CERTIFICATE OF NOTIFICATION
(Certificate No. 2)
Filed by
THE SOUTHERN COMPANY, et al.
Pursuant to the orders of the Securities and Exchange Commission
dated December 13, 1994 (the "December 1994 Order") and July 13,
1995 (the "July 1995 Order"), in the matter of File No. 70-8505.
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The Southern Company ("Southern"), a registered holding
company, and its direct and indirect wholly-owned subsidiary
companies, Mobile Energy Services Holdings, Inc. (formerly Mobile
Energy Services Company, Inc.) ("Mobile Energy"), Mobile Energy
Services Company, L.L.C. ("Project Company"), and Southern
Electric International, Inc. ("Southern Electric"), hereby
certify to said Commission, pursuant to Rule 24, that the
following transactions have been consummated in accordance with
and for the purposes represented in the Post-Effective Amendments
to the Application or Declaration in the above-referenced
proceeding and the orders of this Commission herein:
1. On July 13, 1995, Mobile Energy and Southern Electric
formed Project Company, and on July 14, 1995, Mobile Energy
transferred, conveyed and assigned to Project Company all of its
right, title and interest in the Energy Complex and associated
assets and contract rights, subject to certain liabilities of
Mobile Energy under agreements relating to $85 million principal
amount of outstanding tax-exempt bonds (the "1984 Tax-Exempt
Bonds") issued by The Industrial Development Board of The City of
Mobile, Alabama (the "Board"), and a $190 million unsecured
promissory note (the "Interim Note") payable to Southern. Prior
to Project Company's assumption of liability with respect to the
Interim Note, the terms thereof were modified and the maturity
extended in accordance with the July 1995 Order.
2. On August 24, 1995, Project Company issued and sold
(and Mobile Energy guaranteed) $255,210,000 principal amount of
First Mortgage Bonds, and applied the net proceeds thereof
($252,976,912 after the underwriters' discount) to repay the
Interim Note to Southern, to fund a payment of approximately
$32.3 million to Barclays Bank PLC to terminate certain interest
rate swap agreements previously entered into in accordance with
the December 1994 Order, and to pay certain other costs and
expenses associated with the acquisition and financing of and
improvements to the Energy Complex. The First Mortgage Bonds
mature in 2017, have a weighted average life of 12.5 years as of
the date of closing, and bear interest at 8.665%, or
approximately 2.07% over the yield to maturity of an actively-
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traded Treasury note with a maturity equal to the average
weighted life of the First Mortgage Bonds.
3. On August 24, 1995, Project Company and Mobile Energy
(as guarantor) entered into an amended and restated facility
lease agreement with the Board with respect to the lease of
certain solid waste recovery facilities previously financed by
the Board through the issuance of the 1984 Tax-Exempt Bonds. In
connection therewith, the Board issued a new series of tax-exempt
bonds (the "1995 Tax-Exempt Bonds") and applied the proceeds
thereof ($85 million) to defease and redeem the 1984 Tax-Exempt
Bonds in full. The coupon rate on the 1995 Tax-Exempt Bonds is
6.95%. As a result of this transaction, Southern has been
relieved of all obligations and liabilities to Scott Paper
Company under its guaranty of Project Company's obligations under
agreements relating to the 1984 Tax-Exempt Bonds and certain bank
letters of credit supporting such bonds.
4. On August 24, 1995, Project Company and Mobile Energy
(as guarantor) entered into a revolving credit facility with
Banque Paribas, New York Office, providing for borrowings
thereunder in an aggregate amount at any one time outstanding not
to exceed $15 million to fund working capital requirements.
5. On August 24, 1995, Project Company and Mobile Energy
executed and delivered various security documents securing the
First Mortgage Bonds, the 1995 Tax-Exempt Bonds and borrowings
under the working capital facility.
6. On August 24, 1995, Southern executed and delivered a
guarantee in lieu of an approximately $21.9 million cash debt
service reserve required under the terms of instruments securing
the First Mortgage Bonds, and entered into a revolving credit and
letter of credit reimbursement agreement with Banque Paribas, New
York Branch, pursuant to which Banque Paribas provided a
$5,908,000 letter of credit to the trustee for the holders of the
1995 Tax-Exempt Bonds for deposit into a debt service reserve
account, a $322,418 letter of credit to the trustee for the
holders of the 1984 Tax-Exempt Bonds in order to defease interest
payable September 1, 1995, on such bonds, and an $11 million
revolving credit facility to enable Southern to finance amounts
required to be advanced by Southern under the terms of an $11
million guaranty provided by Southern in lieu of a cash funded
maintenance reserve account required to be maintained under the
terms of instruments securing the First Mortgage Bonds, the 1995
Tax-Exempt Bonds, and the working capital facility. Southern
also provided a $2 million guaranty to the owners of the paper,
pulp and tissue mills as credit support for the maintenance
reserve obligations of Project Company under the Master Operating
Agreement.
