File No. 70-9071
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
__________________________________________
AMENDMENT NO. 2 TO FORM U-1 DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company filing this statement
and address of principal executive office)
Cinergy Corp.
(Name of top registered holding company parent)
William L. Sheafer
Vice President and Treasurer
Cinergy Corp.
(address above)
(Name and address of agent of service)
Applicant requests that the Commission send copies of all notices, orders
and communications in connection herewith to:
Jerome A. Vennemann James R. Lance
Associate General Counsel Manager Corporate Finance
Cinergy Corp. & Financial Risk Management
(address above) Cinergy Corp. (address above)
William T. Baker, Jr.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
The Declaration on Form U-1 in this proceeding, as previously amended, is
further amended as follows:
1. Item 1.C.1 ("Short-Term Notes") is hereby restated in its entirety
to read as follows:
1. Short-Term Notes
Cinergy proposes to make short-term borrowings from banks or other
lending institutions from time to time through December 31, 2002, provided
that the aggregate principal amount of such borrowings, together with the
aggregate amount of any then-outstanding commercial paper, short-term notes
in connection with letter of credit transactions, guarantees pursuant to
Release No. 35-26723 and Debentures issued or sold by Cinergy, will not
exceed $2 billion at any time outstanding ("Debt Cap").
Such borrowings will be evidenced by (1) "transactional" promissory
notes to be dated the date of such borrowings and to mature not more than
one year after the date thereof or (2) "grid" promissory notes evidencing
all outstanding borrowings from the respective lender, to be dated as of
the date of the first borrowing evidenced thereby, with each such borrowing
maturing not more than one year thereafter. Any such note may or may not
be prepayable, in whole or in part, with or without a premium in the event
of prepayment. The amount of any premium payable by Cinergy would not
exceed an amount equivalent to the present value of the stated interest
payable on the note in the event the note had not been prepaid, plus
accrued interest to the date of prepayment.
Borrowings will be priced at the lender's prevailing rate offered
to corporate borrowers of similar credit quality, which will not exceed the
greater of (a) the London Interbank Offered Rate plus 200 basis points, or
(b) a negotiated rate which would not exceed the lender's prime rate plus
200 basis points.
Cinergy may pay commitment fees based upon the unused portion of a
lender's commitment; such fees would not exceed the amount determined by
multiplying the unused portion of the lender's commitment by 3/4 of 1%.
In addition to the short-term notes described above, Cinergy
requests authority to issue short-term notes in connection with letter of
credit transactions providing credit support for Cinergy subsidiary
companies (other than Exempt Entities). In such a transaction, Cinergy
would anticipate being required to issue an unsecured demand promissory
note to the letter of credit bank evidencing Cinergy's reimbursement
obligation with respect to draws under the letter of credit. Each letter
of credit would have a stated expiration date not later than one year from
the date of issuance thereof. Cinergy would be required to repay amounts
drawn under the letter of credit on demand. Interest on unreimbursed
amounts would accrue at an annual rate not to exceed the prime rate offered
by the letter of credit bank plus 400 basis points. Cinergy may also be
required to pay letter of credit fees aggregating not more than 1% of the
face amount of the letter of credit.
2. The following exhibit is filed herewith:
G-1 Revised form of notice of proposed transactions for
publication in Federal Register
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the undersigned company
has duly caused this statement to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 13, 1997
CINERGY CORP.
By: /s/William L. Sheafer
Vice President and Treasurer
Exhibit G-1
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- _____________)
Cinergy Corp., a registered holding company ("Cinergy"), 139 East
Fourth Street, Cincinnati Ohio 45202, has filed a declaration under
sections 6(a), 7, 12(b), 32 and 33 of the Act and rules 45 and 53
thereunder.
