Filed pursuant to Rule 424(b)(5)
Registration No. 333-38003 and 333-38003-01
PROSPECTUS SUPPLEMENT
---------------------
(TO PROSPECTUS DATED NOVEMBER 12, 1997)
$400,000,000
PP&L CAPITAL FUNDING, INC.
MEDIUM-TERM NOTES, SERIES A
DUE FROM NINE MONTHS TO FORTY YEARS FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED AS TO
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,
AND INTEREST BY
PP&L RESOURCES, INC.
PP&L Capital Funding, Inc. (the "Company"), may from time to
time offer its Medium-Term Notes, Series A (the "Notes"), in the
aggregate principal amount of up to $400,000,000, subject to
reduction as a result of the sale by the Company of other Debt
Securities, as described in the accompanying Prospectus. Each
Note will mature on a date from nine months to forty years from
the date of issue, as specified in the applicable pricing
supplement hereto (each, a "Pricing Supplement"), and may be
subject to redemption at the option of the Company or repayment
at the option of the Holder thereof, in each case, in whole or in
part, prior to its Stated Maturity Date, if so specified in the
applicable Pricing Supplement. The Notes will be issued in
minimum denominations of $1,000 and integral multiples thereof,
unless otherwise specified in the applicable Pricing Supplement.
The Notes will be unconditionally guaranteed by the Company's
parent, PP&L Resources, Inc. ("PP&L Resources"), as to payment of
principal, premium, if any, and interest. See "Description of
the Debt Securities -- Guarantee of PP&L Resources; Holding
Company Structure" in the accompanying Prospectus.
(continued on next page)
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR ANY SUPPLEMENT HERETO.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
=========================================================================
Agents' Discounts
Price to and Proceeds to
Public(1) Commissions(1)(2) Company(1)(3)
-------------------------------------------------------------------------
Per Note . . 100% .125%-.750% 99.875%-99.250%
-------------------------------------------------------------------------
Total . . . . $400,000,000 $500,000- $3,000,000 $399,500,000 -
$397,000,000
=========================================================================
(1) Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, First Chicago Capital Markets, Inc., Goldman, Sachs &
Co. and Morgan Stanley & Co. Incorporated, and any additional agents
as may be appointed from time to time (the "Agents"), individually or
in a syndicate, may purchase Notes, as principal, from the Company for
resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the
applicable Agent or, if so specified in the applicable Pricing
Supplement, for resale at a fixed offering price. Unless otherwise
specified in the applicable Pricing Supplement, any Note sold to an
Agent as principal will be purchased by such Agent at a price equal to
100% of the principal amount thereof less a percentage of the
principal amount equal to the commission applicable to an agency sale
(as described below) of a Note of identical maturity. If agreed to by
the Company and an Agent, such Agent may utilize its reasonable
efforts on an agency basis to solicit offers to purchase the Notes at
100% of the principal amount thereof, unless otherwise specified in
the applicable Pricing Supplement. The Company will pay a commission
to an Agent, ranging from .125% to .750% of the principal amount of a
Note, depending upon its stated maturity, sold through an Agent.
Commissions with respect to Notes with stated maturities in excess of
30 years that are sold through such Agent will be negotiated between
the Company and such Agent at the time of such sale. The Company may
also sell Notes directly to investors on its own behalf, in which case
no commission will be payable. See "Supplemental Plan of
Distribution."
(2) The Company has agreed to indemnify the Agents against, and to provide
contribution with respect to, certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Supplemental Plan of Distribution."
(3) Before deducting expenses payable by the Company estimated at
$650,000.
-----------------
The Notes are being offered on a continuous basis by the
Company to or through the Agents, each of which has agreed to use
its reasonable efforts to solicit orders to purchase the Notes.
The Notes may also be sold to an Agent, as principal, for resale
to investors or other purchasers. In addition, the Company may
sell Notes directly to investors on its own behalf. Unless
otherwise specified in the applicable Pricing Supplement, the
Notes will not be listed on any securities exchange. There is no
assurance that the Notes offered hereby will be sold or, if sold,
that there will be a secondary market for the Notes or liquidity
in the secondary market if one develops. The Company reserves
the right to cancel or modify the offer made hereby without
notice. The Company or an Agent, if it solicits the offer on an
agency basis, may reject any offer to purchase Notes in whole or
in part. See "Supplemental Plan of Distribution."
-----------------
MERRILL LYNCH & CO.
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
-----------------
The date of this Prospectus Supplement is November 12, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF NOTES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE
PURCHASE OF NOTES TO COVER SYNDICATE SHORT POSITIONS AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES SEE "SUPPLEMENTAL PLAN OF DISTRIBUTION."
(continued from previous page)
The Company may issue Notes that bear interest at fixed
rates ("Fixed Rate Notes") or at floating rates ("Floating Rate
Notes"). The applicable Pricing Supplement will specify whether
a Floating Rate Note is a Regular Floating Rate Note, a Floating
Rate/Fixed Rate Note or an Inverse Floating Rate Note and whether
the rate of interest thereon is determined by reference to one or
more of the CMT Rate, the Commercial Paper Rate, the Federal
Funds Rate, LIBOR, the Prime Rate or the Treasury Rate (each, an
"Interest Rate Basis"), or any other interest rate basis or
formula, as adjusted by any Spread and/or Spread Multiplier.
Interest on each Floating Rate Note will accrue from its date of
issue and, unless otherwise specified in the applicable Pricing
Supplement, will be payable monthly, quarterly, semiannually or
annually in arrears, as specified in the applicable Pricing
Supplement, and at Maturity. Unless otherwise specified in the
applicable Pricing Supplement, the rate of interest on each
Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually or annually, as specified in the
applicable Pricing Supplement. Interest on each Fixed Rate Note
will accrue from its date of issue and, except in the limited
circumstances described in this Prospectus Supplement or as
otherwise specified in the applicable Pricing Supplement, will be
payable semiannually in arrears on February 15 and August 15 of
each year and at Maturity. See "Description of the Notes --
Payment of Interest and Principal" and " - Interest."
The interest rate, or formula for the determination of the
interest rate, if any, applicable to each Note and the other
variable terms of each Note will be established by the Company on
the date of issue of such Note and will be specified in the
applicable Pricing Supplement.
Each Note will be issued in book-entry form (a Note so
represented, a "Book-Entry Note") or in fully registered
certificated form (a Note so represented, a "Certificated Note"),
as specified in the applicable Pricing Supplement. Each Book-
Entry Note will be represented by one or more fully registered
global securities (the "Global Securities") deposited with or on
behalf of The Depository Trust Company (or such other depositary
as may be identified in the applicable Pricing Supplement), as
Depositary, and registered in the name of the Depositary or the
Depositary's nominee. Interests in the Global Securities will be
shown on, and transfers thereof will be effected only through,
records maintained by the Depositary (with respect to its
participants) and the Depositary's participants (with respect to
beneficial owners). Except in limited circumstances, Book-Entry
Notes will not be exchangeable for Certificated Notes. See
"Description of the Notes -- Book-Entry Notes."
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<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the
Notes offered hereby supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and
provisions of the Debt Securities set forth under "Description of
the Debt Securities" in the accompanying Prospectus, to which
general description reference is hereby made. The following
summary of certain terms and provisions of the Notes, the
Guarantees and the Indenture does not purport to be complete and
is qualified in its entirety by reference to the actual
provisions of the Notes, the Guarantees and the Indenture.
Capitalized terms used but not defined herein shall have the
meanings given to them in the accompanying Prospectus, the Notes
or the Indenture, as the case may be. The particular terms of
the Notes, and provisions of the Notes that vary from the general
provisions of the Notes described below and the general
provisions of the Debt Securities described in the accompanying
Prospectus, will be described in the applicable Pricing
Supplement.
GENERAL
The Notes will be issued as a series of Debt Securities and
will be limited in aggregate principal amount to $400,000,000,
subject to reduction as a result of the sale of other Debt
Securities as described in the accompanying Prospectus. The
Notes will be issued under the Indenture among the Company, the
Guarantor and The Chase Manhattan Bank, as trustee (the
"Trustee"), dated as of November 1, 1997, as supplemented by
Supplemental Indenture No. 1 thereto relating to the Notes
(together, the "Indenture"), which is more fully described in the
accompanying Prospectus. The Company may, from time to time,
without the consent of the Holders of the Notes, provide for the
issuance of other Indenture Securities under the Indenture in
addition to the Notes and Debt Securities offered hereby and by
the accompanying Prospectus. See "Description of the Debt
Securities-- General" in the accompanying Prospectus.
The Notes will be unsecured obligations of the Company, and
will be unconditionally guaranteed by PP&L Resources as to
payment of principal, premium, if any, and interest as set forth
in the accompanying Prospectus under "Description of the Debt
Securities--Guarantee of PP&L Resources; Holding Company
Structure." The Notes will be denominated in and payable in
United States dollars.
PP&L Resources conducts it operations primarily through its
wholly-owned subsidiaries, and substantially all of PP&L
Resources' consolidated assets are held by its subsidiaries.
Accordingly, the cash flow of PP&L Resources and the consequent
ability of PP&L Resources to service its debt, including its
obligations under the Guarantee, are largely dependent upon the
earnings of such subsidiaries and the distribution or other
payment of such earnings to PP&L Resources in the form of
dividends, loans or advances, and repayment of loans or advances
from PP&L Resources. The subsidiaries are separate and distinct
legal entities and (except for the Company) have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the
Notes or to make any funds available therefor, whether by
dividends, loans or other payments.
Because PP&L Resources is a holding company, its obligations
under the Guarantee will be effectively subordinated to all
existing and future indebtedness, trade payables, guarantees and
lease, letter of credit and other obligations of its
subsidiaries. Therefore, PP&L Resources' rights and the rights
of its creditors, including the rights of the holders of the
Notes under the Guarantee, to participate in the assets of any
subsidiary (other than the Company) upon the latter's liquidation
or reorganization will be subject to the prior claims of such
subsidiary's creditors, except to the extent that PP&L Resources
may itself be a creditor with recognized claims against the
subsidiary, in which case the claims of PP&L Resources would
still be effectively subordinate to any security interest in, or
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<PAGE>
mortgages or other liens on, the assets of such subsidiary and
would be subordinate to any indebtedness of such subsidiary
senior to that held by PP&L Resources. Although certain debt
instruments to which PP&L Resources and its subsidiaries are
parties impose limitations on the incurrence of additional
indebtedness, both PP&L Resources and its subsidiaries retain the
ability to incur substantial additional indebtedness and lease,
letter of credit and other obligations. See "Description of the
Debt Securities--Guarantee of PP&L Resources; Holding Company
Structure" in the accompanying Prospectus.
Each Note will mature on a date from nine months to forty
years from its date of issue (the "Stated Maturity Date"), as
specified in the applicable Pricing Supplement, unless the
principal thereof becomes due and payable prior to the Stated
Maturity Date, whether by the declaration of acceleration of
maturity, notice of redemption at the option of the Company,
notice of the Holder's option to elect repayment or otherwise
(the Stated Maturity Date or such prior date, as the case may be,
is herein referred to as the "Maturity").
Notes will either be Fixed Rate Notes or Floating Rate
Notes, as specified in the applicable Pricing Supplement.
Interest rates offered by the Company with respect to the Notes
may differ depending upon, among other factors, the aggregate
principal amount of Notes purchased in any single transaction.
Notes with different variable terms other than interest rates may
also be offered concurrently to different investors. Interest
rates or formulas and other terms of Notes are subject to change
by the Company from time to time, but no such change will affect
any Note previously issued or as to which an offer to purchase
has been accepted by the Company.
Each Note will be issued as a Book-Entry Note represented by
one or more fully registered Global Securities or as a fully
registered Certificated Note. The authorized denominations of
each Note will be $1,000 and integral multiples thereof, unless
otherwise specified in the applicable Pricing Supplement. A
beneficial interest in a Global Security will be shown on, and
transfers or exchanges thereof will be effected only through,
records maintained by the Depository (with respect to interests
of its participants) and its participants (with respect to
interests of persons other than its participants), as described
below under "--Book-Entry Notes."
Certificated Notes will be exchangeable for other
Certificated Notes of any authorized denominations and of a like
aggregate principal amount and tenor, and may be presented for
registration of transfer, in each case, as described under
"Description of the Debt Securities -- Payment of Debt
Securities; Transfer; Exchanges" in the accompanying Prospectus.
Unless the applicable Pricing Supplement provides otherwise,
the price at which each Note will be issued (the "Issue Price"),
will be 100% of the principal amount of the Note. Notes will not
be issued as discount securities, at prices below stated
principal amounts, or having an original issue discount for U.S.
federal income tax purposes, unless the applicable Pricing
Supplement so provides and, if applicable, describes potential
U.S. federal income tax consequences.
