<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-50331
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 9, 1994)
$125,000,000
BALTIMORE GAS AND ELECTRIC COMPANY
FLOATING RATE SERIES DUE APRIL 15, 1999 FIRST REFUNDING MORTGAGE BONDS
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Interest on the New Bonds offered hereby (the "Offered Bonds") will accrue
from, and begin on, March 21, 1994 and payments will be made quarterly on
January 15, April 15, July 15, and October 15, beginning on July 15, 1994. The
per annum rate of interest for each Interest Period will be reset quarterly as
described herein based on the three month London interbank offered rate
(LIBOR), plus .15%. The Offered Bonds will be redeemable at the option of the
Company at 100% of principal amount, provided that, prior to April 15, 1996,
the Offered Bonds shall not be redeemable for any reason. The First Refunding
Mortgage Bonds are entitled to the benefit of a 1% annual sinking fund which
may be satisfied by Bonds of any series including the Offered Bonds, subject
to certain limitations. The Offered Bonds may not be redeemed for the sinking
fund prior to August 1, 1996. See "Certain Terms of Offered Bonds" in this
Prospectus Supplement and "Description of New Bonds" in the accompanying
Prospectus for other important information about the Offered Bonds.
The Offered Bonds will initially be represented by a global bond ("Book-
Entry Bonds") registered in the name of a nominee of The Depository Trust
Company, as Depositary, but may, under certain limited circumstances, be
exchangeable for certificates issued in definitive form ("Definitive Bonds").
Beneficial interest in Book-Entry Bonds will trade in the Depositary's Same-
Day Funds Settlement System, and secondary market trading activity in such
interests will therefore settle in same-day funds. Beneficial interests in
Book-Entry Bonds will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary (with respect to its
participants' interests) and its participants. See Book-Entry System in the
accompanying Prospectus.
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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 OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Bond................................ 100.00% .45% 99.55%
- --------------------------------------------------------------------------------
Total................................... $125,000,000 $562,500 $124,437,500
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- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from March 21, 1994 to date of delivery.
(2) Before deduction of expenses payable by the Company, estimated at
$400,000.
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The Offered Bonds are subject to receipt and acceptance by the Underwriter
named below (the "Underwriter"), to prior sale and to the Underwriter's right
to reject any order in whole or in part and to withdraw, cancel or modify the
offer without notice. It is expected that delivery of the global bond will be
made through the facilities of The Depository Trust Company, on or about March
21, 1994.
----------------
LEHMAN BROTHERS
MARCH 14, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
HEREBY OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
USE OF PROCEEDS
A portion of the net proceeds from the sale of the Offered Bonds will be used
to redeem all $28,638,000 principal amount of the 7% Series due 1998 First
Refunding Mortgage Sinking Fund Bonds. For further information with respect to
the use of proceeds see "Use of Proceeds" on page 3 of the accompanying
Prospectus.
CERTAIN TERMS OF OFFERED BONDS
The Offered Bonds are to be issued under a Supplemental Indenture to be dated
as of March 15, 1994.
MATURITY AND INTEREST RATE
The Offered Bonds are to mature April 15, 1999 and will bear interest at the
rates per annum determined as described below. Interest shall be payable
quarterly on January 15, April 15, July 15, and October 15 (the "Interest
Payment Dates"), with the first interest payment accruing from March 21, 1994
and paid on July 15, 1994. The period commencing on an Interest Payment Date
and ending on and excluding the next succeeding Interest Payment Date is called
an "Interest Period," with the exception that the first Interest Period shall
extend from March 21, 1994 to July 15, 1994, the first Interest Payment Date.
Interest will be payable to the persons in whose names the Offered Bonds are
registered at the close of business on the last day of the calendar month next
preceding such Interest Payment Date.
Payment of the principal of and interest on each global bond representing
Book-Entry Bonds will be made on each Interest Payment Date or at maturity by
the Trustee as paying agent by wire transfer of immediately available funds to
a separate account of the Depositary or its nominee at the Federal Reserve Bank
of New York, provided that, in the case of payments made at maturity of such
global bond, the global bond is presented to the Trustee in time for the
Trustee to make such payments in accordance with its normal procedures.
