Prospectus Supplement
(To Prospectus dated October 7, 1999)
$150,000,000
South Carolina Electric & Gas Company
First Mortgage Bonds
7.5% Series due June 15, 2005
--------------
South Carolina Electric & Gas Company will pay interest on the New
Bonds on June 15 and December 15 of each year. SCE&G will make the first
interest payment on December 15, 2000. The New Bonds may be redeemed at any time
at the option of SCE&G, in whole or in part, at a redemption price equal to the
sum of (i) the principal amount of the New Bonds being redeemed, plus accrued
interest to the redemption date, and (ii) the Make-Whole Amount, if any. See
"Description of the New Bonds - Optional Redemption."
SCE&G has its principal office at 1426 Main Street, Columbia, South
Carolina 29201, telephone (803) 217-9000.
--------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
Per New Bond Total
Public Offering Price 99.573% $ 149,359,500
Underwriting Discount 0.600% $ 900,000
Proceeds, before expenses, to SCE&G 98.973% $ 148,459,500
---------------
We expect the New Bonds will be ready for delivery in book-entry form only
through The Depository Trust Company on or about June 14, 2000.
---------------
Joint Book-Running Managers
PaineWebber Incorporated Banc of America Securities LLC
--------------
The date of this prospectus supplement
is June 6, 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.
TABLE OF CONTENTS
Page
Prospectus Supplement
Use of Proceeds.............................................................S-3
Selected Financial Data.....................................................S-4
Description of the New Bonds................................................S-5
Basis for Issuance of the New Bonds.........................................S-6
Underwriting................................................................S-7
Experts.....................................................................S-8
Validity of the New Bonds...................................................S-8
Prospectus
About This Prospectus.........................................................2
Where You Can Find More Information...........................................2
South Carolina Electric & Gas Company.........................................3
Ratio of Earnings to Fixed Charges............................................3
Use of Proceeds...............................................................3
Description of the New Bonds..................................................3
Book-Entry System............................................................13
Plan of Distribution.........................................................16
Experts......................................................................17
Validity of the New Bonds....................................................17
<PAGE>
USE OF PROCEEDS
SCE&G will use the net proceeds from the sale of the New Bonds for the
payment at maturity of our $100,000,000 First Mortgage Bonds, 6% Series due June
15, 2000 (the "Bonds of the 6% Series"), for the repayment of short-term debt
incurred for the financing of our construction program and for general corporate
purposes.
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
Three Months Ended
March 31, March 31,
2000 1999
(Dollars in Thousands)
(Unaudited)
Consolidated Statements of Income Data:
<S> <C> <C>
Operating Revenues $395,070 $352,755
Operating Income 77,371 71,205
Income Before Interest Charges 81,487 73,366
Interest Charges 27,132 25,690
AFC (includes allowance for both
equity and borrowed funds) 1,226 2,221
Preferred Dividend Requirement of Company -
Obligated Mandatorily Redeemable Preferred Securities 944 944
Net Income 76,486 47,814
Ratio of Earnings to Fixed Charges (1) 4.10 4.21
Net Utility Plant 3,497,728 3,442,147
As of March 31, 2000
Actual Percentage Adjusted(2) Percentage(2)
(Dollars in Thousands)
(Unaudited)
Capitalization:
<S> <C> <C> <C> <C> <C>
Long-Term Debt (3) $1,120,151 39% $1,270,151 42%
Cumulative Preferred Stock
(not subject to purchase or sinking funds) 106,260 4% 106,260 3%
Cumulative Preferred Stock
(subject to purchase or sinking funds)(4) 10,854 - 10,854 -
Company - Obligated Mandatorily
Redeemable Preferred Securities of the
Company's Subsidiary Trust, SCE&G
Trust I 50,000 2% 50,000 2%
Common Stock Equity 1,600,874 55% 1,600,874 53%
---------- --- ---------- ---
Total $2,888,139 100% $3,038,139 100%
========== === ========== ===
</TABLE>
(1) For purposes of these ratios, earnings represent net income plus income
taxes and fixed charges. Fixed charges represent interest and the estimated
interest portion of annual rentals. These ratios are for the twelve months
ended March 21, 2000 and 1999, respectively.
(2) Gives effect to the sale of all the New Bonds offered hereby.
(3) Excludes current portion of long-term debt of $127,573, which will be
reduced by $100,000 by the payment at maturity of the Bonds
of the 6% Series.
(4) Excludes current portion of preferred stock of $560.
<PAGE>
DESCRIPTION OF THE NEW BONDS
SCE&G will issue the First Mortgage Bonds, 7.5% Series due June 15, 2005
(the "New Bonds") under the Indenture dated as of April 1, 1993, as supplemented
(the "Mortgage") made by SCE&G to The Bank of New York, successor to NationsBank
of Georgia, National Association (the "Trustee"). The following information
concerning the New Bonds supplements and should be read in conjunction with the
statements under "Description of the New Bonds" in the accompanying prospectus.
Form and Denomination
The New Bonds will be issued as one or more global bonds in the name of
Cede & Co., as nominee for The Depository Trust Company, New York, New York and
will be available only in book-entry form. See "Book-Entry System" in the
accompanying prospectus.
Interest and Maturity
SCE&G will pay interest on the New Bonds from June 14, 2000, at the rate of
7.5% per annum, semiannually on June 15 and December 15 of each year commencing
on December 15, 2000, to holders of record on the preceding June 1 and December
1, respectively. The New Bonds will mature June 15, 2005. The principal and
interest are payable at the office or agency of SCE&G in Atlanta, Georgia
(currently, the Trustee). The New Bonds will be limited to $150,000,000 in
aggregate principal amount.
Optional Redemption
The New Bonds may be redeemed at any time at the option of SCE&G, in
whole or in part, at a redemption price equal to the sum of (i) the principal
amount of the New Bonds being redeemed, plus accrued interest thereon to the
redemption date, and (ii) the Make-Whole Amount, if any, with respect to such
New Bonds (the "Redemption Price").
