior Note or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any payment on or after the date
such payment is due or, in the case of redemption, on or after the date fixed
for such redemption (the "Redemption Date");
(2) reduce the stated percentage of Senior Notes, the consent of the
Holders of which is required for any modification of the applicable Senior Note
Indenture or for waiver by the Holders of certain of their rights; or
(3) modify certain provisions of the Senior Note Indenture. (Section
902)
An Original Issue Discount Security means any security authenticated and
delivered under the Senior Note Indenture which provides for an amount less than
the principal amount thereof to be due and payable upon the declaration of
acceleration of the maturity thereof.
The Senior Note Indenture also contains provisions permitting us and the
Senior Note Trustee to amend the Senior Note Indenture in certain circumstances
without the consent of the Holders of any Senior Notes to evidence a merger, the
replacement of the Senior Note Trustee and for certain other purposes.
Events of Default. An Event of Default with respect to any series of
Senior Notes is defined in the Senior Note Indenture as being any one of the
following:
(1) failure to pay interest on the Senior Notes of that series for 30
days after payment is due;
(2) failure to pay principal or any premium on the Senior Notes of that
series when due;
(3) failure to perform other covenants in the Senior Note Indenture after
90 days after we are given written notice;
(4) failure to pay any sinking fund installment when due;
(5) certain events of bankruptcy, insolvency, reorganization,
receivership or liquidation relating to us. (Section 501)
An Event of Default regarding a particular series of Senior Notes does not
necessarily constitute an Event of Default for any other series of Senior Notes.
We will be required to file with the Senior Note Trustee annually an
officers' certificate as to the absence of default in performance of certain
covenants in the Senior Note Indenture. (Section 1008) The Senior Note Indenture
provides that the Senior Note Trustee may withhold notice to the Holders of the
Senior Notes of any default, except in payment of principal of, or premium, if
any, or interest on, the Senior Notes or in the payment of any sinking fund
installment with respect to the Senior Notes, if the Senior Note Trustee in good
faith determines that it is in the interest of the Holders of the Senior Notes
to do so. (Section 602)
The Senior Note Indenture provides that, if an Event of Default with
respect to the Senior Notes specified therein shall have happened and be
continuing, either the Senior Note Trustee or the Holders of 33% or more in
aggregate principal amount of the Senior Notes may declare the principal amount
of all the Senior Notes to be due and payable immediately. However, if we shall
cure all defaults and certain other conditions are met, such declaration may be
annulled and past defaults may be waived by the Holders of a majority in
aggregate principal amount of the Senior Notes. (Section 502)
Subject to the provisions of the Senior Note Indenture relating to the
duties of the Senior Note Trustee, the Senior Note Trustee will be under no
obligation to exercise any of its rights or powers under the Senior Note
Indenture at the request or direction of any of the Holders of the Senior Notes,
unless the Holders shall have offered to the Senior Note Trustee reasonable
indemnity. (Section 603)
Subject to the provision for indemnification, the Holders of a majority in
principal amount of the Senior Notes will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Note Trustee, or exercising any trust or power conferred on the Senior
Note Trustee with respect to the Senior Notes. However, the Senior Note Trustee
shall have the right to decline to follow any direction if the Senior Note
Trustee shall determine that the action so directed conflicts with any law or
the provisions of the Senior Note Indenture or if the Senior Note Trustee shall
determine that the action would be prejudicial to Holders not taking part in the
direction. (Section 512)
Defeasance. We may elect either (a) to be discharged from all of our
obligations with respect to the Senior Notes, except for obligations to register
the transfer or exchange of Senior Notes, replace stolen, lost or mutilated
Senior Notes, to maintain paying agencies and to hold moneys for payment in
trust, or (b) to be discharged from our obligations under sections of the Senior
Note Indenture described under "Consolidation, Merger, Conveyance, Sale or
Transfer" and "Limitation of Liens" or to certain covenants relating to
corporate existence and maintenance of properties and insurance, in each case,
if:
(1) we deposit with the Senior Note Trustee, in trust, money, or in
certain cases, U.S. Government Obligations sufficient to pay and discharge (i)
the principal of, and premium, if any, and interest, if any, on the outstanding