The Pricing Supplement relating to each Note will describe
the following terms: (i) whether such Note is a Fixed Rate Note
or a Floating Rate Note; (ii) the Issue Price of such Note, which
may be expressed as a percentage of the aggregate principal
amount thereof; (iii) the date on which such Note will be issued
(the "Original Issue Date"); (iv) the Stated Maturity Date of
such Note; (v) if such Note is a Fixed Rate Note, the rate per
annum at which such Note will bear interest and the Interest
Payment Dates; (vi) if such Note is a Floating Rate Note, the
Interest Rate Basis, the Initial Interest Rate, the Interest
Reset Period, Interest Reset Dates, the Interest Payment Dates,
the Index Maturity, the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the Spread and/or Spread
Multiplier, if any (all as defined below), and other terms
relating to the particular method of calculating the interest
rate or rates on such Note; (vii) whether such Note may be
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<PAGE>
redeemed at the option of the Company prior to its Stated
Maturity Date and, if so, the provisions relating to such
redemption; (viii) any sinking fund or other mandatory redemption
provisions applicable to such Note; (ix) any provisions for the
repayment by the Company of such Note at the option of the
Holder; and (x) any other terms of such Note not inconsistent
with the provisions of the Indenture.
PAYMENT OF INTEREST AND PRINCIPAL
Payments of interest on the Notes, other than interest
payable at Maturity, will be made by check mailed to the address
of the Holders of such Notes as of the Regular Record Date (as
hereinafter defined) for each Interest Payment Date (as
hereinafter defined); provided, however, that (a) if the Original
Issue Date of a Note is after a Regular Record Date and before
the corresponding Interest Payment Date, interest for the period
from and including the Original Issue Date for such Note to but
excluding such Interest Payment Date will be paid on the next
succeeding Interest Payment Date to the Holder of such Note on
the related Regular Record Date; (b) if and to the extent the
Company defaults in the payment of the interest due on any Note
on any Interest Payment Date, such defaulted interest will be
paid as described under "Description of the Debt Securities--
Payment of Debt Securities; Transfers; Exchanges" in the
accompanying Prospectus; (c) in the case of the Depository, such
payment may be made in accordance with any other arrangements
then in effect among the Company, Trustee or other Paying Agent
and the Depository; and (d) a Holder of $10,000,000 or more in
aggregate principal amount of Notes (whether having identical or
different terms and provisions) will be entitled to receive
interest payments, if any, on any Interest Payment Date other
than at Maturity by wire transfer of immediately available funds
if appropriate wire transfer instructions have been received in
writing by the Trustee not less than 15 days prior to such
Interest Payment Date. Any such wire transfer instructions
received by the Trustee shall remain in effect until revoked by
such Holder.
Payment of principal and premium, if any, due on the Notes
will be made upon presentation thereof (and, in the case of any
repayment on an Optional Repayment Date, upon submission of a
duly completed election form in accordance with the provisions
described below) at the office of The Chase Manhattan Bank in New
York, New York, as described under "Description of the Debt
Securities--Payment of Debt Securities; Transfers; Exchanges" in
the accompanying Prospectus.
Payment of interest, if any, due on the Notes at Maturity
will be made to the person to whom payment of the principal is
made.
So long as the Depository is the registered owner of any
Global Security, the Depository, or its nominee, as the case may
be, will be considered the sole Holder of the Book-entry Notes
represented by such Global Security for all purposes under the
Indenture, including payment. Accordingly, so long as the
Depository is the registered owner of any Global Security,
payments of principal of, and premium, if any, and interest, if
any, on Book-Entry Notes represented by such Global Security will
be made to the Beneficial Owners (as defined herein) of such
Notes, as described below under "--Book-Entry Notes."
INTEREST
General
Unless otherwise specified in the applicable Pricing
Supplement, each Note will bear interest from its Original Issue
Date at the rate per annum, in the case of a Fixed Rate Note, or
pursuant to the interest rate formula, in the case of a Floating
Rate Note, in each case as specified in the applicable Pricing
Supplement, until the principal thereof is paid or made available
for payment. Unless otherwise specified in the applicable
Pricing Supplement, interest payments in respect of Fixed Rate
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Notes and Floating Rate Notes will be made in an amount equal to
the interest accrued from and including the immediately preceding
Interest Payment Date in respect of which interest has been paid
or made available for payment (or from and including the Original
Issue Date, if no interest has been paid or made available for
payment) to but excluding the applicable Interest Payment Date or
the Maturity, as the case may be (each, an "Interest Period").
Interest on Fixed Rate Notes and Floating Rate Notes will be
payable in arrears on each Interest Payment Date and at Maturity.
Unless otherwise specified in the applicable Pricing Supplement,
the first payment of interest on any such Note originally issued
between a Regular Record Date (as hereinafter defined) and the
related Interest Payment Date will be made on the Interest
Payment Date immediately following the next succeeding Regular
Record Date to the Holder of such Note on such next succeeding
Regular Record Date. Unless otherwise specified in the
applicable Pricing Supplement, "Regular Record Date" shall mean,
with respect to any Fixed Rate Note, the January 31 or July 31,
as the case may be (whether or not a Business Day), immediately
preceding the related Interest Payment Date, and with respect to
any Floating Rate Note, the fifteenth calendar day (whether or
not a Business Day) immediately preceding the related Interest
Payment Date.
Unless otherwise specified in the applicable Pricing
Supplement (i) "Business Day" means any day, other than a
Saturday or Sunday, that is not a day on which banking
institutions or trust companies are generally authorized or
required by law, regulation or executive order to close in The
City of New York or other city in which any Paying Agent for the
Notes is located; provided, however, that, with respect to Notes
as to which LIBOR is an applicable Interest Rate Basis, such day
is also a London Business Day (as hereinafter defined), and (ii)
"London Business Day" means a day on which dealings in deposits
in United States dollars are transacted in the London interbank
market.
Fixed Rate Notes
Interest on Fixed Rate Notes will be payable on February 15
and August 15 of each year or on such other date(s) specified in
the applicable Pricing Supplement (each, an "Interest Payment
Date" with respect to Fixed Rate Notes) and at Maturity. Unless
otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months. If any Interest Payment
Date or the Maturity of a Fixed Rate Note falls on a day that is
not a Business Day, the required payment of principal, premium,
if any, and/or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no
interest will accrue on such payment for the period from and
after such Interest Payment Date or the Maturity, as the case may
be, to the date of such payment on the next succeeding Business
Day.
Floating Rate Notes
Interest on Floating Rate Notes will be determined by
reference to the applicable Interest Rate Basis or Interest Rate
Bases, which may, as described below, include (i) the CMT Rate,
(ii) the Commercial Paper Rate, (iii) the Federal Funds Rate,
(iv) LIBOR, (v) the Prime Rate, (vi) the Treasury Rate or (vii)
such other interest rate basis or interest rate formula as may be
specified in the applicable Pricing Supplement. The applicable
Pricing Supplement will specify certain terms with respect to
which each Floating Rate Note is being delivered, including:
whether such Floating Rate Note is a "Regular Floating Rate
Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note," the Fixed Rate Commencement Date, if applicable,
Fixed Interest Rate, if applicable, Interest Rate Basis or Bases,
Initial Interest Rate, if any, Initial Interest Reset Date,
Interest Reset Dates, Interest Payment Dates, Index Maturity,
Maximum Interest Rate and/or Minimum Interest Rate, if any, and
Spread and/or Spread Multiplier, if any, as such terms are
defined below. If one or more of the applicable Interest Rate
Bases is LIBOR or the CMT Rate, the applicable Pricing Supplement
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will also specify the Designated LIBOR Page or the Designated CMT
Maturity Index and Designated CMT Telerate Page, respectively, as
such terms are defined below.
The interest rate borne by the Floating Rate Notes will be
determined as follows:
(i) Unless such Floating Rate Note is designated as a
"Floating Rate/Fixed Rate Note" or an "Inverse Floating Rate
Note," or as having an Addendum attached or having
"Other/Additional Provisions" apply, in each case relating
to a different interest rate formula, such Floating Rate
Note will be designated as a "Regular Floating Rate Note"
and, except as described below or in the applicable Pricing
Supplement, will bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at
which interest on such Regular Floating Rate Note shall be
payable shall be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the
period, if any, from the date of issue to the Initial
Interest Reset Date will be the Initial Interest Rate.
(ii) If such Floating Rate Note is designated as a
"Floating Rate/Fixed Rate Note," then, except as described
below or in the applicable Pricing Supplement, such Floating
Rate Note will bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at
which interest on such Floating Rate/Fixed Rate Note shall
be payable shall be reset as of each Interest Reset Date;
provided, however, that (y) the interest rate in effect for
the period, if any, from the date of issue to the Initial
Interest Reset Date will be the Initial Interest Rate and
(z) the interest rate in effect for the period commencing on
the Fixed Rate Commencement Date to the Maturity shall be
the Fixed Interest Rate, if such rate is specified in the
applicable Pricing Supplement or, if no such Fixed Interest
Rate is specified, the interest rate in effect thereon on
the day immediately preceding the Fixed Rate Commencement
Date.
(iii) If such Floating Rate Note is designated as
an "Inverse Floating Rate Note," then, except as described
below or in the applicable Pricing Supplement, such Floating
Rate Note will bear interest at the Fixed Interest Rate
minus the rate determined by reference to the applicable
Interest Rate Basis or Bases (a) plus or minus the
applicable Spread, if any, and/or (b) multiplied by the
applicable Spread Multiplier, if any; provided, however,
that, unless otherwise specified in the applicable Pricing
Supplement, the interest rate thereon will not be less than
zero. Commencing on the Initial Interest Reset Date, the
rate at which interest on such Inverse Floating Rate Note
shall be payable shall be reset as of each Interest Reset
Date; provided, however, that the interest rate in effect
for the period, if any, from the date of issue to the
Initial Interest Reset Date will be the Initial Interest
Rate.
The "Spread" is the number of basis points (one one-
hundredth of a percentage point) to be added to or subtracted
from the related Interest Rate Basis or Bases applicable to such
Floating Rate Note. The "Spread Multiplier" is the percentage of
the related Interest Rate Basis or Bases applicable to such
Floating Rate Note and by which such Interest Rate Basis or Bases
will be multiplied to determine the applicable interest rate on
such Floating Rate Note. The "Index Maturity" is the period to
maturity of the instrument or obligation with respect to which
the related Interest Rate Basis or Bases will be calculated.
Unless otherwise specified in the applicable Pricing
Supplement, the interest rate with respect to each Interest Rate
Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or in the applicable
Pricing Supplement, the interest rate in effect on each day shall
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be (i) if such day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date (as hereinafter
defined) immediately preceding such Interest Reset Date or (ii)
if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date.
The applicable Pricing Supplement will specify whether the
rate of interest on the related Floating Rate Note will be reset
daily, weekly, monthly, quarterly, semiannually or annually or on
such other specified basis (each, an "Interest Reset Period") and
the dates on which such rate of interest will be reset (each, an
"Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Dates will be,
in the case of Floating Rate Notes which reset: (i) daily, each
Business Day; (ii) weekly, the Wednesday of each week (with the
exception of weekly reset Floating Rate Notes as to which the
Treasury Rate is an applicable Interest Rate Basis, which will
reset the Tuesday of each week, except as described below); (iii)
monthly, the third Wednesday of each month; (iv) quarterly, the
third Wednesday of March, June, September and December of each
year, (v) semiannually, the third Wednesday of the two months
specified in the applicable Pricing Supplement; and (vi)
annually, the third Wednesday of the month specified in the
applicable Pricing Supplement; provided however, that, with
respect to Floating Rate/Fixed Rate Notes, the rate of interest
thereon will not reset after the applicable Fixed Rate
Commencement Date. If any Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day,
such Interest Reset Date will be postponed to the next succeeding
Business Day, except that in the case of a Floating Rate Note as
to which LIBOR is an applicable Interest Rate Basis and such
Business Day falls in the next succeeding calendar month, such
Interest Reset Date will be the immediately preceding Business
Day.
The interest rate applicable to each Interest Reset Period
commencing on the related Interest Reset Date will be the rate
determined by the Calculation Agent as of the applicable Interest
Determination Date and calculated on or prior to the Calculation
Date (as hereinafter defined), except with respect to LIBOR,
which will be calculated on such Interest Determination Date.
The "Interest Determination Date" with respect to the CMT Rate,
the Commercial Paper Rate, the Federal Funds Rate and the Prime
Rate will be the second Business Day immediately preceding the
applicable Interest Reset Date; and the "Interest Determination
Date" with respect to LIBOR will be the second London Business
Day immediately preceding the applicable Interest Reset Date.
