SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: September 21, 1998
Southern Natural Gas Company
(Exact name of registrant as specified in its charter)
Delaware 1-2745 63-0196650
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
AmSouth-Sonat Tower
Birmingham, Alabama 35203
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
205-325-7410
<PAGE>
Item 5. Other Events.
On September 21, 1998, Southern Natural Gas Company (the "Company") entered into
an Underwriting Agreement, in the form attached hereto as Exhibit 1, with the
Underwriters named therein with respect to the issue and sale by the Company of
$100,000,000 aggregate principal amount of its 6.125% Notes due September 15,
2008 (the "Notes"), registered under its Registration Statement on Form S-3 (No.
333-47959) (the "Registration Statement"). The Notes will be issued under the
Indenture dated as of June 1, 1987, as supplemented by the First Supplemental
Indenture dated as of September 30, 1997, between the Company and The Chase
Manhattan Bank, formerly known as Chemical Bank, as successor by merger to
Manufactures Hanover Trust Company and Chemical Bank, as Trustee, in the form
incorporated by reference herein as Exhibits 4-(1) and 4-(2), respectively,
hereto.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
The Index to Exhibits to this Report is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Southern Natural Gas Company
By: /s/ James J. Cleary
James J. Cleary
Executive Vice President and
General Counsel
Dated: September 24, 1998
<PAGE>
SOUTHERN NATURAL GAS COMPANY
CURRENT REPORT ON FORM 8-K
INDEX TO EXHIBITS
Exhibit
No. Exhibit
1* Form of Underwriting Agreement, dated September 21, 1998
4-(1) Indenture, dated as of June 1, 1987, between the Company and The
Chase Manhattan Bank, formerly known as Chemical Bank, as successor
by merger to Manufacturers Hanover Trust Company, as Trustee,
incorporated by reference herein form Exhibit 4-(1) to Registration
Statement No. 33-47266, dated July 31, 1987
4-(2) First Supplemental Indenture dated as of September 30, 1997 between
the Company and the Trustee, incorporated by reference herein from
Exhibit 4-(2) to the Company's Current Report on Form 8-K dated
September 25, 1997
4-(3)* Form of Note
12* Computation of Ratio of Earnings to Fixed Charges
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* Filed herewith
EXHIBIT 1
UNDERWRITING AGREEMENT
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September 21, 1998
Southern Natural Gas Company,
Amsouth-Sonat Tower,
Birmingham, Alabama 35203.
Dear Sirs:
The underwriters named below (such underwriters being herein
called the "Underwriters") understand that Southern Natural Gas Company, a
Delaware corporation (the "Company"), proposes to issue and sell $100,000,000
aggregate principal amount of 6.125% Notes due September 15, 2008 (the
"Purchased Securities"), registered on Registration Statement No. 333-47959 (the
"Registration Statement"). Subject to the terms and conditions set forth herein
and incorporated by reference herein and referred to below, the Company hereby
agrees to sell and the Underwriters agree to purchase, severally and not
jointly, the principal amount of such Purchased Securities set forth opposite
their names at 98.881% of their principal amount.
Principal
Amount
Underwriter of Notes
Goldman, Sachs & Co.................................................$60,000,000
Chase Securities Inc................................................ 20,000,000
Merrill Lynch, Pierce Fenner & Smith
Incorporated...................................... 20,000,000
==========
Total...................................................$100,000,000
The Underwriters will pay for such Purchased Securities upon
delivery thereof at the offices of Sullivan & Cromwell, 125 Broad Street, New
York, New York at 10:00 a.m. (New York time) on September 24, 1998.
The Purchased Securities shall have the following terms:
Maturity: September 15, 2008
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Interest Rate: 6.125%
Redemption Provisions: Not redeemable prior to maturity.
Defeasance Provisions: Subject to the defeasance and covenant
defeasance provisions of Article 15 of the Indenture, dated as of
June 1, 1987, between the Company and The Chase Manhattan Bank,
as successor by merger to Manufacturers Hanover Trust Company, as
Trustee.