Payments to beneficial owners of Book-Entry Bonds will be made through the
Depositary and its participants. For further information on Book-Entry Bonds
and a description of the payment of principal and interest on Definitive Bonds,
see "DESCRIPTION OF NEW BONDS" in the accompanying Prospectus.
The Offered Bonds will bear interest at an interest rate calculated based
upon three month LIBOR plus .15%. LIBOR will be determined on the second London
Business Day (as defined below) prior to the first day of each Interest Period
(the "Interest Determination Date"). LIBOR will be determined by Bankers Trust
Company acting as calculation agent (the "Calculation Agent") in accordance
with the following provisions:
(a) With respect to any Interest Determination Date, LIBOR will be
determined on the basis of the offered rates for deposits of not less than
$1,000,000 having the index maturity of three months, commencing on the
second business day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market ("London Business Day")
immediately following such Interest Determination Date, which appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, on that Interest
Determination Date. If at least two such offered rates appear on the
Reuters Screen LIBO Page, the rate for such Interest Determination Date
will be the arithmetic mean of such offered rates as determined by the
Calculation Agent.
S-2
<PAGE>
(b) With respect to an Interest Determination Date on which fewer than
two offered rates for the three month index maturity appear on the Reuters
Screen LIBO Page as described in (a) above, LIBOR will be determined on the
basis of the rates at approximately 11:00 A.M., London time, on such
Interest Determination Date at which deposits in U.S. dollars having the
three month index maturity are offered to prime banks in the London
interbank market by four major banks in the London interbank market
selected by the Calculation Agent commencing on the second London Business
Day immediately following such Interest Determination Date and in a
principal amount not less than $1,000,000 that in the Calculation Agent's
judgment is representative for a single transaction in such market at such
time (a "Representative Amount"). The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR for such Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR for such Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on such Interest Determination Date by three
major banks in The City of New York, selected by the Calculation Agent, for
loans in U.S. dollars to leading European banks having the three month
index maturity commencing on the second London Business Day immediately
following such Interest Determination Date and in a Representative Amount;
provided, however, that if fewer than three banks selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the rate
of interest in effect for the applicable period will be the same as the
rate of interest in effect for the immediately preceding Interest Period.
Upon the request of the holder of any Offered Bond, the Calculation Agent
will provide the interest rate then in effect, and if different, the interest
rate which will become effective as a result of a determination made on the
most recent Interest Determination Date with respect to such Offered Bond.
REDEMPTION PROVISIONS
The Offered Bonds are to be redeemable, beginning on April 15, 1996, upon
thirty days' notice, in the manner set forth in the Mortgage, in whole or in
part, at the option of the Company, if redeemed otherwise than by the operation
of the Sinking Fund, and beginning on August 1, 1996 if redeemed by the
operation of the Sinking Fund, at 100% of principal amount, with interest
accrued to the date of redemption.
UNDERWRITING
Subject to the terms and conditions of the Purchase Agreement between the
Company and Lehman Brothers Inc. (the "Underwriter"), the Company has agreed to
sell, and the Underwriter has agreed to purchase all of the Offered Bonds.
The Purchase Agreement provides that the obligations of the Underwriter are
subject to certain conditions. The nature of the Underwriter's obligations is
such that it is committed to purchase all of the Offered Bonds if any are
purchased.
The Underwriter proposes to offer the Offered Bonds directly to the public at
the public offering price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price, less a concession not in
excess of .300% of the principal amount. Such dealers may reallow a concession
not in excess of .200% of such principal amount to certain other dealers. After
the initial public offering, the offering price and other selling terms may be
changed.
There is currently no trading market for the Offered Bonds. The Underwriter
may, but is not obligated to, make a market in the Offered Bonds and no
assurance is given that a market for the Offered Bonds will develop.
The Company has agreed to indemnify the Underwriter against certain
liabilities including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments that the Underwriter may be required to make in
respect thereof.