With respect to the Treasury Rate, the "Interest Determination
Date" will be the day in the week in which the applicable
Interest Reset Date falls on which day Treasury Bills (as
hereinafter defined) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless
that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction
may be held on the preceding Friday); provided, however, that if
an auction is held on the Friday of the week preceding the
applicable Interest Reset Date, the "Interest Determination Date"
will be such preceding Friday; provided, further, that if the
Interest Determination Date would otherwise fall on an Interest
Reset Date, then such Interest Reset Date will be postponed to
the next succeeding Business Day. The "Interest Determination
Date" pertaining to a Floating Rate Note the interest rate of
which is determined by reference to two or more Interest Rate
Bases will be the most recent Business Day which is at least two
Business Days prior to the applicable Interest Reset Date for
such Floating Rate Note on which each Interest Rate Basis is
determinable. Each Interest Rate Basis will be determined as of
such date, and the applicable interest rate will take effect on
the applicable Interest Reset Date.
Notwithstanding the foregoing, a Floating Rate Note may also
have either or both of the following: (i) a Maximum Interest
Rate, or ceiling, that may accrue during any Interest Period and
(ii) a Minimum Interest Rate, or floor, that may accrue during
any Interest Period. In addition to any Maximum Interest Rate
that may apply to any Floating Rate Note, the interest rate on
Floating Rate Notes will in no event be higher than the maximum
rate permitted by applicable law.
S-8
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Except as provided below or in the applicable Pricing
Supplement, interest will be payable, in the case of Floating
Rate Notes which reset: (i) daily, weekly or monthly, on the
third Wednesday of each month or on the third Wednesday of March,
June, September and December of each year, as specified in the
applicable Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year;
(iii) semiannually, on the third Wednesday of the two months of
each year specified in the applicable Pricing Supplement; and
(iv) annually, on the third Wednesday of the month of each year
specified in the applicable Pricing Supplement (each, an
"Interest Payment Date" with respect to Floating Rate Notes) and,
in each case, on the Maturity. If any Interest Payment Date
other than the Maturity for any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest
Payment Date will be postponed to the next succeeding Business
Day, except that in the case of a Floating Rate Note as to which
LIBOR is an applicable Interest Rate Basis and such Business Day
falls in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business Day. If
the Maturity of a Floating Rate Note falls on a day that is not a
Business Day, the required payment of principal, premium, if any,
and interest will be made on the next succeeding Business Day as
if made on the date such payment was due, and no interest will
accrue on such payment for the period from and after the Maturity
to the date of such payment on the next succeeding Business Day.
With respect to each Floating Rate Note, accrued interest is
calculated by multiplying its principal amount by an accrued
interest factor. Such accrued interest factor is computed by
adding the interest factor calculated for each day in the
applicable period for which accrued interest is being calculated.
Unless otherwise specified in the applicable Pricing Supplement,
the interest factor for each such day will be computed by
dividing the interest rate applicable to such day by 360, in the
case of Floating Rate Notes for which an applicable Interest Rate
Basis is the Commercial Paper Rate, the Federal Funds Rate, LIBOR
or the Prime Rate, or by the actual number of days in the year in
the case of Floating Rate Notes for which an applicable Interest
Rate Basis is the CMT Rate or the Treasury Rate. The interest
factor for Floating Rate Notes for which the interest rate is
calculated with reference to two or more Interest Rate Bases will
be calculated in the manner specified in the applicable Pricing
Supplement.
All percentages resulting from any calculation on Floating
Rate Notes will be rounded to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage
point rounded upwards (e.g, 9.876545% (or .09876545) would be
rounded to 9.87655% (or .0987655)), and all amounts used in or
resulting from such calculation on Floating Rate Notes will be
rounded to the nearest cent (with one-half cent being rounded
upwards).
Unless otherwise specified in the applicable Pricing
Supplement, the Trustee will be the "Calculation Agent." Upon
request of the Holder of any Floating Rate Note, the Calculation
Agent will disclose the interest rate then in effect and, if
determined, the interest rate that will become effective as a
result of a determination made for the next succeeding Interest
Reset Date with respect to such Floating Rate Note. Unless
otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar
day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest
Payment Date or the Maturity, as the case may be.
Unless otherwise specified in the applicable Pricing
Supplement, the Calculation Agent shall determine each applicable
interest rate in accordance with the following provisions. The
Calculation Agent's determination of any interest rate will be
conclusive and binding in the absence of any manifest error.
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<PAGE>
CMT RATE. Unless otherwise specified in the applicable
Pricing Supplement, "CMT Rate" means, with respect to any
Interest Determination Date relating to a Floating Rate Note for
which the interest rate is determined with reference to the CMT
Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page under the caption
"...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page
is 7052, the weekly or monthly average, as specified in the
applicable Pricing Supplement, for the week or the month, as
applicable, ended immediately preceding the week or the month, as
applicable, in which the related CMT Rate Interest Determination
Date falls. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate
Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index as published
by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15 (519), Selected Interest Rates" or any
successor publication ("H.15 (519)"). If such rate is no longer
published or is not published by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on such CMT
Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity
Index) for the CMT Rate Interest Determination Date with respect
to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in H.15(519).
If such information is not provided by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on the
CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market offered rates as of
approximately 3:30 P.M., New York City time, on such CMT Rate
Interest Determination Date reported, according to their written
records, by three leading primary United States government
securities dealers in The City of New York (which may include the
Agents or their affiliates) (each, a "Reference Dealer) selected
by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed
rate obligations of the United States ("Treasury Notes") with an
original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation
Agent is unable to obtain three such Treasury Note quotations,
the CMT Rate on such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to
maturity based on the arithmetic mean of the secondary market
offered rates as of approximately 3:30 P.M., New York City time,
on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the
number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100
million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offered rates obtained and
neither the highest nor the lowest of such quotations will be
eliminated; provided, however, that if fewer than three Reference
Dealers so selected by the Calculation Agent are quoting as
mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on
such CMT Rate Interest Determination Date, or if no such CMT Rate
is then in effect, the interest rate on the applicable Note will
be the Initial Interest Rate. If two Treasury Notes with an
original maturity as described in the second preceding sentence
have remaining terms to maturity equally close to the Designated
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<PAGE>
CMT Maturity Index, the Calculation Agent will obtain quotations
for the Treasury Note with the shorter remaining term to
maturity.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service (or any successor service) on the page
specified in the applicable Pricing Supplement (or any other page
as may replace such page on such service) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519).
If no such page is specified in the applicable Pricing
Supplement, the Designated CMT Telerate Page shall be 7052 for
the most recent week.
"Designated CMT Maturity Index" means the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7,
10, 20 or 30 years) specified in the applicable Pricing
Supplement with respect to which the CMT Rate will be calculated
or, if no such maturity is specified in the applicable Pricing
Supplement, 2 years.
COMMERCIAL PAPER RATE. Unless otherwise specified in the
applicable Pricing Supplement, "Commercial Paper Rate" means,
with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with
reference to the Commercial Paper Rate (a "Commercial Paper Rate
Interest Determination Date"), the Money Market Yield (as
hereinafter defined) on such date of the rate for commercial
paper having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) under the heading
"Commercial Paper - Nonfinancial." In the event that such rate
is not published by 3:00 P.M., New York City time, on the related
Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be the
Money Market Yield of the rate for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as
published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S.
Government Securities," or any successor publication ("Composite
Quotations") under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be
equivalent to an Index Maturity of 30 days or 90 days,
respectively). If such rate is not yet published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City
time, on the related Calculation Date, then the Commercial Paper
Rate on such Commercial Paper Rate Interest Determination Date
will be calculated by the Calculation Agent and will be the Money
Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial
Paper Rate Interest Determination Date of three leading dealers
of commercial paper in The City of New York (which may include
the Agents or their affiliates) selected by the Calculation Agent
for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement placed for an industrial issuer
whose bond rating is "Aa", or the equivalent, from a nationally
recognized statistical rating organization; provided, however,
that if the dealers so selected by the Calculation Agent are not
quoting rates as mentioned in this sentence, the Commercial Paper
Rate determined as of such Commercial Paper Rate Interest
Determination Date will be the Commercial Paper Rate in effect on
such Commercial Paper Rate Interest Determination Date, or if no
such Commercial Paper Rate is then in effect, the interest rate
on the applicable Note will be the Initial Interest Rate.
"Money Market Yield" means a yield (expressed as a
percentage) calculated in accordance with the following formula:
D x 360
Money Market Yield = X 100
----------------------
360 - (D x M)
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<PAGE>
where "D" refers to the applicable per annum rate for commercial
paper quoted on a bank discount basis and expressed as a decimal,
and "M" refers to the actual number of days in the applicable
Interest Reset Period.
FEDERAL FUNDS RATE. Unless otherwise specified in the
applicable Pricing Supplement, "Federal Funds Rate" means, with
respect to any Interest Determination Date relating to a Floating
Rate Note for which the interest rate is determined with
reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for United
States dollar federal funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not published by 3:00
P.M., New York City time, on the related Calculation Date, the
rate on such Federal Funds Rate Interest Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City
time, on the related Calculation Date, then the Federal Funds
Rate on such Federal Funds Rate Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic
mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of
federal funds transactions in The City of New York (which may
include the Agents or their affiliates) selected by the
Calculation Agent prior to 9:00 A.M., New York City time, on such
Federal Funds Rate Interest Determination Date; provided,
however, that if the brokers so selected by the Calculation Agent
are not quoting rates as mentioned in this sentence, the Federal
Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on
such Federal Funds Rate Interest Determination Date, or if no
such Federal Funds Rate is then in effect, the interest rate on
the applicable Note will be the Initial Interest Rate.
LIBOR. Unless otherwise specified in the applicable Pricing
Supplement, "LIBOR" means the rate determined in accordance with
the following provisions:
(i) With respect to any Interest Determination Date
relating to a Floating Rate Note for which the interest rate
is determined with reference to LIBOR (a "LIBOR Interest
Determination Date"), LIBOR will be either: (a) if "LIBOR
Reuters" is specified in the applicable Pricing Supplement,
the arithmetic mean of the offered rates (unless the
Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used)
for deposits in United States dollars having the Index
Maturity specified in such Pricing Supplement, commencing on
the applicable Interest Reset Date, that appear (or, if only
a single rate is required as aforesaid, appears) on the
Designated LIBOR Page as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date, or (b) if "LIBOR
Telerate" is specified in the applicable Pricing Supplement
or if neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable Pricing Supplement as the method
for calculating LIBOR, the rate for deposits in United
States dollars having the Index Maturity specified in such
Pricing Supplement, commencing on such Interest Reset Date,
that appears on the Designated LIBOR Page as of 11:00 A.M.,
London time, on such LIBOR Interest Determination Date. If
fewer than two such offered rates so appear, or if no such
rate so appears, as applicable, LIBOR on such LIBOR Interest
Determination Date will be determined in accordance with the
provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination
Date on which fewer than two offered rates appear, or no
rate appears, as the case may be, on the Designated LIBOR
Page as specified in clause (i) above, the Calculation Agent
will request the principal London offices of each of four
major reference banks (which may include affiliates of the
Agents) in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in United States dollars for
the period of the Index Maturity specified in the applicable
Pricing Supplement, commencing on the applicable Interest
Reset Date, to prime banks in the London interbank market at
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<PAGE>
approximately 11:00 A.M., London time, on such LIBOR
Interest Determination Date and in a principal amount that
is representative for a single transaction in United States
dollars in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR
Interest Determination Date will be the arithmetic mean of
such quotations. If fewer than two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination
Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such LIBOR
Interest Determination Date by three major banks (which may
include affiliates of the Agents) in The City of New York
selected by the Calculation Agent for loans in United States
dollars to leading European banks, for the period of the
Index Maturity specified in the applicable Pricing
Supplement and in a principal amount that is representative
for a single transaction in United States dollars in such
market at such time; provided, however, that if the banks so
selected by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR determined as of such
LIBOR Interest Determination Date will be LIBOR in effect on
such LIBOR Interest Determination Date, or if no such LIBOR
rate is then in effect, the interest rate on the applicable
Note will be the Initial Interest Rate.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is
specified in the applicable Pricing Supplement, the display on
the Reuter Monitor Money Rates Service (or any successor service)
on the page specified in such Pricing Supplement (or any other
page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for United
States dollars or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified in the applicable Pricing
Supplement as the method for calculating LIBOR, the display on
the Dow Jones Telerate Service (or any successor service) on the
page specified in such Pricing Supplement (or any other page as
may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for United
States dollars.