"Make-Whole Amount" means the excess, if any, of (i) the aggregate
present value as of the date of any optional redemption of each dollar of
principal being redeemed and the amount of interest (exclusive of interest
accrued to the date of redemption) that would have been payable in respect of
such dollar if such redemption had not been made, determined by discounting, on
a semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date notice of such
redemption is given) from the respective dates on which such principal and
interest would have been payable if such redemption had not been made, over (ii)
the aggregate principal amount of the New Bonds being redeemed.
"Reinvestment Rate" means .15% (fifteen one-hundredths of one percent)
plus the arithmetic mean of the yields under the respective headings "This Week"
and "Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed. If no maturity exactly corresponds to such maturity,
yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the nearest
month. For purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination, then such
other reasonably comparable index which shall be designated by SCE&G.
BASIS FOR ISSUANCE OF THE NEW BONDS
SCE&G will issue the New Bonds upon the basis of $150,000,000 of Class A
Bonds held by the Trustee and designated by SCE&G as the basis for such
issuance. After the issuance of the New Bonds and the payment at maturity of the
Bonds of the 6% Series, SCE&G will be able to issue $665,035,000 of additional
Bonds on the basis of a like principal amount of Class A Bonds held by the
Trustee and available for such purpose. See "Description of the New Bonds" in
the accompanying prospectus.
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting
Agreement between SCE&G and the Underwriters named below, SCE&G has agreed to
sell to the Underwriters, and each of the Underwriters has agreed to purchase
from SCE&G, the respective principal amount of New Bonds set forth opposite its
name. In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase the entire aggregate
principal amount of the New Bonds if any New Bonds are purchased.
Principal Amount
Underwriters of New Bonds
PaineWebber Incorporated . . . . . . . . . . . . $ 75,000,000
Banc of America Securities LLC . . . . . . . . . 75,000,000
Total . . . . . . . . . . . . . . . . . . . $150,000,000
SCE&G has been advised by the Underwriters that they propose initially
to offer the New Bonds to the public at the public offering price set forth on
the cover page of this prospectus supplement, and to certain dealers at such
price less a concession not in excess of 0.35% of the principal amount of the
New Bonds. The Underwriters may allow and such dealers may reallow a concession
not in excess of 0.25% of the principal amount. After the initial public
offering, the public offering price and the concessions may be changed.
The New Bonds are a new issue of securities with no established trading
market. SCE&G does not intend to apply for listing of the New Bonds on a
national securities exchange. The Underwriters have told SCE&G that they
presently intend to make a market in the New Bonds, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the New Bonds. Any market making by the Underwriters may be
discontinued at any time at the sole discretion of the Underwriters. No
assurance can be given as to whether a trading market for the New Bonds will
develop or as to the liquidity of any trading market.
Until the distribution of the New Bonds is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters to
bid for and purchase the New Bonds. As an exception to these rules, the
Underwriters are permitted to engage in certain transactions that stabilize the
price of the New Bonds. Possible transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the New Bonds.
If the Underwriters create a short position in the New Bonds in
connection with this offering, that is, if they sell a greater aggregate
principal amount of New Bonds than is set forth on the cover page of this
prospectus supplement, the Underwriters may reduce that short position by
purchasing New Bonds in the open market. The Underwriters may also impose a
penalty bid on certain selling group members. This means that if an Underwriter
purchases New Bonds in the open market to reduce its short position or to
stabilize the price of the New Bonds, it may reclaim the amount of the selling
concession from the selling group members who sold those New Bonds as part of
the offering.
In general, purchases of a security for the purposes of stabilization
or to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a New Bond to the extent that it
were to discourage resales of the New Bonds.
Neither SCE&G nor the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above might have on the price of the New Bonds. In addition, neither
SCE&G nor the Underwriters make any representation that the Underwriters will
engage in such transactions. Such transactions, once commenced, may be
discontinued without notice.
SCE&G has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that the Underwriters may be required to make in
respect thereof.
The Underwriters and their affiliates have from time to time performed,
and may continue to perform in the future, investment banking services for
SCE&G, for which customary compensation has been received.
SCE&G estimates that its total expenses relating to the offering, not
including the underwriting discount, will be approximately $180,000.
<PAGE>
EXPERTS
The statements made under "Description of the New Bonds" in the
accompanying prospectus, as to matters of law and legal conclusions, have been
reviewed by H. Thomas Arthur, Esq., and such statements are made upon the
authority of such counsel as an expert. Mr. Arthur is a Senior Vice President,
the General Counsel and an Assistant Secretary of SCE&G.
VALIDITY OF THE NEW BONDS
The validity of the New Bonds will be passed upon for SCE&G by McNair
Law Firm, P.A., of Columbia, South Carolina and by H. Thomas Arthur, Esq. of
Columbia, South Carolina, and for the Underwriters by Thelen Reid & Priest LLP,
of New York, New York. Thelen Reid & Priest LLP will rely as to all matters of
South Carolina law upon the opinion of H. Thomas Arthur, Esq. Thelen Reid &
Priest LLP from time to time renders legal services to SCE&G.
At May 31, 2000, H. Thomas Arthur, Esq, owned beneficially 12,197
shares of SCANA Corporation's Common Stock, including shares acquired by the
trustee under its Stock Purchase-Savings Plan by use of contributions made by
Mr. Arthur and earnings thereon and including shares purchased by such trustee
by use of SCANA contributions and earnings thereon.