S-3
<PAGE>
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P R O S P E C T U S
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BALTIMORE GAS AND ELECTRIC COMPANY
$250,000,000
FIRST REFUNDING MORTGAGE BONDS
Baltimore Gas and Electric Company (the "Company") intends from time to time
to sell up to $250,000,000 aggregate principal amount of its First Refunding
Mortgage Bonds (the "New Bonds") on terms to be determined at the time of
offering. The specific designation, aggregate principal amount, maturity, rate
(or method of calculation) and time of payment of interest, redemption and
sinking fund terms, other specific terms and any listing on a securities
exchange of each series of the New Bonds in respect of which this Prospectus is
being delivered will be set forth in a Prospectus Supplement (the "Prospectus
Supplement"), together with the terms of offering of the New Bonds. The
securities will be offered as set forth under "PLAN OF DISTRIBUTION." See
"DESCRIPTION OF NEW BONDS" for other important information about the New Bonds.
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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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------------------------------
The date of this Prospectus is March 9, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and in accordance therewith files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy and information statements, and other information
filed by the Company 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 certain of its Regional Offices at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-
2511, and 75 Park Place, Room 1228, New York, New York 10007. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Certain
securities of the Company are listed on the New York, Chicago, Pacific and
Philadelphia Stock Exchanges. Reports, proxy and information statements and
other information concerning the Company can be inspected at such exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission under the
1934 Act (File No. 1-1910), are incorporated in this Prospectus by reference as
of their respective dates of filing and shall be deemed to be a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, as amended by a Form 8 dated April 27, 1993 (the "1992
Form 10-K").
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, June 30, 1993 and September 30, 1993.
(c) The Company's Current Reports on Form 8-K filed January 29, 1993 and
August 20, 1993.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby 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 COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE
REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS THE EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THE PROSPECTUS
INCORPORATES. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO CHARLES W.
SHIVERY, VICE PRESIDENT, BALTIMORE GAS AND ELECTRIC COMPANY, P.O. BOX 1475,
BALTIMORE, MARYLAND 21203, (410) 234-5511.
2
<PAGE>
THE COMPANY
The Company, incorporated under the law of the State of Maryland on June 20,
1906, is a public utility primarily engaged in the business of producing,
purchasing and selling electricity, and purchasing, transporting and selling
natural gas within the State of Maryland. The Company is qualified to do
business in the Commonwealth of Pennsylvania where it is participating in the
ownership and operation of two electric generating plants and the District of
Columbia where its federal affairs office is located. The Company also owns
two-thirds of the outstanding capital stock, including one-half of the voting
securities, of Safe Harbor Water Power Corporation, a hydroelectric producer on
the Susquehanna River at Safe Harbor, Pennsylvania. BNG, Inc., a wholly owned
subsidiary of the Company, invests in natural gas reserves. Other business of
the Company includes the sale of gas and electric appliances.
The Company's diversified business activities are consolidated under
Constellation Holdings, Inc., a wholly owned subsidiary of the Company.
Diversified business activities include power generation projects, financial
investments, and real estate projects (including senior living facilities).
The executive offices of the Company are located in the Gas and Electric
Building, Charles Center, Baltimore, Maryland 21201; its mailing address is P.
O. Box 1475, Baltimore, Maryland 21203; and its telephone number is (410) 234-
5000.
USE OF PROCEEDS
The net proceeds from the sale of the New Bonds offered hereby will be used
to meet capital requirements or for other general corporate purposes relating
to the Company's utility business which may include the repayment of commercial
paper borrowings incurred primarily to finance, on a temporary basis, the
Company's utility construction, other capital expenditures and operations. The
Company's average commercial paper balance and interest rate for the twelve
months ended January 31, 1994 were $7,523,000 and 3.23%, respectively. To the
extent that the net proceeds from the sale of the New Bonds are not immediately
so used, they will be temporarily invested in short-term, interest-bearing
obligations. For further information with respect to the Company's utility
construction, other capital expenditures and operations, reference is made to
the information incorporated by reference herein. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
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DECEMBER 31,
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1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<C> <C> <C> <C> <C>
3.00 2.65 2.27 1.78 3.02
</TABLE>
The Ratio of Earnings to Fixed Charges for future periods will be included in
the Company's Reports on Forms 10-Q and 10-K. Such Reports are incorporated by
reference into this Prospectus at the time they are filed.