PRIME RATE. Unless otherwise specified in the applicable
Pricing Supplement, "Prime Rate" means, with respect to any
Interest Determination Date relating to a Floating Rate Note for
which the interest rate is determined with reference to the
Prime Rate (a "Prime Rate Interest Determination Date"), the rate
on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan." If such rate is not published prior to
3:00 P.M., New York City time, on the related Calculation Date,
then the Prime Rate shall be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the
Reuters Screen USPRIME1 Page (as hereinafter defined) as such
bank's prime rate or base lending rate as in effect for such
Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen USPRIME1 Page for such Prime
Rate Interest Determination Date, then the Prime Rate shall be
the arithmetic mean of the prime rates or base lending rates
quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date by four major money center
banks (which may include affiliates of the Agents) in The City of
New York selected by the Calculation Agent. If fewer than four
such quotations are so provided, then the Prime Rate shall be the
arithmetic mean of four prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of
the close of business on such Prime Rate Interest Determination
Date as furnished in The City of New York by the major money
center banks, if any, that have provided such quotations and by a
reasonable number of substitute banks or trust companies (which
may include affiliates of the Agents) to obtain four such prime
rate quotations, provided such substitute banks or trust
companies are organized and doing business under the laws of the
United States, or any State thereof, each having total equity
capital of at least $500 million and being subject to supervision
or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence,
the Prime Rate determined as of such Prime Rate Interest
S-13
<PAGE>
Determination Date will be the Prime Rate in effect on such Prime
Rate Interest Determination Date, or, if no such Prime Rate is
then in effect, the interest rate on the applicable Note will be
the Initial Interest Rate.
"Reuters Screen USPRIME1 Page" means the display on the
Reuter Monitor Money Rates Service (or any successor service) on
the "USPRIME1" page (or such other page as may replace the
USPRIME1 page on such service) for the purpose of displaying
prime rates or base lending rates of major United States banks.
TREASURY RATE. Unless otherwise specified in the applicable
Pricing Supplement, "Treasury Rate" means, with respect to any
Interest Determination Date relating to a Floating Rate Note for
which the interest rate is determined by reference to the
Treasury Rate (a "Treasury Rate Interest Determination Date"),
the rate from the auction held on such Treasury Rate Interest
Determination Date (the "Auction") of direct obligations of the
United States ("Treasury Bills") having the Index Maturity
specified in the applicable Pricing Supplement, as such rate is
published in H.15(519) under the heading "Treasury Bills-auction
average (investment)" or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the auction average
rate of such Treasury Bills (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United
States Department of the Treasury. In the event that the results
of the Auction of Treasury Bills having the Index Maturity
specified in the applicable Pricing Supplement are not reported
as provided by 3:00 P.M., New York City time, on the related
Calculation Date, or if no such Auction is held, then the
Treasury Rate will be calculated by the Calculation Agent and
will be a yield to maturity (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three
leading primary United States government securities dealers
(which may include the Agents or their affiliates) selected by
the Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified in the
applicable Pricing Supplement; provided however, that if the
dealers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate determined as of
such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest
Determination Date, or if no such Treasury Rate is then in
effect, the interest rate on the applicable Note will be the
Initial Interest Rate.
REDEMPTION AT THE OPTION OF THE COMPANY
The Notes will be redeemable at the option of the Company
prior to the Stated Maturity Date only if an Initial Redemption
Date is specified in the applicable Pricing Supplement. If so
specified, the Notes will be subject to redemption at the option
of the Company on any date on and after the applicable Initial
Redemption Date in whole or from time to time in part in
increments of $1,000, at the applicable Redemption Price
(calculated as described below), together with accrued interest
to the date of redemption, on notice given to the Holders thereof
not more than 60 nor less than 30 days prior to the date of
redemption and in accordance with the provisions of the
Indenture. The Redemption Price, if applicable, shall initially
be a percentage of the principal amount of such Note to be
redeemed equal to the "Initial Redemption Price" specified in
such Pricing Supplement for the twelve-month period commencing on
the Initial Redemption Date and shall decline for the twelve-
month period commencing on each anniversary of the Initial
Redemption Date by a percentage of principal amount to be
redeemed equal to the "Annual Redemption Percentage Reduction"
specified in such Pricing Supplement until the redemption price
is 100% of such principal amount.
Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund or
other mandatory redemption provisions.
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<PAGE>
Additional information concerning redemption is contained
under "Description of the Debt Securities--Redemption" in the
accompanying Prospectus.
In addition to the foregoing, the Company may at any time
purchase Notes at any price or prices in the open market or
otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held, resold or surrendered to the
Trustee for cancellation.
REPAYMENT AT THE OPTION OF THE HOLDER
The Notes will be repayable by the Company at the option
of the Holders thereof prior to the Stated Maturity Date only if
one or more Option Repayment Dates are specified in the
applicable Pricing Supplement. If so specified, the Notes will
be subject to repayment at the option of the Holders thereof on
any Option Repayment Date in whole or from time to time in part
in increments of $1,000, at a repayment price equal to 100% of
the unpaid principal amount to be repaid, together with accrued
interest to the date of repayment. For any Note to be repaid,
such Note must be received, together with the form thereon
entitled "Option to Elect Repayment" duly completed, by the
Trustee at its office maintained for such purpose in The City of
New York, currently the Corporate Trust Office of the Trustee
located at 450 West 33rd Street, New York, New York 10001, not
more than 60 nor less than 30 days prior to the date of
repayment. Exercise of such repayment option by the Holder will
be irrevocable.
Only the Depository may exercise the repayment option in
respect of Global Securities representing Book-Entry Notes.
Accordingly, Beneficial Owners (as hereinafter defined) of Global
Securities that desire to have all or any portion of the
Book-Entry Notes represented by such Global Securities repaid
must instruct the Participant (as hereinafter defined) through
which they own their interest to direct the Depository to
exercise the repayment option on their behalf by delivering the
related Global Security and duly completed election form to the
Trustee as aforesaid. In order to ensure that such Global
Security and election form are received by the Trustee on a
particular day, the applicable Beneficial Owner must so instruct
the Participant through which it owns its interest before such
Participant's deadline for accepting instructions for that day.
Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, Beneficial
Owners should consult the Participants through which they own
their interest for the respective deadlines for such
Participants. All instructions given to Participants from
Beneficial Owners of Global Securities relating to the option to
elect repayment will be irrevocable. In addition, at the time
such instructions are given, each such Beneficial Owner shall
cause the Participant through which it owns its interest to
transfer such Beneficial Owner's interest in the Global Security
or Securities representing the related Book-Entry Notes, on the
Depository's records, to the Trustee. See "--Book-Entry Notes"
below.
If applicable, the Company will comply with the requirements
of Section 14(e) of the Exchange Act and the rules promulgated
thereunder, and any other securities laws or regulations in
connection with any such repayment.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
Any provisions with respect to the Notes, including the
specification and determination of one or more Interest Rate
Bases, the calculation of the interest rate applicable to a
Floating Rate Note, the Interest Payment Dates, the Stated
Maturity Date, any redemption or repayment provisions or any
other term relating thereto, may be modified and/or supplemented
as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on
the face thereof and described in the applicable Pricing
Supplement.
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<PAGE>
BOOK-ENTRY NOTES
The Company has established a depositary arrangement with
The Depository Trust Company ("DTC"), pursuant to which DTC will
act as securities depository for the Book-Entry Notes. The
Book-Entry Notes will be issued as fully registered securities
registered in the name of Cede & Co. (the Depository's
partnership nominee). DTC and any other depository which may
replace DTC as depository for the Book-Entry Notes are sometimes
referred to herein as the "Depository."
Upon issuance, all Book-Entry Notes having the same issue
date, interest rate provisions, redemption provisions, provisions
for repurchase at the option of the Holder, stated maturity and
other provisions will be represented by one or more Global
Securities. Each Global Security representing Book-Entry Notes
will be deposited with, or on behalf of, the Depository and will
be registered in the name of the Depository or a nominee of the
Depository. Except under the limited circumstances described
below, Book-Entry Notes represented by Global Securities will not
be exchangeable for Certificated Notes.
So long as the Depository or its nominee is the registered
owner of a Global Security, the Depository or its nominee, as the
case may be, will be considered the sole Holder of the Book-Entry
Notes represented thereby for all purposes under the Indenture.
Payments of principal of and premium, if any, and any interest on
individual Book-Entry Notes represented by a Global Security will
be made to the Depository or its nominee, as the case may be, as
the registered holder of such Global Security. Except as set
forth below, owners of beneficial interests in a Global Security
will not be entitled to have any of the individual Book-Entry
Notes represented by such Global Security registered in their
names, will not receive or be entitled to receive physical
delivery of any such Book-Entry Note and will not be considered
the registered holder thereof under the Indenture, including,
without limitation, for purposes of consenting to any amendment
thereof or supplement thereto as described in this Prospectus.
Accordingly, each Beneficial Owner must rely on the procedures of
the Depository and, if such Beneficial Owner is not a
Participant, on the procedures of the Participant through which
such Beneficial Owner owns its interest in order to exercise any
rights of a Holder under such Global Security or the Indenture.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in
certificated form. Such limits and laws may impair the ability
to transfer beneficial interests in a Global Security
representing Book-Entry Notes.
The following is based on information furnished by DTC:
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 Exchange Act. 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 of DTC ("Direct
Participants") include securities brokers and dealers
(including the Agents), 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 DTC's 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 Commission.
S-16
<PAGE>
Purchases of Book-Entry Notes under DTC's system must
be made by or through Direct Participants, which will
receive a credit for such Book-Entry Notes on DTC's records.
The ownership interest of each actual purchaser of each
Book-Entry Note represented by a Global Security
("Beneficial Owner") is in turn to be recorded on the
records of Direct Participants and Indirect Participants.
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 Participants or Indirect
Participants through which such Beneficial Owner entered
into the transaction. Transfers of ownership interests in a
Global Security representing Book-Entry Notes are to be
accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners of
a Global Security representing Book-Entry Notes will not
receive Certificated Notes representing their ownership
interests therein, except in the event that use of the
book-entry system for such Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global
Securities representing Book-Entry Notes which are deposited
with, or on behalf of, DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Global
Securities with, or on behalf of, 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 Global Securities representing the Book-Entry
Notes; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Book-Entry Notes 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.
Redemption notices shall be sent to Cede & Co. If less
than all of the Book-Entry Notes of like tenor and terms 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 Global Securities representing the Book-Entry
Notes. Under its usual procedures, DTC mails an Omnibus
Proxy to the Company as soon as possible after the
applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Book-Entry Notes are
credited on the applicable record date (identified in a
listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on
the Global Securities representing the Book-Entry Notes will
be made to DTC. DTC's practice is to credit Direct
Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not
receive payment on such date. 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 the Company,
subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal,
premium, if any, and interest to DTC is the responsibility
of the Company and the Trustee, disbursement of such
payments to Direct Participants shall be the responsibility
of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct Participants
and Indirect Participants.
S-17
<PAGE>
A Beneficial Owner shall give notice of any option to
elect to have its Book-Entry Notes repaid by the Company,
through its Participant, to the Trustee and to the Company,
and shall effect delivery of such Book-Entry Notes by
causing the Direct Participant to transfer the Participant's
interest in the Global Security or Securities representing
such Book-Entry Notes, on DTC's records, to the Trustee.
The requirement for physical delivery of Book-Entry Notes in
connection with a demand for repayment will be deemed
satisfied when the ownership rights in the Global Security
or Securities representing such Book-Entry Notes are
transferred by Direct Participants on DTC's records.
DTC may discontinue providing its services as
securities depository with respect to the Book-Entry Notes
at any time by giving reasonable notice to the Company or
the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained,
Certificated Notes are required to be printed and delivered
in exchange for Book-Entry Notes represented by the Global
Securities held by DTC.
The Company may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor
securities depository). In that event, Certificated Notes
will be printed and delivered.
The information in this section concerning DTC and DTC's
system has been obtained from DTC. The Company believes such
information to be reliable, but the Company takes no
responsibility for the accuracy thereof.
None of the Company, PP&L Resources, any Agents, the
Trustee, any Paying Agent or any Security Registrar for the Notes
will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
ownership interests in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
If the Depository is at any time unwilling or unable to
continue as depository or ceases to be a clearing agency
registered under the Exchange Act and a successor depository is
not appointed by the Company, the Company will issue Certificated
Notes in exchange for the Notes represented by the Global
Securities held by the Depository. In addition, the Company may
at any time and in its sole discretion determine not to have
Notes represented by a Global Security and, in such event, will
issue individual Certificated Notes in fully registered form,
without coupons, in exchange for the Book-Entry Notes represented
by the Global Security.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States
federal income tax consequences of the purchase, ownership and
disposition of the Notes as of the date hereof and represents the
opinion of Reid & Priest LLP, counsel to the Company, insofar as
it relates to matters of law or legal conclusions. The following
summary is based upon laws, regulations, rulings and decisions
now in effect, all of which are subject to change (including
changes in effective dates) or possible differing
interpretations. It deals only with Notes held as capital assets
and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies,
regulated investment companies, dealers in securities or
currencies, persons holding Notes as a hedge, conversion
transaction or as a position in a "straddle" for tax purposes, or
persons whose functional currency is not the United States
dollar. It also does not deal with holders other than original
purchasers who purchased Notes at the original offering price
(except where otherwise specifically noted).