Senior Notes on the dates such payments are due, in accordance with the terms of
the Senior Notes and (ii) any mandatory sinking fund payments applicable to the
Senior Notes on the day on which payments are due and payable in accordance with
the terms of the Senior Note Indenture and of the Senior Notes;
(2) no Event of Default or event which with notice or lapse of time would
become an Event of Default, including by reason of such deposit, with respect to
the Senior Notes shall have occurred and be continuing on the date of such
deposit;
(3) we deliver to the Senior Note Trustee an opinion of counsel to the
effect (i) that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance of certain
obligations; (ii) that such provision would not cause any outstanding Senior
Notes then listed on any national securities exchange to be delisted as a result
thereof; and (iii) that the defeasance trust is not, or is registered as, an
investment company under the Investment Company Act of 1940; and
(4) we have delivered to the Senior Note Trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent provided
for in the Senior Note Indenture relating to the satisfaction and discharge of
the Senior Notes have been complied with.
(Sections 403, 1011)
Discharged means, with respect to the Senior Notes of any series, the
discharge of the entire indebtedness represented by, and our obligations under,
the Senior Notes of such series and in the satisfaction of all of our
obligations under, the Senior Note Indenture relating to the Senior Notes of
such series, except (a) the rights of Holders of the Senior Notes of such series
to receive, from the trust fund established pursuant to the Senior Note
Indenture, payment of the principal of and interest and premium, if any, on the
Senior Notes of such series when such payments are due, (b) our obligations with
respect to the Senior Notes of such series with respect to registration,
transfer, exchange and maintenance of a place of payment and (c) the rights,
powers, trusts, duties, protections and immunities of the Senior Note Trustee
under the Senior Note Indenture. (Section 101)
If we have deposited or caused to be deposited money or U.S. Government
Obligations to pay or discharge the principal of, and premium, if any, and
interest, if any, on the outstanding Senior Notes to and including a Redemption
Date on which all of the outstanding Senior Notes are to be redeemed, such
Redemption Date shall be irrevocably designated by a Board of Directors
resolution delivered to the Senior Note Trustee on or prior to the date of
deposit of such money or U.S. Government Obligations, and such Board of
Directors resolution shall be accompanied by an irrevocable Company Request that
the Senior Note Trustee give notice of such redemption in our name and at our
expense not less than 30 nor more than 60 days prior to such Redemption Date in
accordance with the Senior Note Indenture. (Sections 403)
U.S. Government Obligations means direct obligations of the United States
for the payment of which its full faith and credit is pledged, or obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States and the payment of which is unconditionally guaranteed by
the United States. U.S. Government Obligations shall also include a depositary
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of a
holder of a depositary receipt. However, except as required by law, such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depositary
receipt. (Section 101)
Resignation or Removal of Senior Note Trustee. The Senior Note Trustee may
resign at any time by giving written notice to us specifying the day upon which
the resignation is to take effect. The resignation will take effect immediately
upon the later of the appointment of a successor Senior Note Trustee and such
specified day. (Section 610)
The Senior Note Trustee may be removed at any time by an instrument or
concurrent instruments in writing delivered to the Senior Note Trustee and us
and signed by the Holders, or their attorneys-in-fact, of at least a majority in
principal amount of the then outstanding Senior Notes. In addition, under
certain circumstances, we may remove the Senior Note Trustee upon notice to the
Holder of each Senior Note outstanding and the Senior Note Trustee, and
appointment of a successor Senior Note Trustee. (Section 610)
No Recourse Against Others. The Senior Note Indenture provides that no
recourse will be had against any of our incorporators, stockholders, officers or
directors, as such, past, present or future or any successor Person, either
directly or through us or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise in the case of the following:
(1) the payment of the principal of or any premium or interest on any
Senior Note, or for any claim based thereon or otherwise in respect thereof;
(2) under or upon any obligation, covenant or agreement of ours, contained
in the Senior Note Indenture or in any supplemental indenture, or in any Senior
Note; or
(3) because of the creation of any indebtedness represented thereby.