Interest Payment Dates: March 15 and September 15, commencing
March 15, 1999.
Unless otherwise provided herein, all the provisions contained in
the document entitled Southern Natural Gas Company Underwriting Agreement
Standard Provisions, dated March 1, 1998, a copy of which is filed as Exhibit
1-(2) to the Registration Statement, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such
provisions had been set forth in full herein.
All notices and communications hereunder to an Underwriter shall
be given to Goldman, Sachs & Co., attention of the Registration Statement, at
the address set forth below.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
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<PAGE>
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Very truly yours,
GOLDMAN, SACHS & CO.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER& SMITH
INCORPORATED
By:________________________________
(Goldman, Sachs & Co.)
Accepted:
SOUTHERN NATURAL GAS COMPANY
By:_____________________________
Name:
Title:
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<PAGE>
EXHIBIT 4-(3)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, 55 Water Street, New York, New
York (the "Depositary"), to Southern Natural Gas Company or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & Co. or in such other name as is requested by an
authorized representative of The Depository Trust Company (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
No. R-1 $100,000,000
CUSIP # 843452-AX-1
SOUTHERN NATURAL GAS COMPANY
6.125% Notes due September 15, 2008
Southern Natural Gas Company, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term shall also include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) on September 15, 2008 in such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of public
and private debts, and to pay interest on said principal sum, until said
principal sum is paid or made available for payment, at the rate of 6.125% per
annum in like coin or currency, from September 24, 1998 or from the most recent
March 15 or September 15, as the case may be (each, an "Interest Payment Date"),
to which interest has been paid or duly provided for, semi-annually on March 15
and September 15 in each year, commencing March 15, 1999 (provided, however,
that if the Company shall default in payment of the interest due on any Interest
Payment Date, then from the next preceding date to which interest has been paid
or if no interest has been paid on this global Security, then from September 24,
1998), and similarly to
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pay interest at the same rate per annum on any overdue principal and on any
overdue instalment of interest. The interest so payable on any March 15 or
September 15 will, subject to certain exceptions provided in the Indenture, be
paid to the person in whose name this permanent global Security (or one or more
predecessor Securities) is registered at the close of business on the March 1 or
September 1, as the case may be, next preceding such March 15 or September 15.
As used herein, the term "Depositary" shall mean the Depositary designated as
such by the Company under the Indenture described herein.
This permanent global Security is one of a duly authorized issue
of debentures, notes or other evidences of indebtedness of the Company (herein
referred to as the "Securities") of the series hereinafter specified, all issued
or to be issued under and pursuant to an Indenture, dated as of June 1, 1987,
duly executed and delivered by the Company to The Chase Manhattan Bank, a state
banking corporation organized and existing under the laws of the State of New
York (hereinafter referred to as the "Trustee"), formerly known as Chemical Bank
as successor by merger to Manufacturers Hanover Trust Company, as supplemented
by the First Supplemental Indenture, dated as of September 30, 1997, between the
Company and the Trustee (as so supplemented, the "Indenture"). Reference is made
to the Indenture and all indentures supplemental thereto for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption or sinking fund provisions (if any), may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This permanent global Security is one of the series designated as the
Company's 6.125% Notes due September 15, 2008, herein referred to as the
"Notes", limited in aggregate principal amount to $100,000,000.