<PAGE>
PROSPECTUS
$300,000,000
SOUTH CAROLINA ELECTRIC & GAS COMPANY
1426 Main Street
Columbia, South Carolina 29201
(803) 217-9000
Internet Address: http://www.scana.com
First Mortgage Bonds
South Carolina Electric & Gas Company may offer and sell from time to
time up to $300,000,000 aggregate principal amount of its New Bonds. SCE&G may
sell the New Bonds in one or more series (1) through underwriters or dealers,
(2) directly to a limited number of institutional purchasers or (3) through
agents. See "PLAN OF DISTRIBUTION." We will provide the specific terms of these
securities in supplements to this prospectus. This prospectus may not be used to
sell securities unless accompanied by a prospectus supplement. You should read
this prospectus and the prospectus supplement before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is October 7, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf process, we may sell any or all of the New Bonds described in
this prospectus in one or more offerings up to a total dollar amount of
$300,000,000. This prospectus provides you with a general description of the New
Bonds. Each time we sell New Bonds, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and the relevant
prospectus supplement, together with the additional information described under
the heading "WHERE YOU CAN FIND MORE INFORMATION."
We believe we have included all information material to investors but
certain details that may be important for specific investment objectives have
not been included. To see more detail, you should read the exhibits filed with
the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file with the SEC at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
room. Because we have preferred stock which is listed on the New York Stock
Exchange, you may also read our filings at the Stock Exchange offices at 20
Broad Street, New York, New York 10005.
This prospectus does not repeat important information that you can find
in the registration statement and in the reports and other documents which we
file with the SEC under the Securities Exchange Act of 1934. The SEC allows us
to "incorporate by reference" the information we file with it, which means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
our Annual Report on Form 10-K, as amended, for the year ended December 31,
1998, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999, a Current Report on Form 8-K dated February 16, 1999, and any
future filing made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act until we sell all of the New Bonds.
We are not required to, and do not, provide annual reports to holders
of our debt securities unless specifically requested by a holder.
You may request a copy of our SEC filings at no cost by writing or
telephoning us at the following address:
H. John Winn, III
Manager - Investor Relations and Shareholder Services
South Carolina Electric & Gas Company
Columbia, South Carolina 29218
(803) 217-9240
You may obtain more information by contacting the Internet website of
SCE&G's parent company, SCANA Corporation, at http://www.scana.com.
<PAGE>
You should rely on the information we incorporate by reference or
provide in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. 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.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
SCE&G is a wholly-owned subsidiary of SCANA Corporation and is a
regulated public utility which generates, transmits, distributes and sells
electricity, and purchases and sells natural gas at retail, in South Carolina.
SCE&G also operates an urban bus service in Columbia, South Carolina. The SCE&G
electric service area covers over 15,000 square miles and extends into 24
counties in central, southern and southwestern portions of South Carolina. The
service area for natural gas encompasses all or part of 31 of the 46 counties in
South Carolina. The total population of SCE&G's combined electric and gas
service area is approximately 2.3 million. SCE&G has its principal executive
offices at 1426 Main Street, Columbia, South Carolina 29201, telephone number
(803) 217-9000.
RATIO OF EARNINGS TO FIXED CHARGES
SCE&G's historical ratios of earnings to fixed charges are as follows:
Twelve Months Year Ended December 31,
------------------------------------------------
Ended June 30, 1999 1998 1997 1996 1995 1994
------------------- ---- ---- ---- ---- ----
4.07 4.52 3.85 3.80 3.41 3.46
For purposes of this ratio, earnings represent net income plus income taxes and
fixed charges. Fixed charges represent interest charges and the estimated
interest portion of annual rentals.
USE OF PROCEEDS
SCE&G will use the proceeds from the sale of the New Bonds to finance
its construction program and to reduce short-term indebtedness incurred for such
purpose, to refinance senior securities and for other general corporate
purposes.
DESCRIPTION OF THE NEW BONDS
General
SCE&G will issue the New Bonds in one or more series under an
Indenture, dated as of April 1, 1993, between SCE&G and The Bank of New York,
successor to NationsBank of Georgia, National Association, as trustee (the
"Trustee"), as supplemented (the "Mortgage"). The New Bonds and all other debt
securities issued and outstanding under the Mortgage are referred to in this
prospectus as the "Bonds." Capitalized terms used under this heading which are
not otherwise defined in this prospectus have the meanings given those terms in
the Mortgage. The summaries under this heading are not detailed. Whenever
particular provisions of the Mortgage or terms defined in the Mortgage are
referred to, those statements are qualified by reference to the Mortgage.
References to article and section numbers under this heading, unless otherwise
indicated, are references to article and section numbers of the Mortgage. A copy
of the Mortgage is included as an exhibit to the registration statement of which
this prospectus is a part.
<PAGE>
Each prospectus supplement which accompanies this prospectus will set
forth the following information to describe the series of New Bonds related to
that prospectus supplement, unless the information is the same as the
information included under the captions "Payment of New Bonds; Transfers;
Exchanges" and "Redemption" in this prospectus:
o the title of the series of New Bonds;
o any limit upon the aggregate principal amount of the series of New Bonds;
o the date or dates on which the principal of the series of New Bonds
will be payable;
o the rate or rates at which the series of New Bonds will bear
interest, if any (or the method of calculating the rate); the date
or dates from which the interest will accrue; the dates on which
the interest will be payable ("Interest Payment Dates"); the
record dates for the interest payable on the Interest Payment
Dates;
o any option of SCE&G to redeem the series of New Bonds and redemption
terms and conditions;
o any obligation of SCE&G to redeem or purchase the series of New
Bonds pursuant to any sinking fund or analogous provisions or at
the option of the holder and the relevant terms and conditions for
that redemption or purchase;
o the denominations of the series of New Bonds;
o whether the series of New Bonds are subject to a book-entry system
of transfers and payments; and
o any other particular terms of the series of New Bonds and of their offering.
Payment of New Bonds; Transfers; Exchanges
We will pay any interest which is due on each New Bond to the person in
whose name that New Bond is registered as of the close of business on the record
date relating to the Interest Payment Date. However, we will pay interest which
is payable when the New Bonds mature (whether the New Bonds mature on their
stated date of maturity, the date the New Bonds are redeemed or otherwise) to
the person to whom the relevant principal payment on the New Bonds is paid.
