62770 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices

1See LG&E Energy Corp., Holding Co. Act Release

No. 26886 (Apr. 30, 1998).

For the Nuclear Regulatory Commission.

Clare Kasputys,

Deputy Director, Program Management,

Policy Development & Analysis Staff, Office

of Nuclear Regulatory Research.

[FR Doc. 00–26884 Filed 10–18–00; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–27247]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

October 12, 2000.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendment(s) is/are available for

public inspection through the

Commission’s Branch of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

November 6, 2000, to the Secretary,

Securities and Exchange Commission,

Washington, DC 20549–0609, and serve

a copy on the relevant applicant(s) and/

or declarant(s) at the address(es)

specified below. Proof of service (by

affidavit or, in the case of an attorney at

law, by certificate) should be filed with

the request. Any request for hearing

should identify specifically the issues of

facts or law that are disputed. A person

who so requests will be notified of any

hearing, if ordered, and will receive a

copy of any notice or order issued in the

matter. After November 6, 2000, the

application(s) and/or declaration(s), as

filed or as amended, may be granted

and/or permitted to become effective.

PowerGen US Holdings Limited, et al.,

(70–0763)

PowerGen US Holdings Limited (‘‘US

Holdings’’) and PowerGen UK plc

(‘‘PGUK’’ and together, ‘‘Applicants’’),

both subsidiaries of PowerGen plc

(‘‘PowerGen’’), a public limited

company organized under the laws of

England and Wales, all located at 53

New Broad Street, London EC2M 1SL,

United Kingdom, have filed a

declaration under sections 6(a), 7 and

12(b) of the Act and rules 45 and 54

under the Act.

In a separate application-declaration

in file number 70–9761 (‘‘9671

Application’’), PowerGen proposed to

acquire LG&E Energy Corp. (‘‘LG&E

Energy’’), a utility holding company

exempt by order 1 under section 3(a)

from all provisions of the Act, except

section 9(a), and all of LG&E Energy’s

subsidiaries (together ‘‘LG&E Energy

Group’’) (‘‘Merger’’). In the 9671

Application, PowerGen has stated that

intermediate companies will be used in

the chain of ownership of the LG&E

Energy Group (‘‘Intermediate

Companies’’), including US Holdings,

primarily for the purpose of creating an

economically efficient and viable

structure for the Merger and the ongoing

operations of PowerGen and the LG&E

Energy Group. Following consummation

of the Merger, PowerGen and each of the

Intermediate Companies intend to

register under section 5 of the Act as

public utility holding companies.

PowerGen presently intends to

finance the acquisition of the LG&E

Energy Group from, among other things,

borrowings under a fully committed

bank facility that PowerGen and US

Holdings established on February 27,

2000 (‘‘Credit Facility’’). The credit

Facility provides for up to $4 billion in

borrowings by PowerGen, US Holdings

and other wholly owned subsidiaries of

US Holdings as approved in writing by

the banks. Applicants intend for US

Holdings to be the only borrower under

the Credit Facility, with a guarantee

from PowerGen. The Credit Facility was

established both to fund the acquisition

and, if necessary, to provide funding

and accommodate working capital

needs of the Intermediate Companies

and the LG&E Energy Group.

Applicants state that PowerGen

intends to reduce indebtedness under

the Credit Facility by, among other

things, application of available cash or

the proceeds of asset sales by PGUK and

its subsidiaries, or by the issuance of

debt securities or other instruments by

PowerGen or its subsidiaries prior to, at

or after the Merger. The Credit Facility

agreement generally requires that at

least 50% of the proceeds from those

sales in excess of $100 million be

applied to repay amounts owing under

the Credit Facility.

Applicants state that, due to a United

Kingdom law restricting dividend

payments, the use of loans from PGUK

to US Holdings is the most efficient and

fastest way to move excess funds from

PGUK to US Holdings. Accordingly,

Applicants propose for PGUK, or an

intermediate parent company of PGUK

that PowerGen intends to establish over

PGUK, PowerGen Group Holdings (‘‘UK

Holdings’’), to lend to US Holdings the

net proceeds of asset disposals and

other excess capital at PGUK. US

Holdings will use the loans to repay

amounts owed under the Credit Facility

or, to the extent permitted by the Credit

Facility, for other corporate purposes.