This permanent global Security is exchangeable in whole or from
time to time in part for Securities of this series in definitive registered form
only as provided herein and in the Indenture. If (i) the Depositary notifies the
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Company that it is unwilling or unable to continue as Depositary for this
permanent global Security or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company in its sole discretion determines that this permanent
global Security shall be exchangeable for Securities of this series in
definitive registered form and executes and delivers to the Security registrar a
written order of the Company providing that this permanent global Security shall
be so exchangeable, or (iii) any event shall have occurred and be continuing
which, after notice or lapse of time, or both, would become an Event of Default
with respect to the Securities of the series of which this permanent global
Security is a part, this permanent global Security shall be exchangeable for
Securities of this series in definitive registered form, provided that the
definitive Securities so issued in exchange for this permanent global Security
shall be in denominations of $1,000 and any integral multiples, without coupons,
and be of like aggregate principal amount and tenor as the portion of this
permanent global Security to be exchanged, and provided further that, unless the
Company agrees otherwise, Securities of this series in definitive registered
form will be issued in exchange for this permanent global Security, or any
portion hereof, only if such Securities in definitive registered form were
requested by written notice to the Trustee or the Security registrar by or on
behalf of a Person who is the beneficial owner of an interest hereof given
through the Holder hereof. Except as provided above, owners of beneficial
interests in this permanent global Security will not be entitled to have
Securities registered in their names, will not receive or be entitled to
physical delivery of Securities in definitive registered form and will not be
considered the Holders thereof for any purpose under the Indenture. Neither the
Company, the Trustee, any Paying Agent nor the Securities registrar shall have
any responsibility or liability for any aspect of records relating to or
payments made on account of beneficial ownership interests in this permanent
global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Any exchange of this permanent global Security or portion hereof
for one or more Securities of this series in definitive registered form will be
made at the New York office of the Trustee or the Security registrar, upon
request by or on behalf of the Person who is the beneficial
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<PAGE>
owner of an interest herein given through the Holder hereof and in accordance
with instructions given by the Company to the Trustee, the Security registrar
and the Depositary. Upon exchange of any portion of this permanent global
Security for one or more Securities of this series in definitive registered
form, the Trustee or the Security registrar, as the case may be, shall cancel
this permanent global Security and issue a new permanent global Security or
Securities of this series and of like tenor for the remaining principal amount.
Except as otherwise provided herein or in the Indenture, until exchanged in full
for one or more Securities of this series in definitive registered form, this
permanent global Security shall in all respects be subject to and entitled to
the same benefits and conditions under the Indenture as a duly authenticated and
delivered Security of this series in definitive registered form.
Payment of the principal of (and premium, if any) and interest on
this permanent global Security due at maturity will be made by wire transfer in
immediately available funds to such account as may have been designated to the
Paying Agent upon surrender of this Security at the corporate trust office of
the Paying Agent in the Borough of Manhattan, The City of New York, provided
that this permanent global Security is presented to the Paying Agent in time for
the Paying Agent to make such payment in accordance with its normal procedures.
Payments of interest (other than interest payable at maturity) will be made by
check mailed to the address of the Person entitled thereto as it appears in the
Security register, or by wire transfer in immediately available funds to such
account as may have been designated to the Paying Agent.
In case an Event of Default, as defined in the Indenture, with
respect to the Notes shall have occurred and be continuing, the principal of all
of the Notes (including this permanent global Security) and the accrued interest
thereon may be declared, and upon such declaration shall become, due and
payable, and such declaration may in certain events be rescinded by the Holders
of a majority in aggregate principal amount of the Notes at the time
Outstanding, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture also provides that the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding may waive (with
certain exceptions) any
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<PAGE>
past default under the Indenture and its consequences. The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding of each series to be affected, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Securities of each such series; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Security, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or any premium thereon, or make the principal thereof
or any premium or interest thereon payable in any coin or currency other than
that hereinbefore provided, without the consent of the Holder of such Security,
or (ii) reduce the aforesaid percentage of Securities, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of all Securities affected thereby. Any such waiver or consent by
the Holder of this permanent global Security (unless effectively revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this permanent global Security and of any
Security or Securities issued in exchange herefor or in lieu hereof,
irrespective of whether any notation of such waiver or consent is made upon this
permanent global Security.
The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company on this permanent global Security and
(b) a restrictive covenant and the related Event of Default, upon compliance by
the Company with certain conditions set forth therein, which provisions apply to
this permanent global Security.