S-18
<PAGE>
PROSPECTIVE PURCHASERS OF NOTES, INCLUDING PERSONS WHO ARE
NOT UNITED STATES HOLDERS AND PERSONS WHO PURCHASE NOTES IN THE
SECONDARY MARKET, ARE ADVISED TO CONSULT WITH THEIR TAX ADVISORS
AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES IN LIGHT OF THEIR
PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE,
LOCAL OR OTHER TAX LAWS.
As used herein, the term "U.S. Holder" means a beneficial
owner of a Note that is for United States Federal income tax
purposes (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political
subdivision thereof, (iii) an estate the income of which is
subject to United States Federal income taxation regardless of
its source, (iv) any trust if a court within the United States is
able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust, or
(v) any other person whose income or gain in respect of a Note is
effectively connected with the conduct of a United States trade
or business. As used herein, the term "non-U.S. Holder" means a
beneficial owner of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note generally will be taxable to
a U.S. Holder as ordinary interest income at the time such
payments are accrued or are received (in accordance with the U.S.
Holder's regular method of tax accounting).
Premium
If a U.S. Holder purchases a Note for an amount that is
greater than its principal amount, such U.S. Holder will be
considered to have purchased the Note with "amortizable bond
premium" equal in amount to such excess. A U.S. Holder may elect
to amortize such premium using a constant yield method over the
remaining term of the Note and may offset interest otherwise
required to be included in respect of the Note during any taxable
year by the amortized amount of such excess for the taxable year.
However, if the Note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its principal amount,
special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the
Note. Any election to amortize bond premium applies to all
taxable debt instruments then owned and thereafter acquired by
the U.S. Holder on or after the first day of the first taxable
year to which such election applies and may be revoked only with
the consent of the Internal Revenue Service (the "IRS").
Disposition of a Note
Except as discussed above, upon the sale, exchange or
retirement of a Note, a U.S. Holder generally will recognize
taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (other than amounts
representing accrued and unpaid interest) and such U.S. Holder's
adjusted tax basis in the Note. A U.S. Holder's adjusted tax
basis in a Note generally will equal such U.S. Holder's initial
investment in the Note increased by any original issue discount
included in income (and accrued market discount, if any, if the
U.S. Holder has included such market discount in income) and
decreased by the amount of any payments, other than qualified
stated interest payments, received and amortizable bond premium
taken with respect to such Note. Such gain or loss generally
will be long-term capital gain or loss if the Note were held for
more than the applicable holding period.
S-19
<PAGE>
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States
Federal income taxes on payments of principal, premium (if any)
or interest (including original issue discount, if any) on a
Note, unless such non-U.S. Holder is a direct or indirect 10% or
greater shareholder of the Company, a controlled foreign
corporation related to the Company or a bank receiving interest
described in section 881(c)(3)(A) of the Code. To qualify for
the exemption from taxation, the last United States payor in the
chain of payment prior to payment to a non-U.S. Holder (the
"Withholding Agent") must have received in the year in which a
payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the
beneficial owner of the Note under penalties of perjury, (ii)
certifies that such owner is not a U.S. Holder and (iii) provides
the name and address of the beneficial owner. The statement may
be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any
change in the information on the statement within 30 days of such
change. If a Note is held through a securities clearing
organization or certain other financial institutions, the
organization or institution may provide a signed statement to the
Withholding Agent. However, in such case, the signed statement
must be accompanied by a copy of the IRS Form W-8 or the
substitute form provided by the beneficial owner to the
organization or institution. The Treasury Department is
considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is
related to holders thereof.
Generally, a non-U.S. Holder will not be subject to Federal
income taxes on any amount which constitutes capital gain upon
retirement or disposition of a Note, provided the gain is not
effectively connected with the conduct of a trade or business in
the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should
consult its tax advisor in this regard.
The Notes will not be includible in the estate of a non-U.S.
Holder unless the individual is a direct or indirect 10% or
greater shareholder of the Company or, at the time of such
individual's death, payments in respect of the Notes would have
been effectively connected with the conduct by such individual of
a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a
rate of 31% may apply to payments made in respect of the Notes to
registered owners who are not "exempt recipients" and who fail to
provide certain identifying information (such as the registered
owner's taxpayer identification number) in the required manner.
Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt
recipients. Payments made in respect of the Notes to a U.S.
Holder must be reported to the IRS, unless the U.S. Holder is an
exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section
would establish an exemption from backup withholding for those
non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a Note to (or through) a
broker, the broker must withhold 31% of the entire purchase
price, unless either (i) the broker determines that the seller is
a corporation or other exempt recipient or (ii) the seller
provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller
is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS,
unless either (i) the broker determines that the seller is an
exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the
registered owner's non-U.S. status would be made normally on an
IRS Form W-8 under penalties of perjury, although in certain
cases it may be possible to submit other documentary evidence.
S-20
<PAGE>
Any amounts withheld under the backup withholding rules from
a payment to a beneficial owner would be allowed as a refund or a
credit against such beneficial owner's United States Federal
income tax provided the required information is furnished to the
IRS.
VALIDITY OF THE NOTES AND THE GUARANTEES
The validity of the Guarantees will be passed upon for
PP&L Resources by Michael A. McGrail, Esq., Senior Counsel of
PP&L, and Reid & Priest LLP, New York, New York, counsel to PP&L
Resources. The validity of the Notes will be passed upon for the
Company by Reid & Priest LLP, as counsel to the Company. The
validity of the Notes and the Guarantees will be passed upon for
the Agents by Sullivan & Cromwell, New York, New York. As to
matters involving the law of the Commonwealth of Pennsylvania,
Reid & Priest LLP and Sullivan & Cromwell will rely on the
opinion of Mr. McGrail. The opinions of Mr. McGrail, Reid &
Priest LLP and Sullivan & Cromwell will be conditioned upon, and
subject to certain assumptions regarding, future action required
to be taken by the Company and the Trustee in connection with the
issuance and sale of any particular Note, the specific terms of
Notes and other matters which may affect the validity of the
Notes and the Guarantees but which cannot be ascertained on the
date of such opinions.
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis for sale
by the Company to or through Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, First Chicago Capital
Markets, Inc., Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated and any additional agents appointed by the Company
from time to time and named in the applicable Pricing Supplements
(the "Agents"). The Agents, individually or in a syndicate, may
purchase Notes, as principal, from the Company from time to time
for resale to investors and other purchasers at varying prices
relating to prevailing market prices at the time of resale as
determined by the applicable Agent or, if so specified in the
applicable Pricing Supplement, for resale at a fixed offering
price. If agreed to by the Company and an Agent, such Agent may
also utilize its reasonable efforts on an agency basis to solicit
offers to purchase the Notes at 100% of the principal amount
thereof, unless otherwise specified in the applicable Pricing
Supplement. The Company will pay a commission to an Agent,
ranging from .125% to .750% of the principal amount of each Note,
depending upon its stated maturity, sold through such Agent as an
agent of the Company. Commissions with respect to Notes with
stated maturities in excess of 30 years that are sold through an
Agent as an agent of the Company will be negotiated between the
Company and such Agent at the time of such sale.
Unless otherwise specified in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage of the principal amount equal to
the commission applicable to an agency sale of a Note of
identical maturity. An Agent may sell Notes it has purchased
from the Company as principal to certain dealers less a
concession equal to all or any portion of the discount received
in connection with such purchase. Such Agent may allow, and such
dealers may reallow, a discount to certain other dealers. After
the initial offering of Notes, the offering price (in the case of
Notes to be resold on a fixed offering price basis), the
concession and the reallowance may be changed.
The Company has reserved the right to appoint additional
agents to solicit offers to purchase the Offered Notes on
substantially the same terms and conditions as the Agents. The
Company may also sell the Offered Notes directly to investors on
its own behalf. In the case of sales made directly by the
Company no commission will be payable.
S-21
<PAGE>
The Company reserves the right to withdraw, cancel or modify
the offer made hereby without notice and may reject offers in
whole or in part (whether placed directly with the Company or
through an Agent). Each Agent will have the right, in its
discretion reasonably exercised, to reject in whole or in part
any offer to purchase Notes received by it on an agency basis.
Upon issuance, the Notes will not have an established
trading market. The Notes will not be listed on any securities
exchange. The Agents may from time to time purchase and sell
Notes in the secondary market, but the Agents are not obligated
to do so, and there can be no assurance that there will be a
secondary market for the Notes or that there will be liquidity in
the secondary market if one develops. From time to time, the
Agents may make a market in the Notes, but the Agents are not
obligated to do so and may discontinue any market-making activity
at any time.
In connection with an offering of Notes purchased by one or
more Agents as principal on a fixed price basis, such Agent or
Agents will be permitted to engage in certain transactions that
stabilize the price of such Notes. Such transactions may consist
of bids or purchases for the purpose of pegging, fixing or
maintaining the price of such Notes. If an Agent creates a short
position in such Notes, i.e., if it sells Notes in an aggregate
principal amount exceeding that set forth in the applicable
Pricing Supplement, such Agent may reduce that short position by
purchasing Notes in the open market. In general, purchases of
Notes for the purpose of stabilization or to reduce a short
position could cause the price of Notes to be higher than it
might be in the absence of such purchases. These transactions,
if commenced, may be discontinued at any time.
Neither the Company nor any of the Agents makes any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the Notes. In addition, neither the Company nor any of
the Agents makes any representation that the Agents will engage
in such transactions or that such transactions, once commenced,
will not be discontinued without notice.
The Agents may be deemed to be "underwriters" within the
meaning of the Securities Act. The Company and PP&L Resources
have agreed to indemnify the Agents against, and to provide
contribution with respect to, certain liabilities (including
liabilities under the Securities Act). The Company and PP&L
Resources have also agreed to reimburse the Agents for certain
other expenses.
In the ordinary course of its business, the Agents and their
affiliates have engaged and may in the future engage in
investment and commercial banking transactions with the Company,
PP&L Resources and certain of their affiliates.
S-22
<PAGE>
PROSPECTUS
----------
$400,000,000
PP&L CAPITAL FUNDING, INC.
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED
AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
PP&L RESOURCES, INC.
PP&L Capital Funding, Inc., a Delaware Corporation (the
"Company"), may offer, from time to time, its unsecured debt
securities consisting of notes, debentures, or other unsecured
evidences of indebtedness, in one or more series, in an aggregate
principal amount of up to $400,000,000 (the "Debt Securities"),
on terms to be determined at the time or times of sale. The Debt
Securities will be unconditionally guaranteed by PP&L Resources,
Inc., a Pennsylvania corporation ("PP&L Resources"), as to
payment of principal, premium, if any, and interest. See
"Description of the Debt Securities - Guarantee of PP&L
Resources; Holding Company Structure." The terms of each series
of Debt Securities in respect of which this Prospectus is being
delivered, including, where applicable, the series designation,
the aggregate principal amount of the series, the maturity or
maturities, the rate or rates (which may be fixed or variable)
and time or times of payment of interest, the initial public
offering prices, the provisions for redemption, provisions for
repayment at the option of the holder and other provisions, are
set forth in one or more Prospectus Supplements (each a
"Prospectus Supplement"), together with the terms of offering of
the Debt Securities.
The Debt Securities may be sold by the Company to or through
underwriters or dealers, directly to other purchasers or through
agents for offering pursuant to terms fixed at the time of sale.
See "Plan of Distribution." The applicable Prospectus Supplement
sets forth the names of any such underwriters or agents and any
applicable commission or discount arrangements with them.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of
Debt Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is November 12, 1997.
<PAGE>
AVAILABLE INFORMATION
PP&L Resources is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information filed by PP&L Resources can be inspected and copied
at the public reference facilities maintained by the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following Regional Offices of the Commission: Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Commission also maintains a
World Wide Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information filed by
PP&L Resources. The outstanding shares of PP&L Resources Common
Stock are listed on the New York Stock Exchange, and reports,
proxy statements and other information concerning PP&L Resources
may also be inspected at the offices of such exchange at 20 Broad
Street, New York, New York 10005. In addition, reports, proxy
statements and other information concerning PP&L Resources can be
inspected at its offices at Two North Ninth Street, Allentown,
Pennsylvania 18101.
The Company and PP&L Resources have filed with the
Commission a combined registration statement on Form S-3 (herein,
together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Debt
Securities offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules
and regulations of the Commission. Reference is made to such
Registration Statement and to the exhibits relating thereto for
further information with respect to the Company, PP&L Resources
and the Debt Securities. Any statements contained herein
concerning the provisions of any document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete,
and in each instance reference is made to the copy of such
document so filed for a more complete description of the matter
involved. Each such statement is qualified in its entirety by
such reference.
No separate financial statements of the Company are included
or incorporated by reference herein. PP&L Resources and the
Company do not consider that such financial statements would be
material to holders of the Debt Securities because (i) the
Company is a newly organized corporation that has no operating
history and no independent operations, and (ii) the Company was
formed for the purpose of providing financing for PP&L Resources
and its subsidiaries, and does not currently propose to engage in
more than minimal independent operations. See "The Company."