By order dated January 11, 1995 (Release No. 35-26215) supplemented
by order dated March 12, 1996 (Release No. 35-26488), the Commission
authorized Cinergy to issue and sell from time to time through December 31,
1999 short-term notes (including in connection with letter of credit
transactions) and commercial paper in an aggregate principal amount at any
time outstanding not to exceed $1 billion. The Commission authorized
Cinergy to apply the net proceeds thereof to various corporate purposes
including investments in exempt wholesale generators ("EWGs") and foreign
utility companies ("FUCOs"), together with indirect investments therein
through one or more special-purpose subsidiaries ("Project Parents" and,
together with EWGs and FUCOs, "Exempt Entities"), provided that Cinergy's
"aggregate investment" did not exceed 50% of Cinergy's "consolidated
retained earnings," each as defined in rule 53(a)(1) under the Act ("50%
Investment Limitation"). At May 31, 1997, pursuant to the authorization
conferred in Release No. 35-26488, Cinergy had issued and outstanding a
total of $524 million in short-term notes (including in connection with
letter of credit transactions) and commercial paper, consisting entirely of
notes evidencing short-term bank loans. Cinergy proposes that the
authorization it now seeks supersede the authorization conferred by Release
No. 35-26488 effective immediately upon the date of the Commission's order.
By order dated May 30, 1997 (Release No. 35-26723), the Commission
authorized Cinergy from time to time through December 31, 2002, subject to
the $1 billion debt limitation prescribed in Release No. 35-26488
(including any adjustment to that debt limitation authorized by subsequent
Commission order), to guarantee the debt or other obligations of various
existing subsidiaries and of companies whose securities Cinergy or any
subsidiary thereof acquires from time to time in accordance with rule 58
under the Act. At July 1, 1997, Cinergy had issued $5 million in
guarantees pursuant to the authorization conferred in Release No. 35-26723.
By order dated November 18, 1994 (Release No. 35- 26159), the
Commission authorized Cinergy to issue and sell up to eight million shares
of its common stock, $.01 par value per share ("Common Stock"), from time
to time through December 31, 1995, (I) through solicitation of proposals
from underwriters or dealers, (ii) through underwriters or dealers on a
negotiated basis, (iii) directly to a limited number of purchasers or to a
single purchaser, and/or (iv) through agents on a negotiated basis.
Pursuant to that authority, on December 19, 1994 Cinergy publicly issued
and sold 7,089,000 shares of Common Stock and contributed the net proceeds
thereof (approximately $160 million) to the equity capital of Cinergy's
utility subsidiary, PSI Energy, Inc. By order dated February 23, 1996
(Release No. 35-26477), the Commission authorized Cinergy to issue and sell
the remaining shares of Common Stock available for issuance under the terms
of the 1994 order by any of the means specified in that order. In
addition, Cinergy was authorized to issue (but not sell) some or all of the
remaining shares to Cinergy system employees, including officer employees,
as awards. The 1996 order authorized Cinergy to apply the net proceeds
from sales of remaining shares to various corporate purposes including
investments in EWGs and FUCOs subject to the 50% Investment Limitation. Of
the eight million shares originally authorized for issuance under the 1994
order, a balance of 867,385 shares (the "Remaining Shares") remained
available for issuance at July 1, 1997 pursuant to the supplemental 1996
order. Cinergy proposes that the authorization it now seeks supersede the
authorization conferred by Release No. 35-26477 (except that the Remaining
Shares would be covered by the authority Cinergy now seeks) effective
immediately upon the date of the Commission's order.
Cinergy has pending a proposal docketed in File No. 70-8993;
Release No. 35-26714 to issue and sell from time to time through December
31, 2002 unsecured debt securities in one or more series bearing maturities
from two to 40 years ("Debentures") in an aggregate principal amount not to
exceed $400 million at any time outstanding, subject to the $1 billion debt
limitation prescribed in Release No. 35-26488 (including any adjustment to
that debt limitation authorized by subsequent Commission order). Net
proceeds from the issue and sale of the Debentures would be applied to
refinance short-term debt incurred by Cinergy to finance its 1996
acquisition of a 50% ownership interest in Midlands Electricity plc, a U.K.
FUCO, and to refinance Debentures outstanding from time to time.