Loans by PGUK, or UK Holdings, to

US Holdings will be either (a) interest

free, in the case of loans of funds

consisting of the proceeds of asset sales

or (b) equal to the lender’s cost of

capital, if the funds lent to US Holdings

were obtained from borrowings from a

third-party. In addition, the loans to US

Holdings will mature in 50 years and

will have no amortization obligations.

Applicants state that to the extent that

the funds from the loans are used to pay

down the amounts owing under the

Credit Facility, the amount of these

funds will not count towards the longterm debt financing limitation proposed

in the 9671 Application. If loan

proceeds are not used to pay down the

amounts owing under the Credit

Facility, the amount of these proceeds

will count towards the long-term debt

limitation.

For the Commission by the Division of

Investment Management, under delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–26799 Filed 10–18–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

24687; 812–12158]

American Water Capital Corp.; Notice

of Application

October 12, 2000.

AGENCY: Securities and Exchange

Commission (‘‘SEC or Commission’’).

ACTION: Notice of an application under

section 6(c) of the Investment Company

Act of 1940 (the ‘‘Act’’) granting an

exemption from all provisions of the

Act.

SUMMARY OF THE APPLICATION: Applicant

seeks an order exempting it from all

provisions of the Act in connection with

the offer and sale of applicant’s

securities to raise funds for the business

operations of its parent and certain

subsidiaries thereof.

Filing Dates: The application was

filed on June 30, 2000 and amended on

October 5, 2000.

Hearing or Notification of Hearing: An

order granting the application will be

Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices 62771

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicant with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

November 6, 2000, and should be

accompanied by proof of service on

applicant, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESS: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549–

0609. Applicant, 1025 Laurel Oak Road,

Voorhees, NJ 08043.

FOR FURTHER INFORMATION CONTACT:

Marilyn Mann, Senior Counsel, at (202)

942–0582, or Nadya B. Roytblat,

Assistant Director, at (202) 942–0564,

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 Fifth

Street, NW., Washington, DC 20549–

0102 (tel. 202–942–8090).

Applicant’s Representations

1. Applicant is a Delaware

corporation and a wholly-owned

finance subsidiary of American Water

Works Company, Inc. (‘‘AWW’’). AWW,

a Delaware corporation, is a public

utility holding company exempt from

the Public Utility Holding Company Act

of 1940. The core business of AWW is

the ownership of common stock of

utility companies providing water

service. AWW’s 25 utility subsidiaries

provide water and/or wastewater service

to approximately nine million people in

22 states. With the exception of the

Michigan-American Water Company,

the utility companies function under

economic regulations prescribed by

state regulatory commissions. In

addition to its regulated utility

subsidiaries, some subsidiaries of AWW

engage in non-regulated businesses.

However, only AWW, the regulated

utility subsidiaries and entities whollycontrolled by these regulated utility

subsidiaries borrow from Applicant.

The term ‘‘Subsidiaries’’ as used in the

application means the water and

wastewater utility subsidiaries and

entities wholly-owned directly or

indirectly by such utilities.

2. Applicant’s primary function will

be to lend funds to AWW and its

Subsidiaries and provide cash

management through cash sweeps and

management of excess cash. Applicant

will obtain its funds primarily by

borrowing from two sources: (i) it will

arrange for a syndicated bank credit line

to provide short-term loans with a

maturity of one year or less; and (ii) it

will register its own debt securities for

sale to the public by filing a shelf

registration of these securities with the

Commission. Applicant is also

considering instituting a commercial

paper program in combination with the

syndicated bank credit line. Applicant

will invest in or lend at least 85% of the

cash or cash equivalents raised by it

through offerings of debt securities to

AWW and the Subsidiaries as soon as

practicable, and in no event later than

six months, after its receipt of such cash

or cash equivalents.

3. Applicant will comply with all of

the provisions of rule 3a–5 under the

Act, discussed below, except that AWW

will not directly guarantee the debt

securities issued by Applicant. Instead

of an unconditional guarantee, AWW

will use a support agreement (‘‘Support

Agreement’’) that will be the functional

equivalent of an unconditional

guarantee.

4. Because applicant’s securities are

not beneficially owned by more than

100 persons and applicant is not making

and does not propose to make a public

offering of its securities, applicant is not

an ‘‘investment company’’ by virtue of

the exemption contained in section

3(c)(1) of the Act. Applicant is applying

for an exemption because it may in the

future engage in a public offering or an

offering exempt from the registration

requirements of the Securities Act of

1933 (‘‘1933 Act’’) which may result in

applicant’s securities being beneficially

held by more than 100 persons.

