[Federal Register Volume 65, Number 230 (Wednesday, November 29, 2000)]
[Notices]
[Pages 71144-71148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27280]


Filings Under the Public Utility Holding Company Act of 1935, as 
amended (``Act'')

November 21, 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 December 18, 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

[[Page 71145]]

copy of any notice or order issued in the matter. After December 18, 
2000, the application(s) and/or declaration(s), as filed or as amended, 
may be granted and/or permitted to become effective.

Entergy Gulf States, Inc. (70-9751)

    Entergy Gulf States, Inc. (``EGS''), 350 Pine Street, Beaumont, 
Texas 77701, an electric utility subsidiary company of Entergy 
Corporation (``Entergy''), 639 Loyola Avenue, New Orleans, LA 70113, a 
public utility holding company registered under the Act, has filed an 
application-declaration under sections 6(a), 7, 9(a), 10 and 12(d) of 
the Act and rules 44 and 53 under the Act.
    In summary, EGS requests authority to issue a variety of 
securities, to form certain special purpose entities (``SPEs'') for the 
sole purpose of issuing one or more series of preferred securities 
(``SPE Securities'') and to enter into agreements with governmental 
entities to facilitate certain financings.
    Specifically, EGS proposes, from time to time through December 31, 
2005 (``Authorization Period''), to issue and sell, or to arrange for 
the issuance and sale of, a combination of some or all of the following 
securities in an aggregate principal amount of $2.2 billion (``Debt 
Limit''): (1) one or more series of its first mortgage bonds 
(``Bonds''), (2) one or more series of medium-term notes (``MTNs''), 
(3) one or more series of debentures (``Debentures''), (4) one or more 
new series of EGS' preferred stock (``Preferred Stock''), (5) one or 
more series of EGS' preference stock (``Preference Stock'') or (6) one 
or more series of tax-exempt bonds (``TEBs'') issued by one or more 
governmental entities.
    EGS also requests authority to issue guaranties to secure 
subsidiary SPE obligations under the SPE Securities, and to issue 
subordinated debentures to the SPE in respect of the proceeds of the 
SPE Securities. In addition, EGS requests authority to obtain letters 
of credit and to issue collateral securities to secure the TEBs. 
Further, EGS requests authority to acquire outstanding pollution 
control revenue and/or industrial development bonds issued for its 
benefit.

Bonds, MTNs and Debentures

    One or more series of Bonds, MTNs and/or Debentures may include 
provisions for redemption prior to maturity at various percentages of 
the principal amount thereof and may include restrictions on optional 
redemption for a given number of years. In addition, one or more series 
of Bonds, MTNs or Debentures may include provision for the mandatory 
retirement of some or all of the series prior to maturity, which will 
not exceed fifty years. The price, exclusive of accrued interest, to be 
paid to EGS for each series of Bonds, MTNs and Debentures sold at 
competitive bidding will be within a range (to be specified by EGS to 
prospective purchasers) of 95% to 105% of the principal amount of the 
series. No series of Bonds, MTNs or Debentures, whether fixed rate or 
adjustable, will bear interest at rates in excess of 15% per annum.