Cinergy has also pending a proposal docketed in File No. 70-9011;
Release No. 35-26698 (the "100% Application") pursuant to which Cinergy
seeks to apply the net proceeds of certain financing transactions -
consisting of those authorized in Release Nos. 35-26723, 26477 and 26488
(to be superseded, as to the latter two orders, upon issuance of the
Commission's order in the instant proceeding) - to investments in Exempt
Entities, provided that Cinergy's "aggregate investment" will not exceed
100% of Cinergy's "consolidated retained earnings" (each as defined in rule
53(a)(1)).
Cinergy now proposes to issue and sell from time to time through
December 31, 2002, upon the terms and conditions described below, (1)
short-term notes and commercial paper in an aggregate principal amount not
to exceed (together with the then-outstanding principal amount of certain
other securities issued by Cinergy as described below) $2 billion at any
time outstanding, and (2) up to 30 million additional shares of Cinergy
common stock, plus the balance of remaining shares of Cinergy common stock
(867,385 shares at July 1, 1997) authorized for issuance in Release No.
35-26477, dated February 23, 1996 (in either case as such aggregate number of
shares may be adjusted for any subsequent stock split).
With respect to the proposed short-term notes specifically, Cinergy
proposes to make short-term borrowings from banks or other lending
institutions from time to time through December 31, 2002, provided that the
aggregate principal amount of such borrowings, together with the aggregate
amount of any then-outstanding commercial paper, short-term notes in
connection with letter of credit transactions, guarantees pursuant to
Release No. 35-26723 and Debentures issued or sold by Cinergy, will not
exceed $2 billion at any time outstanding ("Debt Cap").
Such borrowings will be evidenced by (1) "transactional" promissory
notes to be dated the date of such borrowings and to mature not more than
one year after the date thereof or (2) "grid" promissory notes evidencing
all outstanding borrowings from the respective lender, to be dated as of
the date of the first borrowing evidenced thereby, with each such borrowing
maturing not more than one year thereafter. Any such note may or may not
be prepayable, in whole or in part, with or without a premium in the event
of prepayment. The amount of any premium payable by Cinergy would not
exceed an amount equivalent to the present value of the stated interest
payable on the note in the event the note had not been prepaid, plus
accrued interest to the date of prepayment. Borrowings will be priced at
the lender's prevailing rate offered to corporate borrowers of similar
credit quality, which will not exceed the greater of (a) the London
Interbank Offered Rate plus 200 basis points, or (b) a negotiated rate
which would not exceed the lender's prime rate plus 200 basis points.
Cinergy may pay commitment fees based upon the unused portion of a lender's
commitment; such fees would not exceed the amount determined by multiplying
the unused portion of the lender's commitment by 3/4 of 1%.
In addition to the short-term notes just described, Cinergy
requests authority to issue short-term notes in connection with letter of
credit transactions providing credit support for Cinergy subsidiary
companies (other than Exempt Entities). In such a transaction, Cinergy
would anticipate being required to issue an unsecured demand promissory
note to the letter of credit bank evidencing Cinergy's reimbursement
obligation with respect to draws under the letter of credit. Each letter
of credit would have a stated expiration date not later than one year from
the date of issuance thereof. Cinergy would be required to repay amounts
drawn under the letter of credit on demand. Interest on unreimbursed
amounts would accrue at an annual rate not to exceed the prime rate offered
by the letter of credit bank plus 400 basis points. Cinergy may also be
required to pay letter of credit fees aggregating not more than 1% of the
face amount of the letter of credit.
As to the requested commercial paper authority, Cinergy proposes
from time to time through December 31, 2002 to issue and sell commercial
paper to one or more dealers (or directly to financial institutions if the
resulting cost of money is equal to or less than that available from
dealer-placed commercial paper) in an aggregate principal amount which,
together with the aggregate amount of any then-outstanding short-term
notes, guarantees pursuant to Release No. 35-26723 and Debentures issued or
sold by Cinergy, will not exceed the Debt Cap.