We will pay principal of, any premium and interest on, the New Bonds at
the office or agency of SCE&G in Atlanta, Georgia (currently, the Trustee). The
prospectus supplement identifies any other place of payment and any other paying
agent. SCE&G may change the place at which the New Bonds will be payable, may
appoint one or more additional paying agents (including SCE&G) and may remove
any paying agent, all at its discretion. (Section 702)
You may transfer or exchange the New Bonds for other New Bonds of the
same series, authorized denominations (which are, unless otherwise stated in the
prospectus supplement, denominations of $1,000 and any integral multiple
thereof) and of like tenor and aggregate principal amount, at the office or
agency of SCE&G in Atlanta, Georgia (currently, the Trustee). At our discretion,
we may change the place for registration and transfer of the New Bonds, and we
may appoint one or more additional Security Registrars (including SCE&G) and
remove any Security Registrar. The prospectus supplement will identify any
additional place for registration of transfer and any additional Security
Registrar. You are not responsible for paying a service charge for any transfer
or exchange of the New Bonds, but you may have to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of the New Bonds. (Sections 202 and 205)
For additional information with respect to the rights of the owners of
beneficial interests in New Bonds subject to a book-entry system of transfers
and payments, see "BOOK-ENTRY SYSTEM."
Redemption
The New Bonds are subject to redemption, as set forth in the relevant
prospectus supplement, only upon notice by mail not less than 30 days prior to
the redemption date. If less than all the New Bonds of a series are to be
redeemed, the particular New Bonds to be redeemed will be selected by that
method as shall be provided for any particular series, or in the absence of any
such provision, by any method as the Security Registrar deems fair and
appropriate. (Sections 903 and 904)
We may make any redemption conditional upon receipt by the Trustee, on
or prior to the date fixed for redemption, of money sufficient to pay the
redemption price. If the Trustee has not received that money, we will not be
required to redeem those New Bonds. (Section 904)
Security
General. The New Bonds will be equally and ratably secured with all other
Bonds issued under the Mortgage. The Bonds are secured by:
o a like principal amount of non-interest bearing first mortgage
bonds (the "Class A Bonds" as more particularly described below),
and
o the lien of the Mortgage on substantially all of the properties of
SCE&G used in the generation, purchase, transmission, distribution
and sale of electricity and any other property which SCE&G may
elect to subject to the lien of the Mortgage on the Mortgaged
Property.
The lien of the Mortgage is junior to the lien of SCE&G's Indenture, dated as of
January 1, 1945 (the "Class A Mortgage") to The Chase Manhattan Bank, successor
to Central Hanover Bank and Trust Company, as trustee (the "Class A Trustee").
If SCE&G merges or is consolidated into another corporation and certain
conditions set forth in the Mortgage are satisfied, then SCE&G may deliver to
the Trustee bonds issued under an existing mortgage on the properties of such
other corporation in lieu of or in addition to Class A Bonds. In that event, the
Bonds will be secured, additionally, by such bonds (which would become Class A
Bonds) and by the lien of the Mortgage on the properties of such other
corporation, subject to such existing mortgage, which lien would be junior to
the liens of such existing mortgage (which would become a Class A Mortgage) and
the Class A Mortgage. (Section 1206)
When no Class A Bonds are outstanding under a Class A Mortgage except
for Class A Bonds held by the Trustee, then, subject to the satisfaction of
certain conditions, the Trustee will surrender those Class A Bonds for
cancellation and the related Class A Mortgage will be satisfied and discharged.
In that event, the lien of such Class A Mortgage on SCE&G's property will cease
to exist and the Mortgage will constitute, subject to certain exceptions, a
first mortgage lien on the property mortgaged thereby. (Section 1207)
<PAGE>
Class A Bonds. The Class A Bonds are issued under the Class A Mortgage,
and delivered to the Trustee under the Mortgage. The Class A Bonds will be
registered in the name of the Trustee and will be owned and held, subject to the
provisions of the Mortgage, for the benefit of the holders of all of the Bonds
Outstanding from time to time. SCE&G will have no interest in the Class A Bonds
designated as the basis for authentication and delivery of Bonds. (Section 1201)
The Trustee may not transfer any Class A Bonds which have been
designated as the basis for the authentication and delivery of Bonds, except to
a successor trustee. At the time any Bonds which have been authenticated and
delivered upon the basis of Class A Bonds are no longer Outstanding, SCE&G may
request the Trustee to surrender for cancellation an equal principal amount of
such Class A Bonds. (Sections 1203 and 1204)
Lien of the Mortgage. The properties subject to the lien of the
Mortgage are also subject to the prior first mortgage lien of the Class A
Mortgage. As discussed under the heading "The Class A Mortgage--Security," the
lien of the Class A Mortgage is a first mortgage lien, subject to certain
exceptions, against the properties subject thereto. Until the Class A Mortgage
is discharged, the Bonds have the benefit of the lien of the Class A Mortgage on
the property mortgaged thereby, to the extent of the aggregate principal amount
of Class A Bonds designated as the basis for the authentication and delivery of
Bonds held by the Trustee.
(Granting Clauses and Article Twelve)
The lien of the Mortgage is also subject to liens on after-acquired
property existing at the time of acquisition and to various liens, including:
o tax liens, mechanics', materialmen's and similar liens and certain
employees' liens, in each case, which are not delinquent and which
are being contested,
o certain judgment liens, easements, reservations and rights of
others (including governmental entities) in, and defects of title
to, the property subject to the lien of the Mortgage which do not
materially impair its use by SCE&G,
o certain leases, and
o certain other liens and encumbrances. (Granting Clauses and Section 101)
The following, among other things, are excepted from the lien of the
Mortgage:
o cash and securities not held under the Mortgage,
o contracts, leases and other agreements, bills, notes and other
instruments, receivables, claims, certain intellectual property
rights and other general intangibles,
o automotive and similar vehicles, movable equipment, and railroad,
marine and flight equipment,
o all goods, stock in trade, wares and merchandise held for sale in
the ordinary course of business,
o fuel (including nuclear fuel assemblies), materials, supplies and
other personal property consumable in the operation of SCE&G's
business,
o portable equipment,
o furniture and furnishings, and computers, machinery and equipment
used exclusively for corporate administrative or clerical
purposes,
o electric energy, gas and other products generated, produced or purchased,
o substances mined, extracted or otherwise separated from the land
and all rights thereto, leasehold interests, and,
o with certain exceptions, all property which is located outside of the
State of South Carolina or Columbia County, Georgia.