The Company intends to ask the Staff of the Commission for a "no-
action" letter to the effect that the Staff would not raise any
objection if the Company does not file periodic reports under
Sections 13 and 15(d) of the Exchange Act. Accordingly, the
Company is not expected to file such reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PP&L Resources with the
Commission pursuant to the Exchange Act (File No. 1-11459) are
incorporated herein by reference and made a part hereof:
(1) Annual Report on Form 10-K for the year ended December
31, 1996;
(2) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and
2
<PAGE>
(3) Current Reports on Form 8-K, dated March 3, 1997, April
2, 1997, May 2, 1997, June 30, 1997, July 14, 1997, September 12,
1997 and October 24, 1997.
All documents subsequently filed by PP&L Resources pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of
such documents. The documents which are incorporated by reference
in this Prospectus are sometimes hereinafter referred to as the
"Incorporated Documents." Any statement contained in an
Incorporated Document shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document which is deemed to be incorporated by reference herein
or in a Prospectus Supplement modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
PP&L Resources hereby undertakes to provide without charge
to each person, including any beneficial owner, to whom a copy of
this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any and all of the
Incorporated Documents, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be
directed to: PP&L Resources, Inc., Two North Ninth Street,
Allentown, Pennsylvania 18101, Attention: Investor Services
Department (800) 345-3085.
PP&L RESOURCES
PP&L Resources was incorporated in 1995 under the laws of
the Commonwealth of Pennsylvania and is the parent holding
company of the Company, PP&L, Inc. (formerly Pennsylvania Power &
Light Company, "PP&L"), PP&L Global, Inc. (formerly Power Markets
Development Company, "PP&L Global"), and PP&L Spectrum, Inc.
(formerly Spectrum Energy Services Corporation, "PP&L Spectrum").
PP&L Resources' principal subsidiary, PP&L, was incorporated
under the laws of the Commonwealth of Pennsylvania in 1920 and is
an operating public utility providing electric service in central
eastern Pennsylvania. PP&L serves approximately 1.2 million
customers in a 10,000 square mile territory in 29 counties of
central eastern Pennsylvania with a population of approximately
2.6 million persons. This service area has 129 communities with
populations over 5,000, the largest cities of which are
Allentown, Bethlehem, Harrisburg, Hazleton, Lancaster, Scranton,
Wilkes-Barre and Williamsport. PP&L also offers electricity and
other services to retail and wholesale customers throughout
Pennsylvania and neighboring states. PP&L Global engages in
unregulated business activities through worldwide investments in
energy-related projects. PP&L Spectrum, another unregulated
subsidiary, was formed to pursue opportunities to offer energy-
related products and services to PP&L's existing customers and to
others beyond PP&L's service territory. PP&L Resources' offices
are located at Two North Ninth Street, Allentown, Pennsylvania
18101, and its telephone number is (610) 774-5151.
THE COMPANY
The Company is a newly formed Delaware corporation and a
wholly-owned subsidiary of PP&L Resources. The primary business
of the Company is to provide financing for the operations of PP&L
Resources and its subsidiaries. The Company's offices are
located at Two North Ninth Street, Allentown, Pennsylvania 18101,
and its telephone number is (610) 774-5151.
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USE OF PROCEEDS
Except as may otherwise be set forth in the applicable
Prospectus Supplement, the net proceeds to be received by the
Company from the sale of the Debt Securities will be loaned to
PP&L Resources and/or its subsidiaries. PP&L Resources and/or
its subsidiaries are expected to use such proceeds for general
corporate purposes, including investing in unregulated business
activities and to reduce short-term debt incurred to provide
interim financing for such purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to
fixed charges for PP&L Resources for the periods indicated:
Twelve Months
Ended Year Ended December 31,
------------------ ----------------------------
September 30, 1997 1996 1995 1994 1993 1992
------------------ ---- ---- ---- ---- ----
Ratio of
earnings to
fixed charges 3.21 3.45 3.47 2.70 3.31 3.15
DESCRIPTION OF THE DEBT SECURITIES
The following description sets forth certain general terms
and provisions of the Debt Securities to which any Prospectus
Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement, and provisions
of such Debt Securities that vary from the general provisions
described below, will be described in such Prospectus Supplement.
The Debt Securities may be issued, from time to time, in one
or more series. Debt Securities, and the guarantee or guarantees
of PP&L Resources relating thereto (the "Guarantee" or
"Guarantees"), will be issued under an Indenture, dated as of
November 1, 1997 (as such indenture may be supplemented or
amended from time to time by various supplemental indentures,
including one or more supplemental indentures relating to the
Debt Securities, the "Indenture"), among the Company, PP&L
Resources and The Chase Manhattan Bank, as trustee (the
"Trustee"). A copy of a form of the Indenture is filed as an
exhibit to the Registration Statement.
The following summaries of certain provisions of the Debt
Securities and the Indenture do not purport to be complete and
are subject to, and are qualified in their entirety by express
reference to, all the provisions of the Indenture, including the
definitions therein of certain terms, and, with respect to any
particular Debt Securities, to the description of the terms
thereof included in any Prospectus Supplement or Pricing
Supplement relating thereto. Wherever particular provisions or
defined terms of the Indenture are referred to herein or in a
Prospectus Supplement, such provisions or defined terms are
incorporated by reference herein or therein, as the case may be.
References to article and section numbers used herein are to
articles and sections in the Indenture. Certain capitalized
terms used herein are defined in the Indenture.
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GENERAL
The Indenture does not limit the aggregate principal amount
of Debt Securities or other debt, which may be issued thereunder
and provides that Debt Securities may be issued thereunder, from
time to time, in one or more series. The Debt Securities and all
other debt securities hereafter issued under the Indenture are
collectively referred to herein as the "Indenture Securities."
The Debt Securities will be unsecured obligations of the
Company, and pursuant to the Guarantees will be unconditionally
guaranteed by PP&L Resources as to payment of principal, premium,
if any, and interest. See "--Guarantee of PP&L Resources;
Holding Company Structure."
Reference is made to the applicable Prospectus Supplement
for a description of the following terms of the series of Debt
Securities in respect of which this Prospectus is being
delivered: (i) the title of such Debt Securities; (ii) the limit,
if any, upon the aggregate principal amount of such Debt
Securities; (iii) the date or dates on which the principal of
such Debt Securities will be payable, or the method of
determination thereof; (iv) the rate or rates, or the method of
determination thereof, at which such Debt Securities will bear
interest, if any; the date or dates from which such interest will
accrue; the dates on which such interest will be payable
("Interest Payment Dates"); and the Regular Record Dates, if any,
for the interest payable on such Interest Payment Dates; (v) the
obligation, if any, of the Company to redeem or purchase or repay
such Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the periods
within which or the dates on which, the prices at which and the
terms and conditions upon which such Debt Securities will be
redeemed or purchased or repaid, as the case may be, in whole or
in part, pursuant to such obligation; (vi) the periods within
which or the dates on which, the prices at which and the terms
and conditions upon which such Debt Securities may be redeemed,
if any, in whole or in part, at the option of the Company; (vii)
if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such Debt Securities will be
issuable; (viii) whether such Debt Securities are to be issued in
whole or in part in the form of one or more global Debt
Securities and, if so, the identity of the depositary for such
global Debt Securities; and (ix) any other terms of such Debt
Securities. (See Section 301.)
GUARANTEE OF PP&L RESOURCES; HOLDING COMPANY STRUCTURE
PP&L Resources will unconditionally guarantee the due and
punctual payment of principal of, premium, if any, and interest
on the Debt Securities, when and as the same become due and
payable, whether at the stated maturity date, by declaration of
acceleration, call for redemption or otherwise, in accordance
with the terms of such Debt Securities and the Indenture. The
Guarantees will remain in effect until the entire principal of,
premium, if any, and interest on the Debt Securities has been
paid in full or otherwise discharged in accordance with the
provisions of the Indenture. (See Article Fourteen.)
PP&L Resources conducts its operations primarily through
PP&L and its other wholly-owned subsidiaries, and substantially
all of PP&L Resources' consolidated assets are held by PP&L and
its other subsidiaries. Accordingly, the cash flow of PP&L
Resources and the consequent ability to service its debt,
including its obligations under the Guarantees, are largely
dependent upon the earnings of PP&L and such other subsidiaries
and the distribution or other payment of such earnings to PP&L
Resources in the form of dividends, loans or advances, and
repayment of loans or advances from PP&L Resources. The
subsidiaries are separate and distinct legal entities and (except
for the Company) have no obligation, contingent or otherwise, to
pay any amounts due pursuant to the Debt Securities or to make
any funds available therefor, whether by dividends, loans or
other payments.
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Because PP&L Resources is a holding company, its obligations
under the Guarantees will be effectively subordinated to all
existing and future indebtedness, trade payables, guarantees and
lease, letter of credit and other obligations of its
subsidiaries. Therefore, PP&L Resources' rights and the rights
of its creditors, including the rights of the holders of the Debt
Securities under the Guarantees, to participate in the assets of
any subsidiary (other than the Company) upon the latter's
liquidation or reorganization will be subject to the prior claims
of such subsidiary's creditors, except to the extent that PP&L
Resources may itself be a creditor with recognized claims against
the subsidiary, in which case the claims of PP&L Resources would
still be effectively subordinate to any security interest in, or
mortgages or other liens on, the assets of such subsidiary and
would be subordinate to any indebtedness of such subsidiary
senior to that held by PP&L Resources. Although certain debt
instruments to which PP&L Resources and its subsidiaries are
parties impose limitations on the incurrence of additional
indebtedness, both PP&L Resources and its subsidiaries retain the
ability to incur substantial additional indebtedness and lease,
letter of credit and other obligations.
PAYMENT OF DEBT SECURITIES; TRANSFERS; EXCHANGES
Except as otherwise provided in the applicable Prospectus
Supplement or a supplement thereto, interest, if any, on each
Debt Security on each Interest Payment Date will be paid by check
mailed to the person in whose name such Debt Security is
registered (the registered holder of any Indenture Security being
herein called a "Holder") as of the close of business on the
regular record date relating to such Interest Payment Date;
provided, however, that interest payable at maturity (whether at
stated maturity, upon redemption or otherwise, hereinafter
"Maturity") will be paid to the person to whom principal is paid.
However, if there has been a default in the payment of interest
on any Debt Security, such defaulted interest will be payable to
the Holder of such Debt Security as of the close of business on a
date selected by the Trustee for the payment of such interest not
more than 15 days and not less than 10 days prior to the date
proposed by the Company or PP&L Resources for payment of such
defaulted interest or in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Debt Securities are listed for trading, if the Trustee deems such
manner of payment practicable. (See Section 307.)
Except as otherwise provided in the applicable Prospectus
Supplement or a supplement thereto, principal of and premium, if
any, and interest, if any, on the Debt Securities at Maturity
will be payable upon presentation of the Debt Securities at the
office of The Chase Manhattan Bank in New York, New York, as
Paying Agent for the Company and PP&L Resources. Any other
Paying Agent initially designated by the Company for the Debt
Securities of a particular series will be named in the applicable
Prospectus Supplement. The Company or PP&L Resources may change
the place of payment on the Debt Securities, and may remove any
Paying Agent and may appoint one or more additional Paying Agents
(including the Company, PP&L Resources or any affiliate of either
of them), all in their discretion. (See Section 602.)
Except as otherwise provided in the applicable Prospectus
Supplement or a supplement thereto, the transfer of Debt
Securities may be registered, and Debt Securities may be
exchanged for other Debt Securities of authorized denominations
and of like tenor and aggregate principal amount and having
Guarantees endorsed thereon, at the office of The Chase Manhattan
Bank, as Security Registrar for the Debt Securities. The Company
may change the place for registration of transfer of the Debt
Securities, and may remove any Security Registrar and appoint one
or more additional Security Registrars (including the Company,
PP&L Resources or any affiliate of either of them), all in its
discretion. (See Sections 305 and 602.) Except as otherwise
provided in the applicable Prospectus Supplement or a supplement
thereto, no service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Company
will not be required to execute or provide for the registration
of transfer of or the exchange of (a) Debt Securities during a
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<PAGE>
period of 15 days prior to giving any notice of redemption or (b)
any Debt Security selected for redemption in whole or in part,
except the unredeemed portion of any Debt Security being redeemed
in part. (See Section 305.)
REDEMPTION
Any terms for the optional or mandatory redemption of Debt
Securities will be set forth in the applicable Prospectus
Supplement or a Pricing Supplement thereto. Except as shall
otherwise be provided in the applicable Prospectus Supplement or
a Pricing Supplement thereto, and except with respect to Debt
Securities redeemable at the option of the Holder, Debt
Securities will be redeemable only upon notice by mail not less
than 30 nor more than 60 days prior to the date fixed for
redemption and, if less than all of the Debt Securities of any
series or any tranche thereof are to be redeemed, the particular
Debt Securities will be selected by the Trustee by such method as
shall be provided for such particular series or tranche, or in
the absence of any such provision, by such method of random
selection as the Trustee deems fair and appropriate. (See
Sections 403 and 404.)