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7. Filed herewith is the following exhibit:
Exhibit F-1 - "Past Tense" Opinion of Troutman Sanders
LLP dated August 29, 1995.
Dated: August 29, 1995 THE SOUTHERN COMPANY
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
MOBILE ENERGY SERVICES HOLDINGS, INC.
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
MOBILE ENERGY SERVICES COMPANY, L.L.C.
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
SOUTHERN ELECTRIC INTERNATIONAL, INC.
By /s/Tommy Chisholm
Tommy Chisholm
Secretary
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Troutman Sanders LLP
600 Peachtree Street
Suite 5200
Atlanta, GA 30308
404-885-3000
August 29, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Re: The Southern Company, et al. - Form U-1 Application or
Declaration (File No. 70-8505)
Ladies and Gentlemen:
We are familiar with the Post-Effective Amendments to the
statement on Form U-1 referred to above, and are furnishing this
opinion with respect to the transactions proposed therein, which
include, among other proposals, (i) the acquisition by Mobile
Energy Services Holdings, Inc. (formerly Mobile Energy Services
Company, Inc. ("Mobile Energy") and Southern Electric
International, Inc. ("Southern Electric") of all of the
membership interests of Mobile Energy Services Company, L.L.C.,
an Alabama limited liability company ("Project Company"), and the
transfer, conveyance and assignment by Mobile Energy to Project
Company of all of Mobile Energy's right, title and interest in
the energy and recovery complex located in Mobile, Alabama
previously acquired by Mobile Energy from Scott Paper Company
(the "Energy Complex"), together with related assets and
liabilities; (ii) the issue and sale by Project Company of
approximately $255 million of first mortgage bonds, and the
guaranty thereof by Mobile Energy; (iii) the execution of
agreements among Project Company, Mobile Energy (as guarantor)
and The Industrial Development Board of the City of Mobile,
Alabama (the "Board") with respect to the issuance and sale by
the Board of $85 million principal amount of tax-exempt bonds;
(iv) the entering into by Project Company of a $15 million
working capital revolving credit facility, and the guaranty
thereof by Mobile Energy; (v) the execution and delivery by
Southern for the benefit of the holders of the aforementioned
first mortgage bonds and tax-exempt bonds and the provider of the
aforementioned working capital facility of various credit support
instruments in the form of guaranties and reimbursement
undertakings with respect to bank letters of credit in an
aggregate amount of approximately $41.5 million; and (vi) the
entering into by Southern of an $11 million revolving credit
facility to fund advances required under the terms of a guaranty
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Securities and Exchange Commission
August 29, 1995
Page 2
of a maintenance reserve fund securing the first mortgage bonds,
tax-exempt bonds and working capital facility.
We are of the opinion that:
(a) Southern, Mobile Energy, Project Company and
Southern Electric are each a validly organized and duly
existing corporation under the laws of the State of its
incorporation or organization;
(b) the transactions described in the Post-Effective
Amendments to the Application or Declaration on Form U-1
have been consummated in accordance with such statement, as
amended, and the orders of this Commission dated December
13, 1994 and July 13, 1995, except to the extent that
jurisdiction with respect to any matter was expressly
reserved;
(c) all state laws applicable to the proposed
transactions have been complied with;
(d) Mobile Energy and Southern Electric, as the sole
members of Project Company, are entitled to the rights and
privileges appertaining thereto set forth in the Articles of
Organization of Project Company defining such rights and
privileges;
(e) (i) the first mortgage bonds and notes evidencing
working capital borrowings by Project Company, and the
guaranty thereof by Mobile Energy, (ii) Project Company's
obligations in respect of the tax-exempt bonds issued by the
Board, and Mobile Energy's guaranty thereof, and (iii) the
guaranties and other forms of credit support provided by
Southern, all as described in said Post-Effective Amendments
and the Commission's orders, are each legal, valid and
binding obligations of Project Company, Mobile Energy, or
Southern, as the case may be; and
(f) the consummation of the transactions described
above and of the other transactions described in the Post-
Effective Amendments to the Application or Declaration, did
not violate the legal rights of the holders of any
securities issued by Southern, Mobile Energy, Project
Company, Southern Electric or any associate company thereof.
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Securities and Exchange Commission
August 29, 1995
Page 3
We are admitted to practice in the State of Georgia only,
and we are opining herein only as to the effect on the subject
transactions of applicable federal laws, the internal laws of the
State of Georgia, and the General Corporation Law of the State of
Delaware. For purposes of this opinion, we assume that
applicable laws of States other than Georgia or Delaware (to the
limited extent to which we opine on Delaware law) would be
construed consistently with the laws of Georgia.
We hereby consent to the use of this opinion in connection
with the above-mentioned Post-Effective Amendments to the
statement on Form U-1, and to the filing thereof with the
Commission at the time of the filing by the applicants of a
certificate of notification pursuant to Rule 24.
Very truly yours,
/s/Troutman Sanders LLP
Troutman Sanders LLP
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