(Granting Clauses)
The Mortgage contains provisions subjecting (with certain exceptions and
limitations and subject to the prior lien of the Class A Mortgage)
after-acquired electric utility property to the lien of the Mortgage. (Granting
Clauses)
The Mortgage provides that the Trustee has a lien upon the property subject
to the lien of the Mortgage, for the payment of its compensation and expenses.
This Trustee's lien is prior to the lien on behalf of the holders of the Bonds.
(Section 1607)
Issuance of Bonds
The maximum principal amount of Bonds which SCE&G may issue under the
Mortgage is unlimited. (Section 201) SCE&G may issue Bonds of any series from
time to time on the basis of, and in an aggregate principal amount not exceeding
o the aggregate principal amount of Class A Bonds issued and
delivered to the Trustee and designated by SCE&G as the basis for
such issuance,
o 70% of the amount of Unfunded Net Property Additions (generally
defined as Property Additions (net of retirements) which are not
subject to the lien of the Class A Mortgage and which have not
been made or deemed to have been made the basis of the
authentication and delivery of Bonds or used for other purposes
under the Mortgage),
o the aggregate principal amount of retired Bonds, and
o cash deposited with the Trustee. (Sections 101 and 302 and Articles
Four, Five and Six)
Property Additions are generally defined to include any Property
subject to the lien of the Mortgage which SCE&G may elect to designate as such,
except (with certain exceptions) goodwill, going concern value rights,
intangible property or any property the cost of acquisition or construction of
which is properly chargeable to an operating expense account of SCE&G. (Section
104)
Since the Mortgaged Property is subject to the lien of the Class A
Mortgage, the New Bonds are issued on the basis of Class A Bonds. The amount of
Bonds SCE&G may issue on that basis will be limited by the amount of Class A
Bonds which may be issued under the Class A Mortgage. See "The Class A Mortgage
- Issuance of Additional Bonds."
With certain exceptions in the case of Bonds issued on the basis of
Class A Bonds and retired Bonds as described above, we can issue Bonds only if
the Adjusted Net Earnings of SCE&G for 12 consecutive months within the
preceding 18 months is at least twice the Annual Interest Requirements on:
o all Bonds at the time outstanding,
o the Bonds then applied for, and
o all outstanding Class A Bonds other than Class A Bonds held by
the Trustee under the Mortgage. (Sections 103, 301, 302 and
501)
Release of Property
SCE&G may obtain the release of property from the lien of the Mortgage
either upon the basis of an equal amount of Unfunded Net Property Additions or
upon the basis of the deposit of cash or a credit for Retired Securities and
certain other obligations. SCE&G may also obtain the release of property upon
the basis of the release of the property from the lien of the Class A Mortgage.
(Article Ten)
Withdrawal of Cash
SCE&G may withdraw cash deposited as the basis for the issuance of
Bonds and cash representing payments in respect of Class A Bonds designated as
the basis for the issuance of Bonds upon the basis of (1) Unfunded Net Property
Additions in an amount equal to ten-sevenths of such cash, (2) an equal amount
of Retired Bonds or (3) an equal amount of Class A Bonds not then designated as
the basis for the issuance of Bonds or the withdrawal of cash. (Sections 601 and
1202) In addition, SCE&G may withdraw cash upon the basis of (a) an equal amount
of Unfunded Net Property Additions, or (b) ten-sevenths of the amount of Retired
Securities, or may apply such cash to (y) the purchase of Bonds (at prices not
exceeding ten-sevenths of the principal amount thereof) or (z) the redemption or
payment at stated maturity of Bonds. (Sections 601 and 1005)
Modification of Mortgage
Except for modifications which will not have a material adverse effect
upon the interests of the Holders of the Bonds, the holders of a majority in
aggregate principal amount of the Outstanding Bonds (or if only certain series
would be affected, the Outstanding Bonds of that series) must consent to amend
the Mortgage. However, no amendment may, without the consent of the holder of
each Outstanding Bond directly affected by the amendment, (1) change the Stated
Maturity of the principal of or interest on that Bond, or reduce the principal
amount, or the rate of interest on that Bond, or (2) permit the creation of a
lien prior to the lien of the Mortgage on substantially all of the Mortgaged
Property or otherwise deprive those holders of the security of the lien of the
Mortgage. (Section 1702)
Events of Default
Each of the following events is an Event of Default under the Mortgage:
o SCE&G fails to make payments of principal or premium within three
days, or interest within 60 days, after the due date,
o SCE&G fails to perform or breaches any other covenant or warranty
for a period of 90 days after notice,
o SCE&G files for bankruptcy or certain other events involving
insolvency, receivership or bankruptcy occur, and
o SCE&G defaults under any Class A Mortgage. (Section 1101)
<PAGE>
If an Event of Default occurs and is continuing, either the Trustee or
the Holders of 25% in principal amount of the Outstanding Bonds may declare the
principal amount of all of the Outstanding Bonds to be immediately due and
payable. After the declaration of maturity has been made, but before the sale of
any of the Mortgaged Property and before the Trustee has obtained a judgment or
decree for payment of money, the Event of Default giving rise to such
declaration of acceleration will be waived, and such declaration and its
consequences will be rescinded and annulled, if SCE&G cures such Event of
Default. (Sections 1102 and 1117)
The Holders of a majority in principal amount of the Outstanding Bonds
may direct the time, method and place of conducting any proceeding for the
enforcement of the Mortgage available to the Trustee or exercising any trust or
power conferred on the Trustee. No Holder of any Bond has the right to institute
any proceeding with respect to the Mortgage, or for the appointment of a
receiver or for any other remedy thereunder, unless
o that Holder previously gave written notice of an Event of Default
to the Trustee,
o the Holders of a majority in principal amount of Outstanding Bonds
tendered to the Trustee reasonable indemnity against costs and
liabilities and requested that the Trustee take action,
o the Trustee declined to take action, and
o the Holders of a majority in principal amount of Outstanding Bonds
have given no inconsistent direction;
provided, however, that each Holder of a Bond has the right to enforce
payment of that Bond when due. (Sections 1111, 1112 and 1116)
In addition to the rights and remedies provided in the Mortgage, the
Trustee may exercise any right or remedy available to the Trustee in its
capacity as the owner and holder of Class A Bonds which arises as a result of a
default under the Class A Mortgage. (Section 1119)
Evidence of Compliance
The Trust Indenture Act requires that SCE&G give the Trustee, at least
annually, a brief statement as to SCE&G's compliance with the conditions and
covenants under the Mortgage. (Article Eight)
The Class A Mortgage
General. Capitalized terms used under this sub-heading which are not
otherwise defined in this prospectus have the meanings ascribed to those terms
in the Class A Mortgage. The summaries under this sub-heading are not detailed.