Any notice of redemption at the option of the Company may
state that such redemption shall be conditional upon the receipt
by the Paying Agent, on or prior to the date fixed for such
redemption, of money sufficient to pay the principal of and
premium, if any, and interest on such Debt Securities and that if
such money has not been so received, such notice will be of no
force or effect and the Company will not be required to redeem
such Debt Securities (See Section 404.)
EVENTS OF DEFAULT
Each of the following events constitutes an "Event of
Default" under the Indenture with respect to each series of
Indenture Securities thereunder:
(a) default in the payment of any interest on any Indenture
Security of such series when it becomes due and payable and
continuance of such default for a period of 30 days;
(b) default in the payment of principal or premium, if any,
on any Indenture Security of such series when it becomes due and
payable;
(c) default in the performance of, or breach of, any
covenant or warranty of the Company or PP&L Resources in the
Indenture (other than a covenant or warranty a default in the
performance of which or breach of which is dealt with elsewhere
under this paragraph or which has been expressly included in the
Indenture solely for the benefit of one or more series of
Indenture Securities other than such Indenture Securities), and
the continuance of such default or breach for a period of 90 days
after written notice to the Company and PP&L Resources by the
Trustee, or to the Company, PP&L Resources and the Trustee by the
Holders of at least 25% in principal amount of the Indenture
Securities of such series Outstanding under the Indenture as
provided in the Indenture specifying such default or breach and
requiring it to be remedied, unless the Trustee, or the Trustee
and the Holders of a principal amount of Indenture Securities of
such series not less than the principal amount of Indenture
Securities the Holders of which gave such notice, as the case may
be, agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee
and such Holders, as the case may be, will be deemed to have
agreed to an extension of such period if corrective action is
initiated by the Company or PP&L Resources within such period and
is being diligently pursued;
(d) except as provided by the terms of the Indenture, the
Indenture Securities of such series and the Guarantees on such
Indenture Securities, the cessation of effectiveness of the
Guarantee endorsed on an Indenture Security of such series or the
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<PAGE>
finding by any judicial proceeding that the Guarantee endorsed on
an Indenture Security of such series is unenforceable or invalid
or the denial or disaffirmation by PP&L Resources of its
obligations under the Guarantee endorsed on an Indenture Security
of such series; or
(e) certain events relating to the reorganization,
bankruptcy or insolvency of the Company or PP&L Resources or
appointment of a receiver or trustee for the property of the
Company or PP&L Resources; and
(f) any other Event of Default specified with respect to
Indenture Securities of such series. (See Section 801.)
No Event of Default with respect to the Debt Securities
necessarily constitutes an Event of Default with respect to the
Indenture Securities of any other series issued under the
Indenture.
REMEDIES
If an Event of Default occurs and is continuing with respect
to any series of Indenture Securities, then either the Trustee or
the Holders of not less than 25% in principal amount of the
Outstanding Indenture Securities of such series may declare the
principal amount (or if the Indenture Securities of such series
are discount securities, such portion of the principal amount as
may be specified in the applicable Prospectus Supplement) of all
of the Indenture Securities of such series to be due and payable
immediately; provided, however, that if an Event of Default
occurs and is continuing with respect to more than one series of
Indenture Securities, the Trustee or the Holders of not less than
25% in aggregate principal amount of the Outstanding Indenture
Securities of all such series, considered as one class, may make
such declaration of acceleration, and not the Holders of the
Indenture Securities of any one of such series.
At any time after the declaration of acceleration with
respect to the Indenture Securities of any series has been made
and before a judgment or decree for payment of the money due has
been obtained by the Trustee as provided in the Indenture, such
declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if
(a) the Company or PP&L Resources has paid or deposited
with the Trustee a sum sufficient to pay
(1) all overdue interest on all Indenture Securities
of such series then Outstanding;
(2) the principal of and premium, if any, on any
Indenture Securities of such series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Indenture Securities;
(3) interest upon overdue interest at the rate or
rates prescribed therefor in such Indenture Securities, to the
extent that payment of such interest is lawful; and
(4) all amounts due to the Trustee under the
Indenture;
and
(b) all Events of Default with respect to the Indenture
Securities of such series, other than the nonpayment of the
principal of the Indenture Securities of such series which has
become due solely by such declaration of acceleration, have been
cured or waived as provided in the Indenture. (See Section 802.)
For more information as to waiver of defaults, see "--Waiver."
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If an Event of Default with respect to the Indenture
Securities of any series occurs and is continuing, the Holders of
a majority in principal amount of the Outstanding Indenture
Securities of such series will have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Indenture
Securities of such series; provided, however, that if an Event of
Default occurs and is continuing with respect to more than one
series of Indenture Securities, the Holders of a majority in
aggregate principal amount of the Outstanding Indenture
Securities of all such series, considered as one class, will have
the right to make such direction, and not the Holders of the
Indenture Securities of any one of such series; and provided,
further, that (a) such direction will not be in conflict with any
rule of law or with the Indenture and could not involve the
Trustee in personal liability in circumstances where indemnity
would not, in the Trustee's sole discretion, be adequate and (b)
the Trustee may take any other action it deems proper which is
not inconsistent with such direction. (See Sections 812 and 903.)
The Indenture provides that no Holder of any Indenture Security
will have any right to institute any proceeding, judicial or
otherwise, with respect to the Indenture for the appointment of a
receiver or for any other remedy thereunder unless (a) such
Holder has previously given to the Trustee written notice of a
continuing Event of Default; (b) the Holders of 25% in aggregate
principal amount of the Outstanding Indenture Securities of all
series in respect of which an Event of Default has occurred and
is continuing, considered as one class, have made written request
to the Trustee to institute proceedings in respect of such Event
of Default and have offered the Trustee reasonable indemnity
against costs and liabilities incurred in complying with such
request; and (c) for sixty days after receipt of such notice, the
Trustee has failed to institute any such proceeding and no
direction inconsistent with such request has been given to the
Trustee during such sixty-day period by the Holders of a majority
in aggregate principal amount of Outstanding Indenture Securities
of all series in respect of which an Event of Default has
occurred and is continuing, considered as one class.
Furthermore, no Holder will be entitled to institute any such
action if and to the extent that such action would disturb or
prejudice the rights of other Holders. (See Sections 807 and
903.) Notwithstanding that the right of a Holder to institute a
proceeding with respect to the Indenture is subject to certain
conditions precedent, each Holder has an absolute and
unconditional right to receive payment of principal and premium,
if any, and interest when due and to institute suit for the
enforcement of any such payment and such rights may not be
impaired without the consent of such Holder. (See Sections 807
and 808.) The Indenture provides that the Trustee is required to
give the Holders of the Indenture Securities notice of any
default under the Indenture to the extent required by the Trust
Indenture Act, unless such default has been cured or waived;
except that in the case of an Event of Default of the character
specified above in clause (c) under "Events of Default," no such
notice shall be given to such Holders until at least 75 days
after the occurrence thereof. (See Section 902.) The Trust
Indenture Act currently permits the Trustee to withhold notices
of default (except for certain payment defaults) if the Trustee
in good faith determines the withholding of such notice to be in
the interests of the Holders.
The Company and PP&L Resources will be required to furnish
annually to the Trustee a statement as to the compliance by the
Company with all conditions and covenants under the Indenture.
(See Section 605.)
WAIVER
The Holders of a majority in aggregate principal amount of
the Outstanding Indenture Securities of any series may waive on
behalf of the Holders of all Indenture Securities of such series
any past default under the Indenture, except a default in the
payment of principal, premium, if any, or interest or with
respect to compliance with certain covenants and provisions of
the Indenture which cannot be amended without the consent of the
Holder of each Outstanding Indenture Security of such series
affected. (See Section 813.)
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Compliance with certain covenants in the Indenture or
otherwise provided with respect to Indenture Securities may be
waived by the Holders of a majority in aggregate principal amount
of the Outstanding Indenture Securities affected, considered as
one class. (See Section 606.)
COVENANTS; CONSOLIDATION, MERGER, ETC.
Subject to the provisions described in the next paragraph,
each of the Company and PP&L Resources will do or cause to be
done all things necessary to preserve and keep in full force and
effect its corporate existence. (See Section 604.)
Neither the Company nor PP&L Resources will consolidate with
or merge into any other Person (which term includes, for purposes
of the Indenture, any corporation, partnership, limited liability
company, joint venture, trust or other unincorporated
organization) or convey, transfer or lease its properties and
assets substantially as an entirety to any Person unless (a) the
Person formed by such consolidation or into which the Company or
PP&L Resources, as the case may be, is merged or the Person which
acquires by conveyance or transfer, or which leases, the property
and assets of the Company or PP&L Resources, as the case may be,
substantially as an entirety is a Person organized and existing
under the laws of the United States of America or any State
thereof or the District of Columbia, and expressly assumes, by
supplemental indenture, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all
the Outstanding Indenture Securities (or the Guarantees endorsed
thereon, as the case may be,) and the performance of all of the
covenants of the Company or PP&L Resources, as the case may be,
under the Indenture, and (b) immediately after giving effect to
such transactions, no Event of Default, and no event which after
notice or lapse of time or both would become an Event of Default,
will have occurred and be continuing. (See Section 1101.)
Neither the Indenture or the Guarantee contains any
financial or other similar restrictive covenants.
MODIFICATION OF INDENTURE
Without the consent of any Holders of Indenture Securities,
the Company, PP&L Resources and the Trustee may enter into one or
more supplemental indentures for any of the following purposes:
(a) to evidence the succession of another Person to
the Company or PP&L Resources, as the case may be, and the
assumption by any such successor of the covenants of the
Company or PP&L Resources, as the case may be, in the
Indenture and the Indenture Securities or the Guarantees
endorsed thereon; or
(b) to add one or more covenants of the Company or
PP&L Resources or other provisions for the benefit of the
Holders of all or any series of Indenture Securities or any
tranche thereof, or to surrender any right or power
conferred upon the Company or PP&L Resources (and if such
covenants are to be for the benefit of less than all series
of Indenture Securities, stating that such covenants are
expressly being included solely for the benefit of such
series); or
(c) to add any additional Events of Default with
respect to all or any series of Outstanding Indenture
Securities (and if such additional Events of Default are to
be for the benefit of less than all series of Indenture
Securities, stating that such additional Events of Default
are expressly being included solely for the benefit of such
series); or
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(d) to change or eliminate any provision of the
Indenture or to add any new provision to the Indenture;
provided that if such change, elimination or addition will
adversely affect the interests of the Holders of Indenture
Securities of any series or tranche Outstanding on the date
of such supplemental indenture in any material respect, such
change, elimination or addition will become effective with
respect to such series or tranche only with the consent of
the Holders of the Indenture Securities of such series or
tranche pursuant to the applicable provisions of the
Indenture or when there is no Indenture Security of such
series or tranche remaining Outstanding under the Indenture;
or
(e) to provide collateral security for the Indenture
Securities; or
(f) to establish the form or terms of Indenture
Securities of any series or tranche or any Guarantees as
permitted by the Indenture; or
(g) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto
representing interest, if any, thereon and for the
registration, exchange and replacement thereof and for the
giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and any matters incidental
thereto;
(h) to evidence and provide for the acceptance of
appointment of a separate or successor Trustee under the
Indenture with respect to the Indenture Securities of one or
more series and to add to or change any of the provisions of
the Indenture as shall be necessary to provide for or
facilitate the administration of the trusts under the
Indenture by more than one trustee; or
(i) to provide for the procedures required to permit
the utilization of a noncertificated system of registration
for any series or tranche of Indenture Securities; or
(j) to change any place or places where (1) the
principal of and premium, if any, and interest, if any, on
Indenture Securities of any series, or any tranche thereof,
shall be payable, (2) Indenture Securities of any series, or
any tranche thereof, may be surrendered for registration of
transfer, (3) Indenture Securities of any series, or any
tranche thereof, may be surrendered for exchange and (4)
notices and demands to or upon the Company or PP&L Resources
in respect of the Indenture Securities of any series, or any
tranche thereof, and the Indenture may be served; or
(k) to cure any ambiguity, defect or inconsistency or
to make any other changes or to add other provisions with
respect to matters and questions arising under the
Indenture, provided such other changes shall not adversely
affect the interests of the Holders of Indenture Securities
of any series or tranche in any material respect. (See
Section 1201.)
Without limiting the generality of the foregoing, if the
Trust Indenture Act is amended after the date the Indenture was
originally executed in such a way as to require changes to the
Indenture or the incorporation therein of additional provisions
or so as to permit changes to, or the elimination of, provisions
which, at the date the Indenture was originally executed or at
any time thereafter, were required by the Trust Indenture Act to
be contained in the Indenture, the Indenture will be deemed to
have been amended so as to conform to such amendment or to effect
such changes or elimination, and the Company, PP&L Resources and
the Trustee may, without the consent of any Holders, enter into
one or more supplemental indentures to effect or evidence such
amendment.