DESCRIPTION OF NEW BONDS
GENERAL
The New Bonds will be issued in one or more series under and will be secured
by an indenture between the Company and Bankers Trust Company, Trustee (the
"Trustee"), dated February 1, 1919, as
3
<PAGE>
supplemented and amended and as it is to be supplemented by a supplemental
indenture for each series of New Bonds (such indenture, as so supplemented and
amended, the "Mortgage"). This Prospectus includes brief outlines of certain
provisions contained in the Mortgage. Such outlines do not purport to be
complete and are qualified in their entirety by express reference to the
Mortgage, which is incorporated by reference as an Exhibit to the Registration
Statement. The Mortgage may be inspected at the offices of the Corporate Trust
and Agency Group of Bankers Trust Company, Four Albany Street, New York, New
York 10015.
Each series of New Bonds will have a stated principal amount, maturity date,
interest rate(s) (or the method of determining such rate(s)), and other
specific terms as may be determined at the time of sale, all of which will be
set forth in the Prospectus Supplement relating to such series.
New Bonds may be issued, as indicated in the applicable Prospectus
Supplement, in definitive form ("Definitive Bonds") or may be represented by a
permanent global Bond or Bonds ("Book-Entry Bonds") registered in the name of a
depositary or its nominee (the "Depositary"). See "Book-Entry System" below.
Interest, payable at the times and, at the rate(s) (or the method of
determining such rate(s)) set forth in such Supplement (subject to certain
exceptions provided in the Mortgage) will be paid to the persons in whose names
the Definitive Bonds are registered at the close of business on the record date
set forth therein and, at the option of the Company, may be paid by checks
mailed to such persons at their registered addresses. The Definitive Bonds will
be issued as registered bonds in denominations of $1,000 and multiples thereof,
and will be exchangeable for other Definitive Bonds of the same series in equal
aggregate principal amounts without charge to the holders except for any
applicable tax or governmental charge.
The Mortgage does not contain any covenant or other provision that
specifically is intended to afford holders of the New Bonds special protection
in the event of a highly leveraged transaction.
BOOK-ENTRY SYSTEM
The Depository Trust Company
The Depository Trust Company, New York, New York ("DTC"), will act as
securities depositary for the Book-Entry Bonds. The Book-Entry Bonds will be
issued as a fully-registered security in the name of Cede & Co., DTC's
partnership nominee. One fully-registered global certificate of the Book-Entry
Bonds will be issued in principal amount equal to the aggregate principal
amount for each series of the Book-Entry Bonds of like tenor and having the
same date of issue and maturity, and will be deposited with 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 Securities Exchange
Act of 1934, as amended. DTC holds securities that its participants (the
"Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("Direct Participants"). DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.
4
<PAGE>
Ownership of Bonds
Purchases of the Book-Entry Bonds under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Book-Entry
Bonds on DTC's records. The ownership interest of each actual purchaser of each
Book-Entry Bond ("Beneficial Owner") is in turn to be recorded on the
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
Book-Entry Bonds are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in the Book-Entry
Bonds, except in the event that the use of the system for the Book-Entry Bonds
is discontinued under the circumstances described below under "Discontinuance
of Book-Entry Only System."
To facilitate subsequent transfers, all Book-Entry Bonds deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Book-Entry Bonds with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Book-Entry Bonds; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Book-Entry Bonds are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect form time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to securities.
Under its usual procedures, DTC mails an omnibus proxy to the Company as soon
as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
securities are credited on the record date (identified in a listing attached to
the omnibus proxy).
So long as a nominee of DTC is the registered owner of the Book-Entry Bonds,
references herein to the Bondholders or the holders or owners of the Book-Entry
Bonds shall mean DTC and shall not mean the Beneficial Owners of the Book-Entry
Bonds. The Company and the Trustee will recognize DTC or its nominee as the
holder of all of the Book-Entry Bonds for all purposes, including the payment
of the principal or Redemption Price of and interest on the Book-Entry Bonds,
as well as the giving of notices and any consent or direction required or
permitted to be given to or on behalf of the Bondholders under the Indenture.