Whenever particular provisions of the Class A Mortgage or terms defined in the
Class A Mortgage are referred to in this section, those provisions or
definitions are qualified by reference to the Class A Mortgage. References to
article and section numbers in this sub-heading, unless otherwise indicated, are
references to article and section numbers of the Class A Mortgage. A copy of the
Class A Mortgage is included as an exhibit to the registration statement of
which this prospectus is a part.
Security. The Class A Bonds are secured, equally and ratably with all
other bonds issued and outstanding under the Class A Mortgage, by a direct lien
on substantially all of SCE&G's fixed property and franchises used or useful in
its public utility businesses (except cash, securities, contracts and accounts
receivable, materials and supplies, natural gas, oil, certain minerals and
mineral rights and certain other assets) now owned by SCE&G. The lien of the
Class A Mortgage is a first lien except that it is subject to (1) certain
excepted encumbrances and (2) the fact that titles to certain properties are
subject to reservations and encumbrances such as are customarily encountered in
the public utility business and which do not materially interfere with their
use. The Class A Mortgage contains provisions for the subjection (with certain
exceptions and limitations) of after-acquired property of SCE&G to the lien
thereof. (Granting Clauses)
The Class A Mortgage prohibits SCE&G from acquiring property subject to
prior liens if, following the acquisition, prior lien bonds would exceed 15% of
the aggregate of outstanding bonds unless the principal amount of indebtedness
secured by such prior liens does not exceed 70% of the cost of such property to
SCE&G and unless, in certain cases, the net earnings of such property meet
certain tests. (Section 7.05 and Fifty-third Supplemental Section 2.02)
The Class A Trustee has a lien upon the property subject to the lien of
the Class A Mortgage for payment of its reasonable compensation and expenses and
for indemnification against certain liabilities. This lien is prior to the lien
on behalf of the holders of bonds. (Section 16.10)
Issuance of Additional Bonds. The principal amount of bonds which may
be secured by the Class A Mortgage is limited to $5,000,000,000 but may be
increased by a supplemental indenture or indentures without the consent of
bondholders or stockholders. (Section 2.01 and Fifty-third Supplemental Section
1.04) Additional bonds may from time to time be issued on the basis of
o 70% of unfunded net property additions,
o deposit of cash or
o retirement of bonds.
With certain exceptions in the case of bonds issued on the basis of the
retirement of bonds, we can issue bonds only if net earnings for 12 consecutive
months out of the preceding 15 months are at least twice the annual interest
requirements on all bonds to be outstanding and all prior lien bonds.
SCE&G may withdraw, or apply to the purchase or redemption of bonds,
cash deposited with the Class A Trustee as the basis for the issuance of bonds
in an amount equal to the principal amount of bonds which SCE&G is then entitled
to have authenticated and delivered. (Section 1.03 and Articles IV, V and VI) At
June 30, 1999 unfunded net property additions were approximately $507.5 million,
sufficient to permit the issuance of approximately $355.3 million principal
amount of bonds under the Class A Mortgage.
Retirement credits in the amount of $81.8 million were available at June 30,
1999.
Sinking Fund. The Class A Mortgage requires SCE&G to deposit, on or
before June 1 in each year, with the Class A Trustee as a "sinking fund
requirement" an amount equal to 1% of the aggregate principal amount of bonds
(other than bonds authenticated on the basis of retirements of other bonds and
certain retired bonds). SCE&G may pay the sinking fund requirement in cash or
bonds. In addition, we may satisfy a portion of the sinking fund requirement by
certifying to the Class A Trustee unfunded net property additions in an amount
equal to ten-sevenths of the portion of the sinking fund requirement being
satisfied. Any cash deposited may be applied to the purchase or redemption of
bonds of any series or may be withdrawn by SCE&G against deposit of bonds.
(Section 2.12, Second Supplemental Section 2, Third through Fifth, Seventh
through Eleventh, Thirteenth through Fifty-third Supplementals, Section 1.03 and
Sixth and Twelfth Supplementals Section 2.03)
<PAGE>
Events of Default; Concerning the Trustee. The following are defaults under
the Class A Mortgage:
o SCE&G fails to make payments of principal or interest,
o SCE&G fails to make any sinking fund or purchase fund payment,
o SCE&G files for bankruptcy or certain other events involving
insolvency, receivership or bankruptcy occur, and
o SCE&G fails to perform certain covenants or agreements.
Certain of these events become defaults only after the lapse of prescribed
periods of time and/or notice from the Trustee. (Section 11.01) The Trust
Indenture Act requires SCE&G to furnish the Class A Trustee with periodic
evidence as to the absence of defaults and as to compliance with the terms of
the Class A Mortgage.