It shall be expressly understood that all such liability is expressly
waived and released as a condition of, and in consideration for, the execution
of the Senior Note Indenture and the issuance of the Senior Notes. (Section 114)
Such waiver may not be effective to waive liabilities under the Federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.
Concerning the Senior Note Trustee. The Trustee under the Senior Note
Indenture, and affiliates of the Trustee, are also trustees under other
indentures and trust agreements of ours.
LEGAL OPINIONS
Legal opinions relating to the validity of the Senior Notes will be given
by Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, New
York 10005, our counsel, and Sidley & Austin, One First National Plaza, Chicago,
Illinois 60603, counsel for any underwriters, agents or dealers. Sidley & Austin
and Milbank, Tweed, Hadley & McCloy LLP have represented CSW and affiliates of
CSW, including us, from time to time in connection with certain legal matters.
All matters of Oklahoma law will be passed upon by Doerner, Saunders, Daniel &
Anderson, L.L.P., Tulsa, Oklahoma.
EXPERTS
The audited financial statements and schedules incorporated by reference
in this prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report dated February 25, 2000, with respect thereto, and are incorporated
herein by reference in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
PLAN OF DISTRIBUTION
We may use the following methods to sell the Senior Notes:
(1) through negotiation with one or more underwriters;
(2) through one or more agents or dealers designated from time to time;
(3) directly to purchasers; or
(4) through any combination of the above.
The distribution of the Senior Notes may be effected from time to time in one or
more transactions at a fixed price or prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. A prospectus supplement or a supplement
thereto will describe the method of distribution of the Senior Notes of any
series.
If we use any underwriters in the sale of Senior Notes, we will enter into
an underwriting agreement, distribution agreement or similar agreement with such
underwriters prior to the time of sale, and the names of the underwriters used
in the transaction will be set forth in the prospectus supplement or a
supplement thereto relating to such sale. If an underwriting agreement is
executed, the Senior Notes will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of the sale. Unless we otherwise indicate
in the prospectus supplement, the underwriting or purchase agreement will
provide that the underwriter or underwriters are obligated to purchase all of
the Senior Notes offered in the prospectus supplement if any are purchased.
If any of the Senior Notes are sold through agents designated by us from
time to time, the prospectus supplement or a supplement thereto will name any
such agent, set forth any commissions payable by us to any such agent and the
obligations of such agent with respect to the Senior Notes. Unless otherwise
indicated in the prospectus supplement or a supplement thereto, any such agent
will be acting on a best efforts basis for the period of its appointment.
Certain persons participating in an offering of the Senior Notes may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Senior Notes. Specifically, the underwriters, if any, may overallot in
connection with the offering, and may bid for, and purchase, the Senior Notes in
the open market.
The Senior Notes of any series, when first issued, will have no
established trading market. Any underwriters or agents to or through whom Senior
Notes are sold by us for public offering and sale may make a market in such
Senior Notes, but underwriters and agents will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Senior Notes.
In connection with the sale of the Senior Notes, any purchasers,
underwriters or agents may receive compensation from us or from purchasers in
the form of concessions or commissions. The underwriters will be, and any agents
and any dealers participating in the distribution of the Senior Notes may be,
deemed to be underwriters within the meaning of the Securities Act of 1933. The
agreement between us and any purchasers, underwriters or agents will contain
reciprocal covenants of indemnity, and will provide for contribution by us in
respect of our indemnity obligations, between us and the purchasers,
underwriters, or agents against certain liabilities, including liabilities under
the Securities Act of 1933.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us and our affiliates in the ordinary course of business.