Preferred Securities

    SPE Securities issued by an SPE will have a stated per share 
liquidation preference and may be registered under the Securities Act 
of 1933 as amended. The holders of the SPE Securities will be either 
(1) the limited partners (in the case of a limited partnership) or (2) 
the holders of preferred interests (in the case of a business trust) of 
the SPE and the amounts paid by such holders for the SPE will be 
treated as capital contributions to the SPE. The annual distribution or 
interest rate borne by any of the SPE Securities will not exceed 15% 
and the price paid for the SPE Securities will be not less than the par 
or stated value and not more than 105% of that value, plus accumulated 
dividends, if any.
    SPEs issuing SPE Securities will be in the form of statutory 
business trusts or limited partnerships and will be created solely for 
the purpose of issuing one or more series of SPE Securities. EGS will 
directly or indirectly make an equity contribution to the SPE at the 
time the SPE Securities are issued and with this equity contribution, 
directly or indirectly acquire all of the general partnership 
interests, in the case of a partnership, or all of the voting 
interests, in the case of a business trust, in the SPE. If the SPE is a 
limited partnership, EGS may act as the general partner, or 
alternatively, EGS requests authority to organize a special purpose 
corporation for the sole purpose of acting as the general partner of 
the SPE.
    EGS proposes to issue from time to time, in one or more series, 
Subordinated Debentures to the SPE. The SPE will use the proceeds from 
the sale of its SPE Securities, plus the equity contributions made to 
it, to purchase the Subordinated Debentures. EGS will issue the 
Subordinated Debentures in an aggregate principal amount not exceeding 
the aggregate stated amount of the SPE Securities whose sale proceeds, 
along with the capital contributions, were used to purchase the 
Subordinated Debentures.
    Each series of Subordinated Debentures will mature within fifty 
years of issuance and the interest rates; payment dates, redemption, 
maturity and other terms will be substantially identical to the SPE 
Securities' terms and conditions. Indentures for the Subordinated 
Debentures will provide that they are subordinated to senior 
indebtedness, may provide for deferred payment up to sixty months under 
certain circumstances.
    EGS proposes to enter into Guarantees, securing the SPE Securities 
which guarantee the payment of distributions, liquidation payments and 
certain tax related ``gross up'' amounts to SPE Securities holders, if 
and to the extent that the SPE has legally available funds for this 
purpose. Separately, EGS further proposes to issue and sell one or more 
new series of its Preferred Stock of no par or $100 par value, either 
by competitive bidding, negotiated public offering or private placement 
during the Authorization Period. No series of Preferred Stock will be 
sold if the dividend rate thereon would exceed 15% per annum. The terms 
of one or more series of Preferred Stock may include provisions for 
redemption at various redemption prices, may include restrictions on 
optional redemption for a given number of years and may include 
provisions for purchases in lieu of redemption. EGS may include for any 
series of Preferred Stock provisions for a sinking fund designed to 
annually redeem a given percentage of the total number of shares of 
such series.
    Depending upon market conditions at the time of the offering of a 
given series of the Preferred Stock, if EGS determines that Preferred 
Stock having a public offering price of less than $100 per share is 
likely to have a materially better market reception than shares of $100 
Preferred, and it is not deemed appropriate to use no par Preferred 
Stock, EGS may issue and sell a series of $100 Preferred to 
underwriters for deposit with a bank or trust company (``Depositary''). 
The underwriters would then receive from the Depositary and deliver to 
the purchasers, in a subsequent public offering, shares of depositary 
preferred stock (``Depositary Preferred''), each representing a stated 
fraction of a share of the new series of $100 Preferred Stock.

Preference Stock

    EGS proposes to issue one or more series of Preference Stock, with 
the price to be paid being determined at the time of sale. No series of 
Preference Stock will be issued at less than 100% or more than 105% of 
the stated value per share, plus accrued dividends, if any. No series 
of Preference Stock would be sold if the dividend rate

[[Page 71146]]

would exceed 15% per annum. One or more series of Preference may 
include provisions for redemption at various redemption prices and/or 
restrictions on optional redemption for a given number of years of the 
life of the issue. One or more series of Preference Stock may include 
provisions for a sinking fund, which would be designed to redeem 
commencing on a specified date or number of years after the first day 
of the calendar month in which the series is issued, at the stated 
value per share of the series plus any accumulated and unpaid 
dividends, of all or a portion of the total number of shares of the 
series. Any sinking fund provision would be designed to redeem all 
outstanding shares of the series not later than fifty years after the 
date of original issuance.