Nothing in the Indenture prohibits the consolidation or merger of
the Company with or into any corporation or corporations, or the sale or
conveyance of all or substantially all of the Company's properties and assets to
any other person, without the consent of the Holders, provided that, in the case
of any consolidation of the Company with, or merger of the Company into, any
corporation or corporations, or any sale or conveyance of the properties and
assets of the Company as an entirety or substantially as an entirety, the
successor corporation, or
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<PAGE>
the person which acquired by sale or conveyance all or substantially all of the
Company's properties and assets, as the case may be, assumes all of the
obligations of the Company under the Indenture and certain other conditions are
met. Upon such assumption the Company will be released from its liability as
obligor on this permanent global Security and all other obligations and
covenants under the Indenture.
Except as set forth in the preceding two paragraphs, no reference
herein to the Indenture and no provision of this permanent global Security shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium if any, and interest on this
permanent global Security at the time and place and at the rate and in the coin
or currency herein prescribed.
This permanent global Security is not redeemable prior to
maturity.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this permanent global Security is registrable
in the Security register, upon surrender of this permanent global Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this permanent
global Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
registrar duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any such registration of
transfer or exchange of Securities as provided above, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Company, the Trustee, any Paying Agent and any agent of the
Company or the Trustee may treat the Person in whose name this permanent global
Security is registered as the owner hereof for all purposes, whether or not this
permanent global Security be overdue, and neither the
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<PAGE>
Company, the Trustee nor any such agent shall be affected by notice to the
contrary (including, without limitation, notice of any beneficial interests
herein).
No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on this permanent global Security, or for any
claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
All terms used in this permanent global Security which are
defined in the Indenture and not herein otherwise defined shall have the
meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed
by the Trustee by manual signature, this permanent global Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: September 24, 1998 SOUTHERN NATURAL GAS COMPANY
By:____________________
Name:
Title:
[SEAL]
Attest:______________________
Title:
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<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the permanent global Securities of the series designated herein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By
Authorized Officer
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<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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- ------------------------------------------------------------
- ------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
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the within permanent global Security and all rights thereunder, and hereby does
irrevocably appoint ____________________________________ attorney to transfer
said permanent global Security on the books of the Company, with full power of
substitution in the premises.
Dated: _______________________
NOTICE: The signature to this assignment must correspond with the
name as written upon the face of the within permanent global Security in
every particular without alteration or enlargement or any change
whatsoever and must be guaranteed by a commercial bank or trust company
having its principal office or correspondent in The City of New York or
by a member of the New York Stock Exchange.
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<PAGE>
EXHIBIT 12
SOUTHERN NATURAL GAS COMPANY AND SUBSIDIARIES
Computation of Ratios of Earnings
From Continuing Operations to Fixed Charges
Total Enterprise (a)
<TABLE>
<CAPTION>
Six Months Ended June 30, Years Ended December 31,
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(In Thousands)
Earnings from Continuing Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes $ 96,946 $ 88,945 $170,227 $150,219 $134,124 $ 76,098 $127,618
Fixed charges (see computation below) 19,645 16,569 34,785 43,028 48,779 47,576 58,250
-------- -------- -------- -------- -------- -------- --------
Total Earnings Available for Fixed Charges $116,591 $105,514 $205,012 $193,247 $182,903 $123,674 $185,868
======== ======== ======== ======== ======== ======== ========
Fixed Charges:
Interest expense before deducting
interest capitalized $ 18,573 $ 15,792 $ 33,130 $ 41,147 $ 46,859 $ 45,900 $ 56,600
Rentals(b) 1,072 777 1,655 1,881 1,920 1,676 1,650
-------- -------- -------- -------- -------- -------- --------
$ 19,645 $ 16,569 $ 34,785 $ 43,028 $ 48,779 $ 47,576 $ 58,250
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 5.9 6.4 5.9 4.5 3.7 2.6 3.2
==== ==== ==== ==== ==== ==== ====
</TABLE>
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(a) Amounts include the Company's portion of the captions as they relate to
persons accounted for by the equity method.
(b) These amounts represent 1/3 of rentals which approximate the interest
factor applicable to such rentals of the Company and its subsidiaries and
continuing unconsolidated affiliates.