Applicant, therefore, requests an order

under section 6(c) of the Act exempting

it from all provisions of the Act.

Applicant’s Legal Analysis

1. Section 6(c) of the Act permits the

Commission to grant an exemption from

the provisions of the Act if, and to the

extent that, such exemption is necessary

and appropriate in the public interest,

consistent with the protection of

investors, and consistent with the

purposes fairly intended by the policy

and provisions of the Act.

2. Rule 3a–5 under the Act provides

an exemption from the definition of an

investment company for certain

companies organized primarily to

finance the business operations of their

parent companies or companies

controlled by their parent companies.

Rule 3a–5 requires, among other things,

that any debt securities issued to the

public be unconditionally guaranteed by

the parent company as to the payment

of principal, interest, and premium.

Applicant states that it meets all the

requirements of rule 3a–5 except that

AWW will not directly guarantee the

debt securities issued by Applicant.

3. Applicant states that a state’s

public utility commission usually

determines a Subsidiary’s return on

capital by considering the capital

structure of the Subsidiary without

regard to the capital structure of AWW.

AWW has avoided interdependent

financial relationships such as loans

and guarantees that tend to make

interdependent the capital structure of

AWW and the Subsidiaries in order to

maintain a capital structure that is

consistent with this regulatory

approach. Applicant states that AWW

determined to enter into the Support

Agreement in lieu of an unconditional

guarantee in order to maintain this

separation in capital structure between

it and its Subsidiaries. Applicant

believes that the Support Agreement

provides a functional equivalent of an

unconditional guarantee of Applicant’s

securities because it grants holders of

Applicant’s securities the right to

proceed directly against AWW in the

event Applicant fails to pay when due

principal, interest, and premium, if any,

owed by it on such securities.

Applicant’s Conditions

Applicant agrees that any order

granting the requested relief will be

subject to the following conditions:

1. Applicant will meet all of the

requirements of rule 3a–5 except for the

unconditional guarantee requirement. In

lieu of an unconditional guarantee,

Applicant has entered into, and will

keep in force (except as contemplated

below), the Support Agreement, which

is and shall continue to be the

functional equivalent of an

unconditional guarantee. The Support

Agreement provides, and will continue

to provide, as follows:

a. AWW owns and shall continue to

own all of the outstanding voting stock

of Applicant;

b. AWW will provide to Applicant

funds (as capital, or if AWW and

Applicant agree, as a subordinated loan)

as required if Applicant is unable to

make timely payment of interest,

principal or premium, if any, on any

debt issued by Applicant;

c. AWW will cause Applicant to have

at all times a positive tangible net worth

(net assets less intangible assets, if any),

as determined in accordance with

62772 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Notices

generally accepted accounting

principles; and

d. If Applicant fails or refuses to take

timely action to enforce its rights under

the Support Agreement or if Applicant

defaults in the timely payment of

interest, principal or premium, any

lender may proceed directly against

AWW to enforce Applicant’s rights

under the Support Agreement or to

obtain payment of such defaulted

interest, principal or premium.

2. The Support Agreement may be

modified or amended in a manner that

adversely affects the rights of creditors

of Applicant only if such modification

or amendment occurs after all debt

securities theretofore issued by

Applicant are irrevocably paid in full

and all commitments to acquire

Applicant’s debt securities are

terminated, unless all creditors consent

in advance and in writing to such

modification or amendment. No

modification of or amendment to the

Support Agreement relating to the four

provisions set forth in condition 1,

above, (other than to increase the

required level of Applicant’s positive

tangible net worth) shall be made

unless: (i) All creditors consent in

advance and in writing to such

modification or amendment and (ii)

Applicant applies to the Commission for

an amended order relating to such

modification or amendment, and the

Commission grants such amended

order. The Support Agreement may be

terminated only after (1) all debt

securities issued by Applicant are

irrevocably paid in full and all

commitments to acquire Applicant’s

debt securities are terminated and (2)

Applicant applies to the Commission for

an amended order relating to such

termination, and the Commission grants

such amended order.