Tax Exempt Bonds

    Additionally, EGS requests authority to enter into installment 
purchase, refunding or other facilities agreements (``Facilities 
Agreement'') with one or more governmental entities (``Issuers''). As 
part of the agreement the Issuers will issue to the public one or more 
series of tax-exempt bonds (``TEBs'') under one or more trust 
indentures between the Issuer and one or more trustees (``Trustees'') 
in order to facilitate the purchase or construction of certain 
pollution control facilities (``Facilities''). Each series of TEBs will 
have such interest rates, maturity dates, redemption and sinking fund 
provisions and be secured by such means as shall be determined at the 
time of sale. In no event will the TEBs mature earlier than five years 
nor later than fifty years from the date of issuance and no series of 
TEBs will be sold if the fixed interest rate or initial adjustable 
interest rate will exceed 13% per annum. The aggregate amount of the 
TEBs issued will be within the Debt Limit.
    The Facilities Agreement will provide for EGS to commit to 
purchase, acquire, construct, install, operate and/or maintain the 
Facilities for or on behalf of the Issuer. The Issuers will transfer 
the proceeds of the TEB sales to EGS and agree to transfer or make the 
Facilities available to the EGS on terms sufficient to provide for 
payment by the Issuer of the principal or redemption price and interest 
on the TEBs. EGS will then be responsible for paying the indebtedness 
on the TEBs.
    In order to obtain a more favorable rating on any series of TEB, 
and improve their marketability, EGS proposes to issue one or more new 
series of Bonds or MTNs (``Collateral Bonds'') to secure the TEBs. The 
terms of the Collateral Bonds relating to maturity, interest payment 
dates, redemption provisions and acceleration will correspond to the 
terms of the related TEBs.
    The principal amount of and interest rate borne by the Collateral 
Bonds could be determined in several ways: (1) If the series of TEBs 
bear a fixed interest rate, Collateral Bonds can be issued in a 
principal amount equal to the principal amount of the series and bear 
interest at a rate equal to the rate of interest on the series, (2) 
non-interest bearing Collateral Bonds can be issued in a principal 
amount equal to the state interest for a specified period, (3) 
Collateral Bonds can be issued in a principal amount equivalent to the 
principal amount of the series plus an amount equal to the interest on 
the series for a specified period, but carry a fixed interest rate that 
will be lower than the fixed interest rate of the series of TEBs or (4) 
Collateral Bonds can be issued in a principal amount equivalent to the 
principal mount of the series of TEBs at an adjustable rate of 
interest, that varies with the rate of interest on that series of TEBs, 
but having a ``cap'' (not greater than 13%), above which the interest 
on Collateral Bonds cannot rise.
    In order to obtain a more favorable rating on any series of TEBs, 
EGS may also arrange for one or more irrevocable letters of credit for 
an aggregate amount of up to $52 million from one or more banks 
(individually and collectively the ``Bank''). To induce the Bank to 
issue a letter of credit, EGS would enter into one or more 
reimbursement agreements (``Reimbursement Agreements'') with the Bank 
under which EGS will agree to reimburse the Bank for all amounts drawn 
under the letter of credit within a specified period (not to exceed 
sixty months) after the date the funds are drawn and with interest at a 
rate that will not exceed the Bank's prime commercial rate plus 2%. In 
order to secure EGS' obligations under the Facilities Agreement or the 
Reimbursement Agreement, in the event EGS enters into a Reimbursement 
Agreement, EGS may also grant a lien on the Facilities or other assets.

Use of Proceeds

    EGS proposes to use the net proceeds derived from the issuance and 
sale of Bonds, MTNs, Debentures, SPE Securities, Preferred Stock, 
Preference Stock and/or TEBs for general corporate purposes including, 
but not limited to the conduct of its business as an electric and gas 
utility, the repayment of outstanding securities when due and/or the 
possible redemption, acquisition or refunding of certain outstanding 
securities prior to their stated maturity or due date. EGS states that 
no proceeds from the issuance and sale of the above securities will be 
used to invest directly or indirectly in an exempt wholesale generator, 
as defined in section 32 of the Act, or a foreign utility company, as 
defined in section 33 of the Act.

Entergy Mississippi, Inc. (70-9757)

    Entergy Mississippi, Inc. (``EM''), 308 Pearl Street, Jackson, 
Mississippi 39201, an electric utility subsidiary of Entergy 
Corporation (``Entergy''), 639 Loyola Avenue, New Orleans, Louisiana 
70113, a public utility holding company registered under the Act, has 
filed an application-declaration under sections 6(a), 7, 9(a), 10 and 
12(d) of the Act and rules 44 and 53 under the Act.
    EM requests authority to issue a variety of securities, to form 
certain special purpose entities (``SPEs'') for the sole purpose of 
issuing one or more series of preferred securities (``SPE Securities'') 
and to enter into agreements with governmental entities to facilitate 
certain financings.
    Specifically, EM proposes, from time to time through December 31, 
2005 (``Authorization Period''), to issue and sell a combination of one 
or more series of its first mortgage bonds (``Bonds'') and one or more 
series of debentures (``Debentures'') in an aggregate amount of up to 
$540 million (``Debt Limit''). In addition, EM requests authority to 
issue one or more series of EM preferred securities (``Preferred 
Stock'') and/or to cause one or more SPEs to issue SPE Securities, in a 
combined aggregate outstanding principal amount of up to $50 million 
(``Preferred Limit'') through the Authorization Period. EM also 
requests authority, through the Authorization Period, to issue 
subordinated debentures of EM (``Subordinated Debentures'') and 
guarantees of EM (``Guarantees'') in connection with the issuance of 
SPE Securities. Further, Em requests authority through the 
Authorization Period to enter into arrangements for the issuance of up 
to $46 million of tax-exempt bonds (``TEBs'') by one or more 
governmental authorities and of up to $100 million of municipal 
securities (``Municipal Securities'') by one or more state or local 
municipal entities (``Municipal Entity'').