Neither the Company nor the Trustee will have any responsibility or obligation
to Participants or Beneficial Owners with respect to payments or notices to
Participants or Beneficial Owners.
Payments on and Redemption of Bonds
So long as New Bonds are held by DTC under a book-entry system, principal and
interest payments on the Book-Entry Bonds will be made to DTC. DTC's practice
is to credit Direct Participant's accounts on the date on which such principal
or interest is payable 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 and interest to DTC is
the responsibility of 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 Participants.
5
<PAGE>
So long as New Bonds are held by DTC under a book-entry system, the Trustee
will send any notice of redemption with respect to the Book-Entry Bonds only to
Cede & Co. Any failure of DTC to advise any Direct Participant, or of any
Direct Participant to notify any Indirect Participant or any Beneficial Owner,
of any such notice and its content or effect will not affect the validity of
the proceedings for the redemption of the Book-Entry Bonds. If fewer than all
of the Book-Entry Bonds are selected for redemption, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant to be
redeemed. Any such selection of Direct Participants to which any such partial
redemption will be credited will not be governed by the Mortgage and will not
be made by the Company or the Trustee.
The Company and the Trustee cannot give any assurances that DTC or the
Participants will distribute payments of the principal or Redemption Price of
and interest on the Book-Entry Bonds paid to DTC or its nominee, as the
registered owner of the Book-Entry Bonds, or any redemption or other notices,
to the Beneficial Owners or that they will do so on a timely basis or that DTC
will serve and act in the manner described in this Prospectus.
DTC may charge the Participants a sum sufficient to cover any tax, fee or
other governmental charge that may be imposed for every transfer and exchange
of a beneficial interest in the Book-Entry Bonds, and the Participants may seek
reimbursements therefor from the Beneficial Owners.
Discontinuance of Book-Entry Only System
If DTC is at any time unwilling or unable to continue as Depositary and a
successor Depositary is not appointed by the Company within 90 days, the
Company will issue Definitive Bonds in exchange for the Book-Entry Bonds
represented by such fully-registered global certificate. In addition, the
Company may at any time and in its sole discretion determine not to use DTC's
book-entry system, and, in such event, will issue Definitive Bonds in exchange
for the Book-Entry Bonds represented by such fully-registered global
certificate.
OPTIONAL REDEMPTION PROVISIONS
The Prospectus Supplement for each series of New Bonds will indicate if such
series is subject to redemption at the option of the Company prior to maturity.
If so, the Prospectus Supplement will include the terms of such redemption,
which will be made upon thirty days' notice and in the manner provided in the
Mortgage. The provisions of this paragraph do not apply to redemptions pursuant
to operation of the sinking fund described below.
(For applicable provisions of the Mortgage, see original indenture, Article
X, Section 2; supplemental indenture dated as of December 1, 1936, paragraph 4;
supplemental indenture dated as of April 15, 1966, paragraph 3; and
supplemental indenture relating to such series of New Bonds, paragraph 2.)
SINKING FUND PROVISIONS
The Prospectus Supplement for each series of New Bonds will indicate if such
Bonds are to be redeemable for the Sinking Fund, and if so, the date (if any)
prior to which no such redemption can be made and the applicable sinking fund
redemption price.
The Mortgage requires that (1) the Company create a Sinking Fund by payment
to the Trustee annually on August 1 a sum equal to 1% of the largest amount of
all first refunding mortgage bonds outstanding under the Mortgage ("Bonds") at
any time during the preceding twelve months, and (2) the Trustee apply these
payments to purchase Bonds (except for Bonds which have provisions excluding
them from being purchased for the Sinking Fund) at the lowest obtainable
prices. The Trustee may purchase Bonds for the Sinking Fund in the open market
or through responses to invitations for sealed proposals, including from the
Company, if such purchases are possible at or below the applicable redemption
price. If not, the Trustee will acquire Bonds for the Sinking Fund directly
through the redemption provisions to which Bonds are subject.
