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FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 333-41181
PRICING SUPPLEMENT NO. 2
DATED JUNE 10, 1998
(TO PROSPECTUS DATED DECEMBER 16, 1997 AND
PROSPECTUS SUPPLEMENT DATED DECEMBER 16, 1997)
PUGET SOUND ENERGY, INC.
SENIOR MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
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PRINCIPAL AMOUNT: $200,000,000
ISSUE PRICE: 100%
ORIGINAL ISSUE DATE: June 15, 1998
STATED MATURITY DATE: June 15, 2018
INTEREST RATE: 6.74%
INTEREST PAYMENT DATES: March 15 and September 15, commencing September 15,
1998
REGULAR RECORD DATES: February 28 (or February 29 in years including such
date) and August 31
FORM OF NOTES: [X] Book Entry [_] Certificated
REDEMPTION:
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The Senior Medium-Term Notes, Series A, due June 15, 2018 (the "Notes") will
be redeemable as a whole or in part, at the option of the Company at any time,
at a redemption price equal to the greater of (i) 100% of the principal amount
of such Notes and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 15 basis points, plus in each
case accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Senior Note Trustee (as defined in
the Prospectus dated December 16, 1997) after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (A)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury
Quotations, or (B) if the Senior Note Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Senior Note Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Senior Note Trustee by such Reference Treasury Dealer at
3:30 p.m. New York time on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of CS First Boston Corporation,
Lehman Brothers, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated and Salomon Brothers Inc and their
respective successors; provided, however, that if any of the foregoing or
their affiliates shall cease to be a primary U.S. Government securities dealer
in The City of New York (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Notes or portions
thereof called for redemption.
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AGENTS: Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, NationsBanc
Montgomery Securities, Inc. and Salomon
Smith Barney ("Agents").
FORM OF SALE: The Notes are being sold to the Agents as
principal and will be resold to investors
and other purchasers at the Issue Price.
AGENTS' DISCOUNT OR COMMISSION: .875%
NET PROCEEDS TO COMPANY: 99.125%
ADDITIONAL TERMS: None
CUSIP: 74531E AB 8
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