Bonds and Debentures

    Bonds and/or Debentures may include provisions for redemption prior 
to maturity at various percentages of the principal amount of the bonds 
and may include restrictions on optional redemption for a given number 
of years. In addition, Bonds and Debentures may include provisions for 
the mandatory retirement of some or all series prior to

[[Page 71147]]

maturity, which will not exceed fifty years. The price, exclusive of 
accrued interest, to be paid to EM for each series of Bonds and 
Debentures sold at competitive bidding will be within a range (to be 
specified by EM to prospective purchasers) of 95% to 105% of the 
principal amount of the series. No series of Bonds and Debentures, 
whether fixed rate or adjustable rate, will bear interest at rates in 
excess of 15% per annum.

Preferred Securities

    SPE Securities issued by an SPE will have a stated per share 
liquidation preference and may be registered under the Securities Act 
of 1933 as amended. Amounts paid by the holders of equity interests in 
the SPE will be treated as capital contributions to the SPE. The annual 
distribution or interest rate borne by any of the SPE Securities will 
not exceed 15%.
    SPEs issuing SPE Securities will be in the form of statutory 
business trusts or limited partnerships and will be created solely for 
the purpose of issuing one or more series of SPE Securities. EM will 
directly or indirectly make an equity contribution to the SPE at the 
time the SPE Securities are issued and with this equity contribution, 
directly or indirectly acquire all of the general partnership 
interests, in the case of a partnership, or all of the voting 
interests, in the case of a business trust, in the SPE. If the SPE is a 
limited partnership, EM may act as the general partner, or 
alternatively, EM requests authority to organize a special purpose 
corporation for the sole purpose of acting as the general partner of 
the SPE.
    EM will issue, from time to time in one or more series, 
Subordinated Debentures to the SPE. The SPE will use the proceeds from 
the sale of its SPE Securities, plus the equity contributions made to 
it, to purchase the Subordinated Debentures. EM will issue the 
Subordinated Debentures in an aggregate principal amount not to exceed 
the aggregate stated amount of the SPE Securities whose sale proceeds, 
along with the capital contributions, were used to purchase the 
Subordinated Debentures.
    Each series of Subordinated Debentures will mature within fifty 
years of issuance and the interest rates, payment dates, redemption, 
maturity and other terms will be substantially identical to the SPE 
Securities' terms and conditions. Indentures for the Subordinated 
Debentures will provide that the Subordinated Debentures are 
subordinated to senior indebtedness and may provide for deferred 
payment up to sixty months under certain circumstances.
    EM also proposes to enter into Guarantees, which guarantee the 
payment of distributions, liquidation payments and certain tax-related 
``gross up'' amounts to the SPE Securities holders if, and to the 
extent that, the SPE has legally available funds for this purpose.
    EM also proposes to directly issue and sell one of more new series 
of its no par, nominal par or $100 par value Preferred Stock either by 
competitive bidding, negotiated public offering or private placement. 
No series of Preferred Stock will be sold if the dividend rate would 
exceed 15% per annum. The terms of one or more series of Preferred 
Stock may include provisions for redemption at various redemption 
prices, restrictions on optional redemption for a given number of 
years, provisions for purchases in lieu of redemption or provisions for 
a sinking fund designed to annually redeem a given percentage of the 
total number of shares of the series.
    Depending upon market conditions at the time of the offering of a 
given series of the Preferred Stock, if EM determines that Preferred 
Stock having a public offering price of less than $100 per share is 
likely to have a materially better market reception than shares of $100 
Preferred, and it is not deemed appropriate to use no par Preferred 
Stock, EM may issue and sell a series of $100 Preferred to underwriters 
for deposit with a bank or trust company (``Depositary''). The 
underwriters would then receive from the Depositary and deliver to the 
purchasers, in a subsequent public offering, shares of depositary 
preferred stock (``Depository Preferred''), each representing a stated 
fraction of a share of the new series of $100 Preferred Stock.