6
<PAGE>
The lowest obtainable price cannot exceed the specified sinking fund
redemption price or, if none, the applicable regular redemption price. In
determining the lowest prices obtainable in the purchase of Bonds for the
Sinking Fund and in selecting Bonds for redemption through the Sinking Fund,
the Trustee may take into consideration the interest rates, dates of maturity,
resultant yields to maturity and any other characteristics deemed relevant by
the Trustee. Accordingly, Bonds, including New Bonds, subject to retirement by
operation of the Sinking Fund may or may not, in fact, be so retired. The
Company is also required to pay to the Trustee accrued interest on Bonds so
purchased or redeemed to the dates of purchase or redemption. All Bonds so
acquired are to be cancelled and no Bonds are to be issued under the Mortgage
in place of them.
(For applicable provisions of the Mortgage, see original indenture, Article
X, Section 3; supplemental indenture dated as of December 1, 1920, paragraph 6;
supplemental indenture dated as of April 1, 1946, paragraph 4; supplemental
indenture dated as of July 15, 1964, paragraph 4; and the supplemental
indenture relating to such series of New Bonds, paragraph 2.)
SECURITY
The New Bonds will be secured, equally and ratably with all other Bonds
outstanding at any time under the Mortgage, (A) by a valid and direct first
lien on all of the principal properties and franchises now owned or hereafter
acquired by the Company subject (i) in the case of Pennsylvania real property,
to a prior lien for Pennsylvania local real property taxes for the current
year, which are not overdue, and (ii) to minor and unimportant encumbrances
which do not materially interfere with the use of the properties by the
Company; and (B) by a pledge of 100,000 shares of Class A stock and 100,000
shares of Class B stock of Safe Harbor Water Power Corporation and the common
stock of other directly owned subsidiaries of the Company (but not stock of
second level subsidiaries, i.e. subsidiaries of subsidiaries). With respect to
substantially all of the personal property and fixtures owned by the Company,
the lien of the Mortgage has been perfected as a security interest under the
Maryland and Pennsylvania Uniform Commercial Codes.
The Mortgage contains an after-acquired property clause. The lien upon after-
acquired property (other than property in Pennsylvania and improvements to
property now owned) may not become fully effective until such property is
conveyed or delivered to the Trustee. It is the Company's practice when
acquiring fee simple property in Maryland (not subject to a purchase money
mortgage) to have the conveyance made to itself and the Trustee, and as to all
other property, except securities and certain personal property, to record
deeds or supplemental indentures from time to time conveying record title to
such property to the Trustee. Securities acquired by the Company (except
temporary investments intended to be reconverted into cash) are deposited with
the Trustee with instruments of transfer in blank upon acquisition.
So long as the Company is entitled or permitted to retain possession of the
mortgaged property, the lien of the Mortgage ordinarily is not effective upon
merchandise or other property acquired or produced for sale in the ordinary
course of business, upon cash (other than cash deposited with the Trustee
pursuant to certain provisions of the Mortgage) or securities not transferred
or delivered to the Trustee, or upon income.
(For applicable provisions of the Mortgage, see original indenture, granting
clauses; Article III, Section 2; Article IV, Section 1; and Article X, Section
1.)
ISSUE OF ADDITIONAL BONDS
Subject to limitations imposed by any applicable law or any supplemental
indenture with respect to any existing series, additional Bonds may be issued
under the Mortgage as Bonds of any existing series or a new series, in a
principal amount equal to: (a) the amount of cash deposited with the Trustee
for such purpose (which may thereafter be withdrawn upon the same basis upon
which additional Bonds may be issued); (b) 80% of the amount of actual
expenditures for Additional Property as defined in the Mortgage (not in excess
of the reasonable value of such property), including to a specified extent
securities of subsidiaries, made within
7
<PAGE>
three years prior to the request for issuance of such Bonds (and also in the
case of Additional Property subject to Prior Charges as so defined, additional
Bonds may be issued in an amount obtained by deducting the amount of Prior
Charges from 80% of the sum of such expenditures and such Prior Charges); (c)
the principal or par amounts of Prior Charges acquired, paid or refunded; and
(d) the principal amount of Bonds previously authenticated under the Mortgage
and paid or retired (except by operation of the Sinking Fund). At December 31,
1993, approximately $641,892,000 principal amount of Bonds was issuable under
clause (b) above, and approximately $414,677,000 principal amount of Bonds was
issuable under clause (d) above.