Except as provided above, the consent of the Holders of not
less than a majority in aggregate principal amount of the
Indenture Securities of all series then Outstanding under the
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Indenture, considered as one class, is required for the purpose
of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the Indenture pursuant to
an indenture or supplemental indenture; provided, however, that
if less than all of the series of Outstanding Indenture
Securities are directly affected by a proposed supplemental
indenture, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Indenture
Securities of all series so directly affected, considered as one
class, will be required; and provided, further, that if the
Indenture Securities of any series have been issued in more than
one tranche and if the proposed supplemental indenture directly
affects the rights of the Holders of Indenture Securities of one
or more, but less than all, of such tranches, then the consent
only of the Holders of a majority in aggregate principal amount
of the Outstanding Indenture Securities of all tranches so
directly affected, considered as one class, will be required; and
provided, further, that no such amendment or modification may,
without the consent of the Holder of each Outstanding Indenture
Security directly affected thereby, (a) change the stated
maturity of the principal of, or any installment of principal of
or interest on, any Indenture Security (other than pursuant to
the terms thereof), or reduce the principal amount thereof or the
rate of interest thereon (or the amount of any installment of
interest thereon) or change the method of calculating such rate
or reduce any premium payable upon the redemption thereof, or
reduce the amount of the principal of a discount security that
would be due and payable upon a declaration of acceleration or
maturity or change the coin or currency (or other property) in
which any Indenture Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity
thereof (or, in the case of redemption, on or after the
redemption date), (b) reduce the percentage in principal amount
of the Outstanding Indenture Securities of any series or tranche
the consent of the Holders of which is required for any
supplemental indenture or waiver of compliance with any provision
of the Indenture or any default thereunder and its consequences
or to reduce the requirements for quorum and voting under the
Indenture or (c) modify certain of the provisions in the
Indenture relating to supplemental indentures, waivers of certain
covenants and waivers of past defaults.
A supplemental indenture which changes or eliminates any
covenant or other provision of the Indenture which has expressly
been included solely for the benefit of Holders of, or which is
to remain in effect only so long as there shall be Outstanding,
Indenture Securities of one or more particular series or one or
more tranches thereof, or which modifies the rights of the
Holders of Indenture Securities of such series or tranches with
respect to such covenant or other provision, will be deemed not
to affect the rights under the Indenture of the Holders of
Indenture Securities of any other series or tranche. (See Section
1202.)
The Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding
Indenture Securities have given or taken any request, demand,
authorization, direction, notice, consent, waiver or other action
under the Indenture as of any date or are present at a meeting of
Holders for quorum purposes, certain Indenture Securities,
including those for whose payment or redemption money has been
deposited or set aside in trust for the Holders as described
under "Satisfaction and Discharge" below, will not be deemed to
be Outstanding for purposes of the Indenture (See Section 101.)
The Company or PP&L Resources will be entitled to set any
day as a record date for the purpose of determining the Holders
of Outstanding Indenture Securities of any series entitled to
give or take any request, demand, authorization, direction,
notice, consent, waiver or other action under the Indenture, in
the manner and subject to the limitations provided in the
Indenture. In certain circumstances, the Trustee also will be
entitled to set a record date for action by Holders. If a record
date is set for any action to be taken by Holders of particular
Indenture Securities, such action may be taken only by persons
who are Holders of such Indenture Securities on the record date.
(See Section 104.)
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SATISFACTION AND DISCHARGE
Any Indenture Securities or any portion of the principal
amount thereof will be deemed to have been paid for purposes of
the Indenture, and at the Company's election, the entire
indebtedness of the Company and PP&L Resources in respect thereof
will be satisfied and discharged, if there shall have been
irrevocably deposited with the Trustee or any Paying Agent (other
than the Company or PP&L Resources), in trust: (a) money in the
amount which will be sufficient, or (b) in the case of a deposit
made prior to the maturity of such Indenture Securities,
Government Obligations (as defined below), which do not contain
provisions permitting the redemption or other prepayment thereof
at the option of the issuer thereof, the principal of and the
interest on which when due, without any regard to reinvestment
thereof, will provide monies which, together with the money, if
any, deposited with or held by the Trustee or such Paying Agent,
will be sufficient, or (c) a combination of (a) and (b) which
will be sufficient, to pay when due the principal of and premium,
if any, and interest due and to become due on such Indenture
Securities or portions thereof on and prior to the maturity
thereof. (See Section 701.) For this purpose, Government
Obligations include (a) direct obligations of the United States
of America or of an agency or instrumentality of the United
States of America where the payments thereunder are
unconditionally guaranteed as a full faith and credit obligation
by the United States of America or (b) depository receipts issued
by a bank with respect to any such obligations or in any specific
interest or principal payments due in respect thereof.
The Indenture will be deemed to have been satisfied and
discharged when no Indenture Securities remain Outstanding
thereunder and the Company or PP&L Resources has paid or caused
to be paid all other sums payable by the Company or PP&L
Resources under the Indenture. (See Section 702.)
All moneys paid by the Company or PP&L Resources to the
Trustee or any Paying Agent for the payment of the principal of
or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium
or interest has become due and payable will be paid to or upon
the order of the Company, and the Holder of such Debt Security
thereafter may look only to the Company or PP&L Resources for
payment thereof. (See Section 603.)
RESIGNATION OF THE TRUSTEE
The Trustee may resign at any time by giving written notice
thereof to the Company and PP&L Resources or may be removed at
any time by Act of the Holders of a majority in principal amount
of the then Outstanding Debt Securities of any series delivered
to the Trustee, the Company and PP&L Resources. No resignation
or removal of the Trustee and no appointment of a successor
trustee will become effective until the acceptance of appointment
by a successor trustee in accordance with the requirements of the
Indenture. So long as no Event of Default or event which, after
notice or lapse of time, or both, would become an Event of
Default has occurred and is continuing and except with respect to
a Trustee appointed by Act of the Holders, if each of the Company
and PP&L Resources has delivered to the Trustee a resolution of
its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the
terms of the Indenture, the Trustee will be deemed to have
resigned and the successor will be deemed to have been appointed
as trustee in accordance with the Indenture. (Section 910).
CERTAIN PENNSYLVANIA TAX MATTERS
In the opinion of Michael A. McGrail, Esq., Senior Counsel
of PP&L, Debt Securities owned by individuals residing in
Pennsylvania are subject to the 4 mills ($4.00 on each $1,000 of
principal amount) Pennsylvania corporate loans tax. Such tax
will be withheld from interest payments to such individuals.
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Mr. McGrail is also of the opinion that the Debt Securities are
exempt from existing personal property taxes in Pennsylvania.
THE TRUSTEE
The Chase Manhattan Bank has at various times in the
ordinary course of business made loans to PP&L Resources and
PP&L, and acts as Administrative Agent with respect to the
current revolving credit facilities of PP&L and PP&L Resources.
The Chase Manhattan Bank acts as trustee with respect to junior
subordinated deferrable interest debentures of PP&L, acts as
guarantee trustee and property trustee with respect to trust
originated preferred securities and common securities of PP&L
Capital Trust I and PP&L Capital Trust II, affiliates of the
Company and PP&L Resources, and Chase Manhattan Bank Delaware, an
affiliate of the Trustee, also acts as Delaware trustee with
respect to the trust originated preferred securities and common
securities.
EXPERTS
The consolidated financial statements of PP&L Resources as
of December 31, 1996 and 1995, and for the two years then ended,
incorporated in this Prospectus by reference to the Annual Report
on Form 10-K of PP&L Resources for the year ended December 31,
1996, have been so incorporated in reliance on the report (which
contains an explanatory paragraph relating to a reorganization
pursuant to which PP&L Resources became the parent of PP&L) of
Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of PP&L (prior to
restatement in connection with the reorganization referred to
above and not presented separately in the Annual Report
hereinafter referred to), and related financial statement
schedule as of December 31, 1994 and for the year ended December
31, 1994, incorporated in this Prospectus by reference from PP&L
Resources' 1996 Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been
so incorporated in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
Statements made in the Incorporated Documents as to matters
of law and legal conclusions have been reviewed by Michael A.
McGrail, Esq., Senior Counsel of PP&L, and have been made in
reliance upon his authority as an expert.
VALIDITY OF THE DEBT SECURITIES AND THE GUARANTEES
The validity of the Guarantees will be passed upon for PP&L
Resources by Michael A. McGrail, Esq., Senior Counsel of PP&L and
Reid & Priest LLP, New York, New York, counsel to PP&L Resources.
The validity of the Debt Securities will be passed upon for the
Company by Reid & Priest LLP, as counsel to the Company. The
validity of the Debt Securities and the Guarantees will be passed
upon for any underwriters or agents by Sullivan & Cromwell, New
York, New York. As to matters involving the law of the
Commonwealth of Pennsylvania, Reid & Priest LLP and Sullivan &
Cromwell will rely on the opinion of Mr. McGrail.
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<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more
underwriters for public offering and sale by them or may sell
Debt Securities to purchasers directly or through agents. Any
underwriter or agent involved in the offer and sale of Debt
Securities will be named in an applicable Prospectus Supplement.
Underwriters may offer and sell Debt Securities at a fixed
price or prices, which may be changed, or from time to time at
market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. In
connection with the sale of Debt Securities, underwriters may be
deemed to have received compensation from the Company in the form
of underwriting discounts or commissions and may also receive
commissions from purchasers of Debt Securities for whom they may
act as agent. Underwriters may sell Debt Securities to or
through dealers, and such dealers may receive compensation in the
form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time
to time) from the purchasers for whom they may act as agent.
The Debt Securities may also be sold from time to time
either by the Company directly or through agents designated by
the Company. Any agent involved in the offer or sale of any Debt
Securities in respect to which this Prospectus is delivered will
be named, and any commissions payable by the Company to such
agent will be set forth in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment.
Any underwriting compensation paid by the Company to
underwriters or agents in connection with the offering of Debt
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Debt Securities
may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on
resale of the Debt Securities may be deemed to be underwriting
discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under
agreements with the Company and PP&L Resources, to
indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and
to reimbursement by the Company or PP&L Resources for certain
expenses. Unless otherwise set forth in the Prospectus
Supplement relating thereto, the obligations of the underwriters
to purchase Debt Securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all
the Debt Securities if any are purchased.
The Debt Securities may also be sold directly by the Company
to institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will
be described in the Prospectus Supplement relating thereto.
Unless otherwise provided in a Prospectus Supplement, the
Debt Securities will not be listed on any securities exchange.
The Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Debt
Securities are sold by the Company for public offering and sale
may make a market in such Debt Securities, but such underwriters
will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as
to the liquidity of or the trading markets for any Debt
Securities.
Certain of the underwriters or agents and their associates
may be customers of, engage in transactions with or perform
services for the Company or PP&L Resources or their affiliates in
the ordinary course of business.
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No dealer, salesperson or other individual has been
authorized to give any information or to make any representations
other than contained or incorporated by reference in this
Prospectus Supplement, the applicable Pricing Supplement or the
Prospectus in connection with the offer made by this Prospectus
Supplement, the applicable Pricing Supplement and the Prospectus
and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company, PP&L
Resources or the Agents. Neither the delivery of this Prospectus
Supplement, the applicable Pricing Supplement or the Prospectus
nor any sale made hereunder and thereunder shall under any
circumstance create an implication that there has not been any
change in the affairs of the Company or PP&L Resources since the
date hereof. This Prospectus Supplement, the applicable Pricing
Supplement and the Prospectus do not constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such
offer is not qualified to do so or to anyone to whom it is
unlawful to make such offer or solicitation.
--------------------------
TABLE OF CONTENTS
Page
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PROSPECTUS SUPPLEMENT
Description of the Notes . . . . . . . . . . . . . . . . . . S-3
Certain United States Federal Income Tax
Considerations . . . . . . . . . . . . . . . . . . . . . S-18
Validity of the Notes and the
Guarantees . . . . . . . . . . . . . . . . . . . . . . . S-21
Supplemental Plan of Distribution . . . . . . . . . . . . . S-21
PROSPECTUS
Available Information . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
By Reference . . . . . . . . . . . . . . . . . . . . . . . . 2
PP&L Resources . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 4
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . 4
Description of the Debt Securities . . . . . . . . . . . . . . 4
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Validity of the Debt Securities
and the Guarantees . . . . . . . . . . . . . . . . . . . . 14
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 15
=================================================================
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$400,000,000
PP&L CAPITAL FUNDING, INC.
MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS TO FORTY YEARS
FROM DATE OF ISSUE
UNCONDITIONALLY GUARANTEED
AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
PP&L RESOURCES, INC.
--------------------------
PROSPECTUS SUPPLEMENT
--------------------------
MERRILL LYNCH & CO.
FIRST CHICAGO CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
November 12, 1997
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