Exhibit H
The Southern Company
Proposed Notice of Proceedings
The Southern Company ("Southern") is a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"). Pursuant
to an order dated March 13, 1996 (Holding Company Act Rel. No. 26489), Southern
is currently authorized to issue and sell from time to time, prior to April 1,
2001, short-term and/or term-loan notes to lenders and commercial paper to
dealers in an aggregate principal amount at any one time outstanding of up to $2
billion.1 At December 31, 2000, commercial paper and notes evidencing bank
borrowings in an aggregate principal amount of $558,000,000 were outstanding
under such authorization.2 Southern requests an extension of the authorization
period to April 1, 2008.
Southern proposes to effect borrowings from one or more banks or other
lending institutions, provided that the aggregate amount of borrowings by
Southern from such institutions, together with the aggregate amount of
commercial paper at any time issued and outstanding, will not exceed $2 billion.
Such borrowings will be evidenced by notes to be dated as of the date of such
borrowings and to mature in not more than seven (7) years after the date of
issue, or by "grid" notes evidencing all outstanding borrowings from each lender
to be dated as of the date of the initial borrowings and to mature in not more
than seven (7) years after the date of issue. Southern proposes that it may
provide that any note evidencing such borrowings may not be prepayable, or that
it may be prepaid with payment of a premium that is not in excess of the stated
interest rate on the note to be prepaid, which premium, in the case of a note
having a maturity of more than one year, would generally thereafter decline to
the date of the note's final maturity.
Borrowings from the lending institutions will be at the lender's
prevailing rate offered to corporate borrowers of similar quality, which will
not exceed the prime rate or (i) LIBOR plus up to 3%, or (ii) a rate not to
exceed the prime rate to be established by bids obtained from the lenders prior
to a proposed borrowing.
__________________________
1 At September 30, 2000, the maximum aggregate principal amount of notes that
may be issued pursuant to the exemption from the provisions of Section 6(a) of
the Act afforded by the first sentence of Section 6(b) was $175,155,577.
2 Effective September 28, 1995, Southern established a commercial paper program
with J.P. Morgan Securities, Inc., Lehman Brothers, Inc. and Morgan Stanley &
Co. Incorporated, as dealers. At December 31, 2000, Southern had issued and
outstanding commercial paper notes in an aggregate principal amount of
$558,000,000.
1
<PAGE>
Southern may pay a commitment fee based upon the unused portion of each
lender's commitment. The total fee is determined by multiplying the unused
portion of the lender's commitment by up to 1/2 of 1%. Compensating balances may
be used in lieu of fees to compensate certain of the lenders.3
Southern also proposes that its authority to issue and sell commercial
paper to or through dealers from time to time be extended to April 1, 2008. Such
commercial paper will be in the form of promissory notes with varying maturities
not to exceed one year, which maturities may be subject to extension to a final
maturity not to exceed 390 days. Actual maturities will be determined by market
conditions, the effective interest costs and Southern's anticipated cash flow,
including the proceeds of other borrowings, at the time of issuance. The
commercial paper notes will be issued in denominations of not less than $50,000
and will not by their terms be prepayable prior to maturity.
The commercial paper will be sold by Southern directly to or through a
dealer or dealers (the "dealer"). The discount rate (or the interest rate in the
case of interest-bearing notes), including any commissions, will not be in
excess of the discount rate per annum (or equivalent interest rate) prevailing
at the date of issuance for commercial paper of comparable quality of the
particular maturity sold by issuers thereof to commercial paper dealers.
No commission or fee will be payable in connection with the issuance
and sale of commercial paper, except for a commission not to exceed 1/8 of 1%
per annum payable to the dealer in respect of commercial paper sold through the
dealer as principal. The dealer will reoffer such commercial paper at a discount
rate of up to 1/8 of 1% per annum less than the prevailing discount rate to the
issuer or at an equivalent cost if sold on an interest-bearing basis.
Each certificate under Rule 24 with respect to the issue and sale of
commercial paper will include the name or names of the commercial paper dealers,
the amount of commercial paper outstanding as of the end of each quarter and
information with respect to the discount rate and interest rate.
Southern proposes that the proceeds of the short-term and term-loan
notes and/or commercial paper for which Southern is requesting an extension of
authorization be utilized to acquire the securities of associate companies in
transactions that are exempt from Section 9(a)(1) of the Act pursuant to Rule
52(d), to make capital contributions or open account advances to subsidiaries in
transactions that are exempt from Section 12(b) of the Act pursuant to Rule
45(b)(4), to acquire the securities of one or more "exempt wholesale generators"
("EWGs"), "foreign utility companies" ("FUCOs") or "exempt telecommunications
companies" in transactions that are exempt from the application requirements of
the Act pursuant to Section 32(g), Section 33(c) or Section 34(d) of the Act, as
___________________________
3 Currently, Southern has two syndicated credit facilities with 34 banks
totaling commitments of $2.1 billion, as well as several uncommitted facilities.
2
<PAGE>
applicable, and/or as authorized pursuant to orders of the Commission issued in
separate proceedings or as permitted under other rules of general applicability
(including general corporate purposes such as repayment of indebtedness).
Southern states that it will not use any portion of the proceeds from the
borrowings and/or commercial paper sales for which authority is sought to be
extended to make investments in subsidiaries, except in accordance with and
subject to any limitations contained in the Commission's orders granting the
applications in those related proceedings and/or in accordance with any
applicable exemption, including Rules 45(b) and 52.
A portion of the borrowings and commercial paper for which Southern is
requesting an extension of authorization is required to enable Southern to fund
possible future investments in EWGs and FUCOs, subject to any investment
limitation as may be provided by the Commission, and for bridge financing for
other equity investments in Southern's wholesale generation subsidiary. Southern
may also use a portion of such borrowings and commercial paper to pay for
environmental and other contingencies.
Any short-term borrowings outstanding after March 31, 2008 will be
retired from internal sources of cash or the proceeds of financings approved in
separate filings, including but not limited to File Nos. 70-8277 and 70-8435,
refinancings of EWG and FUCO indebtedness on a non-recourse basis and other
distributions from EWGs and FUCOs.
Southern requests authority to file certificates of notification under
Rule 24 relating to the above-described financing transactions on a quarterly
basis (within 45 days following the close of each calendar quarter).
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
3