(For applicable provisions of the Mortgage, see original indenture, Article
I, Sections 3, 5, 6, 7, 8 and 9; supplemental indenture dated as of December 1,
1920, paragraph 4; supplemental indenture dated as of December 1, 1936,
paragraph 3; supplemental indenture dated as of June 15, 1938, paragraph 3; and
supplemental indenture dated as of December 19, 1949, paragraph 2.)
EVENTS OF DEFAULT
The Mortgage provides that the following constitute "events of default:" (a)
default for 60 days in payment of any interest on any Bonds; (b) default in
payment of the principal of any Bonds; (c) default in observance or performance
of any other covenant or condition by the Company, and continuance of such
default for a period of 60 days after written notice thereof to the Company; or
(d) an order for appointment of a receiver of the Company, or of all or any
part of the mortgaged property which, in the opinion of the Trustee, is
prejudicial to the security of the Bonds or to the interests of the holders of
the Bonds, or for the winding up or liquidation of the business and affairs of
the Company, or adjudicating the Company a bankrupt, or corporate action taken
on the part of the Company for any of the foregoing.
The Trustee must give the holders of the Bonds notice of all defaults known
to it within 90 days after the occurrence thereof (disregarding any period of
grace), unless such defaults shall have been cured, but no such notice shall be
given until at least 60 days after the occurrence of a default described in (a)
or (c) above; provided that, except in the case of default in the payment of
the principal of or interest on the Bonds, or in the payment of any sinking
fund installment, the Trustee may withhold such notice so long as it determines
that the withholding of such notice is in the interests of the holders of the
Bonds.
(For applicable provisions of the Mortgage, see original indenture, Article
V, Section 2 and supplemental indenture dated as of January 1, 1941, Article
XIII, Section 5.)
ENFORCEMENT
Upon the written request of the holders of not less than a majority in
principal amount of the Bonds at the time outstanding, in case of any "event of
default," as defined in the Mortgage (see above), it is the duty of the
Trustee, upon being offered satisfactory security and indemnity against costs,
expenses and liability, to take all needful steps for the protection and
enforcement of its rights and the rights of the holders of Bonds and to
exercise the powers of entry or sale conferred by the Mortgage, or to take
appropriate judicial proceedings by action, suit or otherwise, as the Trustee
shall deem most expedient in the interest of the holders of such Bonds. In case
of a sale of the mortgaged property, whether under the power of sale or
pursuant to judicial proceedings, the principal of all Bonds shall, if not
previously due, immediately become due and payable.
The holders of sixty-five percent in principal amount of the Bonds
outstanding have the right to direct and to control any proceedings for any
sale of the mortgaged property, or for the foreclosure of the Mortgage, or for
the appointment of a receiver, or any other proceedings under the Mortgage;
provided, however, that the Trustee shall have the right to refuse to comply
with any direction or order of holders of the Bonds under this provision if in
its judgement compliance therewith would be unjustly prejudicial to non-
assenting holders.
(For applicable provisions of the Mortgage, see original indenture, Article
V, Sections 4, 5 and 6; and supplemental indenture dated April 1, 1946,
paragraphs 10 and 11.)
8
<PAGE>
THE TRUSTEE
The Trustee is the registrar and paying agent under the Mortgage and will
serve as calculation agent for Bonds with floating rates. Bankers Trust Company
also serves as authenticating agent and registrar and paying agent for other
securities of the Company and as Trustee for the Company's Employee Savings
Plan. In addition, subsidiaries of the Company maintain normal banking
relationships and have no outstanding loans, as of January 31, 1994, with
Bankers Trust Company.
Annually, the Company is required to furnish the Trustee with a certificate
regarding its compliance with certain covenants of the Mortgage and an opinion
of counsel regarding the recording and filing of the Mortgage and of each
supplemental indenture.
