30266 Federal Register / Vol. 61, No. 116 / Friday, June 14, 1996 / Notices

7CFR 200.30–3(a)(12) (1995).

accurate clearance and settlement of

securities transactions.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with Sections

17A(B)(3) (A) and (F) of the Act and the

rules and regulations thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

NSCC–96–05) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15182 Filed 6–13–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26530]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

June 7, 1996.

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 thereunder. 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 amendments thereto is/are available

for public inspection through the

Commission’s Office 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

July 1, 1996, to the Secretary, Securities

and Exchange Commission,

Washington, D.C. 20549, 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 case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing should

identify specifically the issues of fact 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 said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

New England Electric System (70–8819)

New England Electric System

(‘‘NEES’’), 25 Research Drive,

Westborough, Massachusetts 05182, a

registered holding company, has filed

an application-declaration under

sections 6(a), 7, 9(a), 10, 12, and 13(b)

of the Act and rules 45, 90 and 91

thereunder.

The Federal Energy Regulatory

Commission (‘‘FERC’’) has recently

promulgated guidelines setting forth

requirements for open and comparable

transmission access. In response, NEES

seeks to establish a subsidiary to be

named NEES Transmission Services,

Inc. (‘‘NEES Trans’’), for the purpose of

operating the transmission assets owned

by, or subject to the control of, NEES’

utility subsidiaries (‘‘NEES

Transmission Assets’’).

In operating these assets, NEES will

serve as the interface between wholesale

electric customers and the NEES

transmission system as the transmission

service provider. NEES Trans will serve

both associates and nonassociates and

will charge the same tariff to each. NEES

Trans will make no retail sales of

electricity.

Rights to operational control over the

NEES Transmission Assets will be

provided by a Transmission and

Support Agreement (‘‘Agreement’’)

among NEES, NEES Trans, and NEES’

utility subsidiaries Massachusetts

Electric Company (‘‘MEC’’), The

Narragansett Electric Company

(‘‘NERC’’), Granite State Electric

Company (together with MEC and NEC,

‘‘Retail Companies’’) and New England

Power Company (‘‘NEP’’). Pursuant to

the Agreement, NEES Trans will have

operational control over the NEES

Transmission Assets only to the extent

necessary to accomplish a FERCjurisdictional transmission transaction.

The Agreement also grants NEES Trans

use of the distribution systems of the

Retail Companies as they may be

needed to support wholesale

transactions.

NEES does not propose to transfer

ownership of the NEES Transmission

Assets to NEES Trans at this time.

However, NEES will have the

responsibility of planning the expansion

of the transmission system and will

notify NEP of the need for additions to

the system. NEES Trans will have the

obligation to expand transmission

capacity as needed, to arrange for NEES

affiliates to license, engineer and

construct the necessary additions, and

to provide operational services

necessary to maintain transmission

system reliability.

NEES proposes to provide initial

financing for NEES Trans by the

purpose of one thousand shares of

common stock, par value $1.00 per

share, for a total purchase price of

$1,000. NEES then proposes to make

capital contributions and/or loans to

NEES Trans from time to time, in

amounts not to exceed $10 million in

the aggregate outstanding at any one

time. Any such loans will be in the form

of non-interest bearing subordinated

notes payable in twenty years or less

from the date of issue. NEES requests

authority to make such investments

through December 31, 1999.

NEES Trans additionally seeks

authority through October 31, 1997 to

borrow and lend money in the NEES

Money Pool, the terms of which are

described in an order of the Commission

dated October 25, 1995 (HCAR No.

25399), and to borrow from banks on a

short-term basis. NEES proposes that

NEES Trans have access to the NEES

Money Pool on the same priority as the

Retail Companies. The aggregate

principal amount of debt outstanding

under this authority will not at any time

exceed $15 million. Amounts owed

under the Money Pool would be payable

on demand. Amounts owned to banks

for short-term borrowings would be

payable within one year.

The proceeds from the proposed

borrowings are to be used (i) to pay then

outstanding notes initially issued to

banks and/or borrowings from the

Money Pool and (ii) for other cooperate

purposes relating to ordinary business

operations, including working capital,

and funds to cover timing differences in

payments received and payments due.

NEES’ utility subsidiaries and NEES’

service company subsidiary, New

England Power Service Company, may

assign certain technical and support

staff personnel to NEES Trans to work

on NEES Trans operations. Not more

than two percent of the total employees

of such companies would be assigned to

NEES Trans in any one year. All costs

associated with such staff (including

compensation, overheads, and benefits)

would be fully reimbursed by NEES

Trans in accordance with rules 90 and

91 of the Act.