Upon the occurrence of a default under the Class A Mortgage, either the
Class A Trustee or the holders of not less than 20% in principal amount of
outstanding bonds may declare the principal of all outstanding bonds immediately
due and payable. However, if the default is cured, the holders of a majority in
principal amount of outstanding bonds may rescind that declaration and waive the
default and its consequences. (Section 11.05)
The holders of a majority in principal amount of outstanding bonds may
direct the time, method and place of conducting any proceeding for the
enforcement of the Class A Mortgage. (Section 11.12) No holder of any bond has
the right to institute any proceeding with respect to the Class A Mortgage
unless
o the holder previously gave written notice of a default to the Class
A Trustee,
o the holders of not less than 20% in principal amount of
outstanding bonds tendered to the Class A Trustee reasonable
indemnity against costs and liabilities and requested the Class A
Trustee to take action,
o the Class A Trustee declined to take action, and
o the holders of a majority in principal amount of outstanding bonds
have given no inconsistent direction;
provided, however, that each holder of a bond shall have the right to
enforce payment of that Bond when due. (Section 11.14)
Miscellaneous. Subject to certain exceptions and limitations contained
in the Class A Mortgage, property subject to the lien of that mortgage may be
released only upon the substitution of cash, divisional bonds, bonds
authenticated under the Class A Mortgage or certain other property. (Article X)
Amendments of the Class A Mortgage require the consent of the holders of 66 2/3%
in principal amount of outstanding bonds; provided, the bondholders shall have
no power
o to extend the maturity, or reduce the rate or extend the time of
payment of interest on any bonds, or reduce the principal amount
of any bonds, or change provisions relating to the sinking fund or
the redemption provisions of any series of bonds outstanding under
the Class A Mortgage, without the express consent of the holder of
each bond which would be affected,
o to reduce the percentages of holders whose consent is required to
enter into any supplemental indenture, without the consent of the
holders of all bonds outstanding,
o to permit the creation by SCE&G of any mortgage or pledge or lien
in the nature thereof, ranking prior to or equal with the lien of
the Class A Mortgage on any of the mortgaged property, or
o to deprive the holder of any bond outstanding under the Class A
Mortgage of the lien of the Class A Mortgage. (Fifty-third
Supplemental Section 2.01)
Amendment of the Class A Mortgage by Vote of Trustee
The Mortgage provides that, if SCE&G requests the holders of the Class
A Bonds to eliminate the sinking provisions of the Mortgage, the Trustee, as
such a holder, will vote to amend the Class A Mortgage to eliminate the sinking
provisions accordingly. The Company intends to request the Trustee to do so at
such time as the Trustee is the sole holder of the Class A Bonds. (Article Two,
Fifty-third Supplemental)
With respect to any other amendments to the Class A Mortgage, the
Trustee will vote proportionately with what it reasonably believes will be the
vote of the holders of all other Class A Bonds. However, if the proposed
amendment of the Mortgage is an amendment or modification described under
"Modification of Mortgage" that requires the prior consent of a majority in
aggregate principal amount of the Outstanding Bonds (or if only certain series
would be affected, the Outstanding Bonds of such series), then the Trustee will
not vote in favor of that amendment unless the consent requirement has already
been met. (Article Twelve)
BOOK-ENTRY SYSTEM
If provided in the prospectus supplement, except under the
circumstances described below, SCE&G will issue the New Bonds as one or more
global Bonds (each a "Global Bond"), each of which will represent beneficial
interests in the New Bonds. Each such beneficial interest in a Global Bond is
called a "Book-Entry Bond" in this prospectus. We will deposit those Global
Bonds with, or on behalf of, The Depository Trust Company, New York, New York,
or another depository as we may subsequently designate (the "Depository")
relating to the New Bonds, and register them in the name of a nominee of the
Depository.
So long as the Depository, or its nominee, is the registered owner of a
Global Bond, the Depository or its nominee, as the case may be, will be
considered the owner of that Global Bond for all purposes under the Mortgage. We
will make payments of principal of, any premium and interest on the Global Bond
to the Depository or its nominee, as the case may be, as the registered owner of
that Global Bond. Except as set forth below, owners of a beneficial interest in
a Global Bond will not be entitled to have any individual New Bonds registered
in their names, will not receive or be entitled to receive physical delivery of
any New Bonds and will not be considered the owners of New Bonds under the
Mortgage.
Accordingly, to exercise any of the rights of the registered owners of
the New Bonds, each person holding a beneficial interest in a Global Bond must
rely on the procedures of the Depository. If that person is not a Direct
Participant (hereinafter defined), then that person must also rely on procedures
of the Direct Participant through which that person holds its interest.
The following information concerning DTC and DTC's book-entry system
has been obtained from sources that SCE&G believes to be reliable, but neither
SCE&G nor any underwriter, dealer or agent takes any responsibility for the
accuracy of that information.
<PAGE>
DTC will act as securities depository for the Global Bonds. The Global
Bonds will be issued as fully-registered securities registered in the name of
Cede & Co. (DTC's partnership nominee). One fully-registered New Bond
certificate will be issued for each issue of the New Bonds, each in the
aggregate principal amount of such issue, and will be deposited with DTC. If,
however, the aggregate principal amount of any issue exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal amount
and an additional certificate will be issued with respect to any remaining
principal amount of such issue.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by The New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the SEC.
Purchases of the New Bonds under the DTC system must be made by or
through Direct Participants, which will receive a credit for the New Bonds on
DTC's records. The ownership interest of each actual purchaser of each New Bond
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the New Bonds are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in the New
Bonds, except in the event that use of the book-entry system for the New Bonds
is discontinued.