(For applicable provisions of the Mortgage, see supplemental indenture dated
as of January 1, 1941, Article XII, Sections 1 and 9.)
PLAN OF DISTRIBUTION
The Company may sell any series of the New Bonds in any of the following
ways: (i) through underwriters or dealers; (ii) directly to a limited number of
purchasers or to a single purchaser; or (iii) through agents. The Prospectus
Supplement with respect to the series of New Bonds being offered thereby will
set forth the terms of the offering of such New Bonds, including the name or
names of any underwriters, the purchase price of such New Bonds and the
proceeds to the Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
and any securities exchanges on which such New Bonds may be listed. Only
underwriters named in a Prospectus Supplement are deemed to be underwriters in
connection with the New Bonds offered thereby.
If underwriters are used in the sale of a series of New Bonds, such Bonds
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The New Bonds may be either offered to the public through
underwriting syndicates (any such syndicate may be represented by managing
underwriters which may be designated by the Company), or directly by one or
more underwriters acting alone. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the New Bonds of
the series offered thereby will be subject to certain conditions precedent, and
the underwriters will be obligated to purchase all such New Bonds if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
New Bonds may be sold directly by the Company or through agents designated by
the Company from time to time. The Prospectus Supplement with respect to any
series of New Bonds sold in this manner will set forth the name of any agent
involved in the offer or sale of such series of New Bonds as well as any
commissions payable by the Company to such agent. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If dealers are utilized in the sale of any series of New Bonds, the Company
will sell such New Bonds to the dealers, as principal. Any dealer may then
resell such New Bonds to the public at varying prices to be determined by such
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the Prospectus Supplement with respect to such
New Bonds being offered thereby.
It has not been determined whether any series of the New Bonds will be listed
on a securities exchange. Underwriters will not be obligated to make a market
in any series of New Bonds. The Company can not predict the activity of trading
in, or liquidity of, any series of the New Bonds.
9
<PAGE>
Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments which the agents, underwriters or dealers
may be required to make in respect thereof. Agents, underwriters and dealers
may be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
LEGAL OPINIONS
Certain legal matters in connection with the New Bonds will be passed upon
for the Company by David A. Brune, Esq., General Counsel of the Company, or
Susan Wolf, Esq., Associate General Counsel of the Company, and for the
underwriters by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, N.Y. Cahill Gordon & Reindel will not pass upon the
incorporation of the Company, titles to properties of the Company or the lien
of the Mortgage. Cahill Gordon & Reindel will rely upon the opinion of Mr.
Brune or Miss Wolf as to matters of Maryland law and applicability of the
Public Utility Holding Company Act of 1935.
EXPERTS
The consolidated balance sheets and statements of capitalization as of
December 31, 1992 and 1991 and the consolidated statements of income, cash
flows, common shareholders' equity and taxes for each of the three years in the
period ended December 31, 1992, and the consolidated financial statement
schedules listed in Item 14(a)(1) and (2) of the 1992 Form 10-K incorporated by
reference in this Prospectus from the 1992 Form 10-K have been incorporated
herein in reliance on the report of Coopers & Lybrand, independent accountants,
given on the authority of that firm as experts in accounting and auditing. Such
report includes explanatory paragraphs related to the recoverability of
replacement energy costs and changes in accounting methods.
10
<PAGE>
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NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS INCLUDING ANY PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRE-
SENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
ANY UNDERWRITER, DEALER, OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OF-
FER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THESE SECURITIES IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................................ S-2
Certain Terms of Offered Bonds............................................. S-2
Underwriting............................................................... S-3
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 3
Use of Proceeds............................................................. 3
Ratio of Earnings to Fixed Charges.......................................... 3
Description of New Bonds.................................................... 3
Plan of Distribution........................................................ 9
Legal Opinions.............................................................. 10
Experts..................................................................... 10
</TABLE>
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$125,000,000
[LOGO OF BALTIMORE GAS AND ELECTRIC APPEARS HERE]
FLOATING RATE SERIES DUE APRIL 15, 1999
FIRST REFUNDING MORTGAGE BONDS
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PROSPECTUS SUPPLEMENT MARCH 14, 1994
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LEHMAN BROTHERS
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