Tax Exempt Bonds

    EM may enter into installment purchase, refunding or other 
facilities agreements (``Facilities Agreements'') with one or more 
governmental entities (``Issuers''). As part of these agreements, the 
Issuers will issue one or more series of TEBs to the public under one 
or more trust indentures, in order to facilitate the purchase or 
construction of certain pollution control facilities (``Facilities''). 
Each series of TEBs will have interest rates, maturity dates, 
redemption, sinking fund and security provisions as will be determined 
at the time of sale. In no event will the TEBs mature earlier than five 
years nor later than fifty years from the date of issuance and no 
series of TEBs will bear an interest rate that exceeds 13% per annum. 
The aggregate amount of the TEBs issued will not exceed $46 million.
    The Facilities Agreement will provide for EM to commit to purchase, 
acquire, construct, install, operate and/or maintain the Facilities for 
or on behalf of the Issuer. The Issuer will transfer the proceeds of 
the TEB sales to EM and agree to transfer or make the Facilities 
available to EM on terms sufficient to provide for payment by the 
Issuer of the principal or redemption price and interest on the TEBs. 
EM will then be responsible for paying the indebtedness on the TEBs.
    In order to obtain a more favorable rating on any series of TEBs, 
and improve their marketability, EM proposes to issue one or more new 
series of Bonds up to an aggregate amount of $52 million (``Collateral 
Bonds''). The terms of the Collateral Bonds relating to maturity, 
interest payment dates, redemption provisions and acceleration will 
correspond to the terms of the related TEBs.
    The principal amount of and interest rate borne by the Collateral 
Bonds could be determined in several ways: (1) If the series of TEBs 
bears a fixed interest rate, Collateral Bonds can be issued in a 
principal amount equal to the principal amount of the series and bear 
interest at a rate equal to the rate of interest on the series, (2) 
non-interest bearing Collateral bonds can be issued in a principal 
amount equal to the stated interest for a specified period, (3) 
Collateral Bonds can be issued in a principal amount equivalent to the 
principal amount of the series plus an amount equal to the interest on 
the series for a specified period, but carry a fixed interest rate that 
will be lower than the fixed interest rate of the series of TEBs or (4) 
Collateral Bonds can be issued in a principal amount equivalent to the 
principal amount of the series of TEBs at an adjustable rate of 
interest, that varies with the rate of interest on that series of TEBs, 
but having a ``cap'' (not greater than 13%), above which the interest 
on Collateral Bonds cannot rise.
    In order to obtain a more favorable rating on any series of TEBs, 
EM may also arrange for one or more irrevocable letters of credit for 
an aggregate the amount of up to $52 million from one or more banks 
(individually and collectively the ``Bank''). To induce the Bank to 
issue a letter of credit, EM would enter into one or more reimbursement 
agreements (``Reimbursement Agreements'') with the Bank under which EM 
will agree to reimburse the Bank for all amounts drawn under the letter 
of credit within a specified period (not to exceed sixty months) after 
the date the funds are

[[Page 71148]]

drawn and with interest at a rate that will not exceed the Bank's prime 
Commercial rate plus 2%. In order to secure EM's obligations under the 
Facilities Agreement or the Reimbursement Agreement, in the event EM 
enters into a Reimbursement Agreement, EM may also grant a lien on the 
Facilities or other assets.