3. If Applicant initiates a non-public

or public offering of securities, it will

consist of short-term, intermediate-term

or long-term debt securities to be offered

and sold either in transactions exempt

from the registration requirements of the

1933 Act or in public offerings of

securities registered under the 1933 Act.

No future public offering will involve

voting securities of Applicant.

4. In the case of an offering of debt

securities not requiring registration

under the 1933 Act, Applicant will

provide each offeree with disclosure

materials that will include a description

of the business of AWW and its

subsidiaries and other data of the

character customarily supplied in such

offerings, or will otherwise comply with

the disclosure requirements of

Regulation D under the 1933 Act. In the

event of a subsequent offering, these

materials will be updated at the time

thereof (by supplementing the

disclosure materials or by incorporating

by reference filings under the Securities

Exchange Act of 1934) to reflect material

changes in the financial condition of

AWW and its subsidiaries, taken as a

whole.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–26798 Filed 10–18–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–24686; 812–12178]

The Latin American Investment Fund,

Inc., et al.; Notice of Application

October 12, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of application under

section 17(b) of the Investment

Company Act of 1940 (the ‘‘Act’’) for an

exemption from section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit the Latin

America Equity Fund, Inc. (‘‘LAQ’’) to

merge into the Latin America

Investment Fund, Inc. (‘‘LAM’’).

Because of certain affiliations,

applicants may not rely on rule 17a–8

under the Act.

Applicants: LAM, LAQ, and Credit

Suisse Asset Management, LLC

(‘‘CSAM’’).

Filing Dates: The application was

filed on July 17, 2000 and amended on

August 14, 2000 and October 12, 2000.

Hearing or Notification of Hearing: An

order granting the requested relief will

be issued unless the Commission orders

a hearing. Interested persons may

request a hearing by writing to the

Commission’s Secretary and serving

applicants with a copy of the request,

personally or by mail. Hearing requests

should be received by the Commission

by 5:30 p.m. on November 2, 2000 and

should be accompanied by proof of

service on applicants, in the form of an

affidavit or, for lawyers, a certificate of

service. Hearing requests should state

the nature of the writer’s interest, the

reason for the request, and the issues

contested. Persons who wish to be

notified of a hearing may request

notification by writing to the

Commission’s Secretary.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street,

NW., Washington, DC 20549–0609.

Applicants, 466 Lexington Avenue, New

York, New York, 10017.

FOR FURTHER INFORMATION CONTACT: Julia

Kim Gilmer, Senior Counsel, at (202)

942–0528, or Michael W. Mundt,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the

Commission’s Public Reference Branch,

450 Fifth Street, NW, Washington, DC

20549–0102 (tel. 202–942–8090).

Applicants’ Representations

1. LAM and LAQ (each, a ‘‘Fund,’’

and collectively, the ‘‘Funds’’) are

Maryland corporations registered under

the Act as closed-end management

investment companies. CSAM, an

indirect wholly-owned subsidiary of

Credit Suisse Group, is registered as an

investment adviser under the

Investment Advisers Act of 1940 and

serves as investment adviser to the

Funds. As of June 7, 2000, the President

and Fellows of Harvard College

(‘‘Harvard’’) owned more than 5% of the

outstanding voting securities of each of

the Funds.

2. On July 24, 2000, the Board of

Directors of both Funds, including the

directors who are not ‘‘interested

persons,’’ as defined in section 2(a)(19)

of the Act (‘‘Disinterested Directors’’),

unanimously approved a Merger

Agreement and Plan of Reorganization

(the ‘‘Plan’’) between the Funds. Under

the Plan, LAQ will merge into LAM, and

LAM will succeed to all of the assets

and liabilities of LAQ by operation of

Maryland state law (the ‘‘Merger’’). Each

share of common stock of LAQ will be

converted into an equivalent dollar

amount of full shares of common stock

of LAM, based on the net asset value per

share of each Fund calculated at 4:00

p.m. on the business day preceding the

effective date of the Merger. LAM will

purchase any interests that would result

in fractional shares at the proportionate

amount of the current net asset value of

the shares and remit the cash proceeds

to former LAQ shareholders. The value

of the assets of the Funds will be

determined in accordance with the

valuation procedures set forth in LAM’s

registration statement, which are the

same as LAQ’s valuation procedures.

Applicants state that the application of

LAM’s valuation procedures to LAQ’s

assets and liabilities was approved by

the Board of Directors of each Fund and

will not result in any difference in the