To facilitate subsequent transfers, all New Bonds deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of New Bonds with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the New Bonds; DTC's records reflect only the
identity of the Direct Participants to whose accounts such New Bonds are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
<PAGE>
Redemption notices shall be sent to DTC. If less than all of the New
Bonds within an issue are being redeemed, DTC's practice is to determine by lot
the amount of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the New
Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to SCE&G as soon
as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
New Bonds are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Principal and interest payments on the New Bonds will be made to Cede &
Co., as nominee of DTC. DTC's practice is to credit Direct Participants'
accounts, upon DTC's receipt of funds and corresponding detail from SCE&G or the
Trustee on payable date in accordance with their respective holdings shown on
DTC's records. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustee or SCE&G, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal and interest to Cede & Co. is
the responsibility of SCE&G or the Trustee. Disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
A Beneficial Owner shall give notice of any option to elect to have its
Book-Entry Bonds repaid by SCE&G, through its Participant, to the Trustee and
shall effect delivery of such Book-Entry Bonds by causing the Direct Participant
to transfer the Participant's interest in the Global Bond or Bonds representing
such Book-Entry Bonds, on DTC's records, to the Trustee. The requirement for
physical delivery of Book-Entry Bonds in connection with a demand for repayment
will be deemed satisfied when the ownership rights in the Global Bond or Bonds
representing such Book-Entry Bonds are transferred by Direct Participants on
DTC's records.
DTC management is aware that some computer applications, systems, and
the like for processing data ("Data Systems") that are dependent upon calendar
dates, including dates before, on, and after January 1, 2000, may encounter
"Year 2000 problems." DTC has informed its Participants and other members of the
financial community (the "Industry") that it has developed and is implementing a
program so that its Data Systems, as the same relate to the timely payment of
distributions (including principal and income payments) to security holders,
book-entry deliveries, and settlement of trades within DTC ("DTC Services"),
continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan
includes a testing phase, which DTC expects to be completed within appropriate
time frames.
However, DTC's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third-party vendors from whom DTC licenses software and
hardware, and third-party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed the Industry that it is
contacting (and will continue to contact) third-party vendors from whom DTC
acquires services to: (1) impress upon them the importance of such services
being Year 2000 compliant; and (2) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, DTC is in the process of developing such contingency plans as it deems
appropriate.
According to DTC, the foregoing information with respect to DTC has
been provided to the Industry for informational purposes only and is not
intended to serve as a representation, warranty, or contract modification of any
kind.
DTC may discontinue providing its services as securities depository
with respect to the New Bonds at any time by giving reasonable notice to SCE&G
or the Trustee. Under those circumstances, in the event that a successor
securities depository is not obtained, New Bonds in certificated form are
required to be printed and delivered. SCE&G may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor securities
depository). In that event, New Bonds in certificated form will be printed and
delivered.
Neither SCE&G nor the Trustee will have any responsibility or
obligation to the Depositary, any Participant in the book-entry system or any
Beneficial Owner with respect to (1) the accuracy of any records maintained by
the Depository or any Participant; (2) the payment by the Depository or by any
Participant of any amount due to any Participant or Beneficial Owner,
respectively, in respect of the principal amount or purchase price or redemption
price of, or interest on, any New Bonds; (3) the delivery of any notice by the
Depository or any participant; (4) the selection of the Beneficial Owners to
receive payment in the event of any partial redemption of the New Bonds; or (5)
any other action taken by the Depository or any Participant.
PLAN OF DISTRIBUTION
SCE&G may offer the New Bonds in any of three ways:
o through underwriters or dealers,
o directly to a limited number of purchasers or to a single purchaser, or
o through agents.
Each prospectus supplement will set forth:
o the terms of the offering of the New Bonds,
o the proceeds to SCE&G,
o any underwriting discounts and other items constituting
underwriters' compensation, and
o any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
From time to time, SCE&G may change any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are involved, the New Bonds being sold will be acquired
by them for their own account and they may resell the New Bonds from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale.
Underwriters may offer the New Bonds to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The applicable prospectus supplement will
name any underwriter involved in a sale of New Bonds and the cover page will
state the name of the managing underwriter. Any underwriting agreement will
provide that the obligations of the underwriters are subject to certain
conditions precedent, and that the underwriters will be obligated to purchase
all of the New Bonds to which that underwriting agreement relates if any are
purchased. SCE&G may agree to indemnify any underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933.
SCE&G may sell the New Bonds directly or through agents designated by
SCE&G from time to time. In the applicable prospectus supplement, SCE&G will
state the name of any agent involved in the offer or sale of the New Bonds as
well as any commissions payable by SCE&G to such agent. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
EXPERTS
H. Thomas Arthur, Esq. has prepared or reviewed the statements made under
"DESCRIPTION OF THE NEW BONDS," as to matters of law and legal conclusions. Such
statements are made in reliance upon his authority as an expert. Mr. Arthur is a
Senior Vice President, General Counsel and an Assistant Secretary of SCE&G.
The consolidated financial statements incorporated by reference from
SCE&G's Annual Report on Form 10-K for the year ended December 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated, by reference into this prospectus and is so
incorporated in reliance upon the report of such firm, given upon their
authority as experts in accounting and auditing.
VALIDITY OF THE NEW BONDS
McNair Law Firm, P.A., of Columbia, South Carolina, and H. Thomas
Arthur, Esq. of SCE&G will pass upon the validity of the New Bonds for SCE&G.
Thelen Reid & Priest LLP, of New York, New York, will pass upon the validity of
the New Bonds for any underwriters. Thelen Reid & Priest LLP will rely as to all
matters of South Carolina law upon the opinion of the General Counsel of SCE&G.
Thelen Reid & Priest LLP, from time to time, renders legal services to SCE&G.
At July 31, 1999, H. Thomas Arthur, Esq. owned beneficially 9,331
shares of SCANA Corporation's Common Stock, including shares acquired by the
trustee under its Stock Purchase-Savings Program by use of contributions made by
those attorneys and earnings thereon and including shares purchased by the
trustee by use of SCANA contributions and earnings thereon.
<PAGE>
$150,000,000
South Carolina Electric & Gas Company
First Mortgage Bonds
7.5% Series due June 15, 2005
PROSPECTUS SUPPLEMENT
Joint Book-Running Managers
PaineWebber Incorporated Banc of America Securities LLC
June 6, 2000