Cinergy proposes to issue and sell the commercial paper at market
rates with varying maturities not to exceed 270 days. The commercial paper
will be in the form of book-entry unsecured promissory notes with varying
denominations of not less than $25,000 each. Any associated fees will not
exceed 1/10 of 1% multiplied by the principal amount of the commercial
paper. In commercial paper sales effected on a discount basis, no
commission or fee will be payable in connection therewith; however, the
purchasing dealer will re-offer the commercial paper at a rate less than
the rate to Cinergy. The discount rate to dealers will not exceed the
maximum discount rate per annum prevailing at the date of issuance for
commercial paper of comparable quality and the same maturity. The
purchasing dealer will re-offer the commercial paper in such a manner as
not to constitute a public offering within the meaning of the Securities
Act of 1933.
In connection with the proposed issuance and sale of short-term
notes to banks and other lending institutions and sales of commercial
paper, Cinergy proposes to mitigate interest rate risk through the use of
various interest rate management instruments commonly used in today's
capital markets, such as interest rate swaps, caps, collars, floors,
options, forwards, futures and similar products designed to manage and
minimize interest costs. Cinergy expects to enter into these agreements
with counterparties that are highly rated financial institutions. The
transactions will be for fixed periods and stated notional amounts. Fees,
commissions and annual margins in connection with any interest rate
management agreements will not exceed 100 basis points in respect of the
principal or notional amount of the related short-term notes/commercial
paper or interest rate management agreement. In addition, with respect to
options (such as caps and collars), Cinergy may pay an option fee which
would not exceed 10% of the principal amount of the short-term note or
commercial paper covered by the option.
As to the requested common stock authority, Cinergy proposes to
issue and sell from time to time through December 31, 2002 (I) up to 30
million additional shares of Common Stock and (ii) the Remaining Shares
(collectively, including any adjustments pursuant to subsequent stock
splits, the "Additional Shares"). At May 31, 1997, Cinergy had a total of
600 million shares of Common Stock authorized for issuance, of which
157,679,129 were issued and outstanding. Cinergy proposes to issue and
sell the Additional Shares from time to time employing any one or more of
the following modes: (I) through solicitations of proposals from
underwriters or dealers, (ii) through negotiated transactions with
underwriters or dealers, (iii) directly to a limited number of purchasers
or to a single purchaser, and (iv) through agents. The price applicable to
Additional Shares sold in any such transaction will be based on several
factors, including in particular the current market price of the Common
Stock and capital market conditions in general at the time. Total fees and
expenses incurred by Cinergy in connection with the issuance and sale of
the Additional Shares will not exceed 5% of the total proceeds from the
sale of the Additional Shares. In addition, Cinergy requests authority to
issue (but not sell) up to 250,000 of the Additional Shares to Cinergy
system employees, including officers, in gift or award transactions from
time to time through December 31, 2002.
Cinergy proposes to apply net proceeds from the issue and sale of
the short-term notes, commercial paper and Additional Shares to investments
in other Cinergy system companies, to exempt acquisitions of securities of
energy-related companies pursuant to rule 58, to repay, repurchase or
refinance outstanding securities of Cinergy, to make loans to participating
companies in the Cinergy system money pool, to investments in Exempt
Entities, subject to the 50% Investment Limitation pending receipt of the
authorization requested in the 100% Application, and to other lawful
corporate purposes.
Cinergy anticipates that all or a significant portion of the
interest due on the short-term notes/ commercial paper and the cash
dividends declared on the Additional Shares would be paid from internally
generated funds, including dividends from subsidiaries. Cinergy expects
that the principal of and premium, if any, on the short-term notes and
commercial paper would be paid from proceeds of additional securities
issued and sold by Cinergy to nonaffiliates, including additional short-term
notes or commercial paper, and/or from internally generated funds.
In addition to the fees and expenses previously described, Cinergy
estimates total fees, expenses and commissions of approximately $15,000 in
connection with the proposed transactions.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