Municipal Securities

    EM seeks authority to enter into arrangements for the issuance of 
up to $100 million aggregate principal amount of Municipal Securities 
to be issued by a state or local Municipal Entity. Under the 
arrangements, a Municipal Entity will issue securities to the public on 
behalf of EM and will loan money to EM through a bank, an affiliate of 
EM or other person, where the proceeds of the financing will be used to 
pay certain of EM's costs. The Municipal Entity will agree to pay to EM 
an amount equal to the proceeds of the Municipal Securities. Under the 
provisions of an agreement between EM and the Municipal Entity, EM will 
be obligated to make payments sufficient to provide for payment by the 
Municipal Entity of the principal, redemption price of, premium (if 
any), interest on and other amounts owing with respect to the Municipal 
Securities, together with related expenses.
    Each series of Municipal Securities will be sold at a price, 
interest rate and maturity date as will be determined at the time of 
sale, however, no series of Municipal Securities will be sold if the 
fixed interest rate or adjustable interest rate would exceed 15% per 
annum, or if subsequent interest rates for adjustable rate would exceed 
15% per annum. No series of Municipal Securities will mature earlier 
than one year or later than fifty years from the first day of the month 
of issuance.
    In order to obtain a more favorable rating on any series of 
Municipal Securities, and improve their marketability, EM may arrange 
for one or more irrevocable letters of credit for an aggregate amount 
up to $115 million from one or more Banks. Payments with respect to 
principal, premium, if any, interest and purchase obligations in 
connection with the series of Municipal Securities coming due during 
the term of the letter of credit, which will not exceed ten years, will 
be secured by, and payable from funds (if any) drawn under, the letter 
of credit. To induce the Bank to issue a letter of credit, EM would 
enter into one or more reimbursement agreements (``Reimbursement 
Agreements'') with the Bank under which EM will agree to reimburse the 
Bank for all amounts drawn under a letter of credit within a specified 
period (not to exceed sixty months) after the date funds are drawn and 
with interest at a rate that will not exceed the Bank's prime 
commercial lending rate plus 2%. The terms of the Reimbursement 
Agreement will correspond to the terms in the letter of credit.
    Any letter of credit will expire or be terminable prior to the 
maturity date of the series of Municipal Securities that the letter of 
credit supports and, in connection with the expiration or termination, 
the series of Municipal Securities can be made subject to mandatory 
redemption or purchase on or prior to the date of expiration or 
termination of the letter of credit, subject to the rights of owners of 
Municipal Securities not to have their Municipal Securities redeemed or 
purchased. Provision may be made, as to any series of Municipal 
Securities, for extension of the term of a letter of credit or for its 
replacement, upon its expiration or termination, by another letter of 
credit (having substantially the same terms as the original letter of 
credit) from the Bank or another bank. Extended or replacement letters 
of credit will expire not later than the final maturity date of the 
related Municipal Securities
    In order to secure EM's obligations under the agreement with the 
Municipal Entity and/or, in the event EM enters into a Reimbursement 
Agreement, under the Reimbursement Agreement, EM may grant a lien, 
subordinate to the lien on the Bonds, on certain assets of EM (the 
``Municipal Subordinate Lien'').
    In addition or as an alternative to the security provided by a 
letter of credit or the Municipal Subordinate Lien, EM may secure the 
Municipal Securities through the issuance and pledge of one or more new 
series of first mortgage bonds (``Municipal Collateral Bonds''). The 
principal amount of and interest rate borne by the Municipal Collateral 
Bonds could be determined in several ways: (1) If the series of 
Municipal Securities bears a fixed interest rate, Municipal Collateral 
Bonds can be issued in a principal amount equal to the principal amount 
of the series and bear interest at a rate equal to the rate of interest 
on the series, (2) non-interest bearing Municipal Collateral Bonds can 
be issued in a principal amount equivalent to the principal amount of 
the series plus an amount equal to interest thereon for a specified 
period, (3) Municipal Collateral Bonds can be issued in a principal 
amount equivalent to the principal amount of the series plus an amount 
equal to interest on the series for a specified period, but carry a 
fixed interest rate that will be lower than the fixed interest rate of 
the series of Municipal Securities or (4) Municipal Collateral Bonds 
can be issued in a principal amount equivalent to the principal amount 
of the series of Municipal Securities at an adjustable rate of 
interest, varying with the rate of interest borne by the series of 
Municipal Securities but having a ``cap'' (not greater than 15%), above 
which the interest on Municipal Collateral Bonds cannot rise.
    Each series of the Municipal Collateral Bonds that bear interest 
will bear interest at a fixed interest rate or initial adjustable 
interest rate not to exceed 15%. The maximum aggregate principal amount 
of the Municipal Collateral Bonds would be $115 million, which will be 
in addition to the aggregate amount requested for Bonds and/or 
Debentures. The terms of the Municipal Collateral Bonds relating to 
maturity, interest payment dates, if any, redemption provisions and 
acceleration will correspond to the terms of the related Municipal 
Securities. The terms of each series of the Municipal Collateral Bonds 
will not vary during the life of the series except for the interest 
rate of any series that bears interest at an adjustable rate.

Use of Proceeds

    EM proposes to use the net proceeds derived from the issuance and 
sale of Bonds, Debentures, SPE Securities, Preferred Stock and TEBs for 
general corporate purposes including, but not limited to the conduct of 
its business as an electric and gas utility, the repayment of 
outstanding securities when due and/or the possible redemption, 
acquisition or refunding of certain outstanding securities prior to 
their stated maturity or due date. The proceeds from the issuance and 
sale of Bonds, Debentures, SPE Securities, Preferred Stock and TEBs 
will not be used to invest directly or indirectly in an exempt 
wholesale generator, as defined in section 32 of the Act, or a foreign 
utility company, as defined in section 33 of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-30372 Filed 11-28-00; 8:45 am]
BILLING CODE 8010-01-M