Central Power and Light Company, et

al. (70–8869)

Central Power and Light Company

(‘‘CPL’’), 539 North Carancahua Street,

Corpus Christi, Texas 78401–2802,

Public Service Company of Oklahoma

(‘‘PSO’’), 212 East Sixth Street, Tulsa,

Oklahoma 74119–1212, and West Texas

Utilities Company (‘‘WTU’’), 301

Cypress, Abilene, Texas 79601

(collectively, ‘‘Applicants’’), each a
Federal Register / Vol. 61, No. 116 / Friday, June 14, 1996 / Notices 30267

1Applicants anticipate that they would be

required to pay a premium or fee to obtain the

credit enhancement.

2HCAR No. 13105, as supplemented by HCAR

No. 16369.

3The Old Bonds may not be redeemed prior to

their first redemption date and thereafter may be

redeemed at the then applicable redemption price

plus accrued interest to the redemption date. The

Old Bonds will be redeemable on September 15,

1996 at 103% of principal amount.

wholly owned subsidiary company of

Central and South West Corporation, a

registered holding company, have filed

an application-declaration under

sections 6(a), 7, 9(a), 10 and 12(d) of the

Act and rule 44 thereunder.

Applicants propose, through

December 31, 1999, to: (i) incur

obligations in connection with the

proposed issuance by Red River

Authority of Texas (‘‘Red River’’) of up

to $113.3 million aggregate principal

amount of pollution control revenue

bonds (‘‘New Bonds’’) in one or more

series; (ii) obtain credit enhancement for

the New Bonds, with could include

bond insurance, a letter of credit or a

liquidity facility;1 (iii) issue first

mortgage bonds (‘‘First Mortgage

Bonds’’) as security for the payment of

the New Bonds; (iv) deviate from the

Commission’s Statement of Policy

Regarding First Mortgage Bonds

(‘‘Statement of Policy’’);2 and (v) use

hedging products to manage interest rate

risk or lower their interest rate costs.

Of the total aggregate principal

amount of New Bonds to be issued, (i)

up to $63.3 million aggregate principal

amount may be pollution control

revenue refunding bonds (‘‘Refunding

Bonds’’), and (ii) up to $50 million

aggregate principal amount may be new

money revenue bonds (‘‘New Money

Bonds’’). The issuance of New Money

Bonds may be combined with the

issuance of Refunding Bonds.

The Refunding Bonds will be used to

reacquire all or a portion of $63.3

million of outstanding 77⁄8 Pollution

Control Revenue Bonds Series 1984

issued by Red River (‘‘Old Bonds’’).3

The New Bonds will be used to

reimburse the Applicants’ treasuries for

any expenditures made that qualify for

tax-exempt financing or for current solid

waste expenditures.

Applicants and Red River entered into

an installment sale agreement (‘‘Sale

Agreement’’) to provide for the issuance

of the Old Bonds. The proceeds from the

Old Bonds were used to acquire,

construct and improve certain air and

water pollution control and solid waste

disposal facilities at the Oklaunion

Electric Generating Plant, located near

Vernon, Texas, in which CPL, PSO and

WTU own 7.8%, 15.6% and 54.7%

undivided interests, respectively. In

connection with the issuance of the

New Bonds, Applicants will (i) amend

or supplement the Sale Agreement, (ii)

enter into an agreement with

substantially the same terms as the Sale

Agreement and/or (iii) enter into a new

installment sale agreement.

The New Bonds will bear interest at

a fixed or floating rate, may or may not

be secured with First Mortgage Bonds

and will mature in not more than forty

years. The interest rate, redemption

provisions and other terms and

conditions applicable to the New Bonds

will be determined by negotiations

between the Applicants and one or more

investment banking firms or other

entities that will purchase or underwrite

the New Bonds (‘‘Purchasers’’). It is

anticipated that: (i) the New Bonds will

be redeemable at any time in whole at

the option of the Applicants at the

principal amount thereof plus accrued

interest, upon the occurrence of various

extraordinary events specified in the

Amended Sale Agreement; (ii) the New

Bonds will be subject to optional

redemption in whole or in part at times

and with premiums to be determined by

negotiations between the Applicants

and the Purchasers; and (iii) the New

Bonds will be subject to special

mandatory redemption, in whole or in

part, at the principal amount thereof

plus accrued interest, in the event the

interest on the New Bonds becomes

subject to federal income tax.

Pursuant to the Sale Agreement,

Applicants transferred the Facilities to

Red River, which financed the

acquisitions and related costs thereof

with the proceeds of the Old Bonds. The

Sale Agreement contains commitments

by the Applicants to pay to Red River

at specified times amounts sufficient to

enable Red River to pay debt service on

the Old Bonds, including principal,

interest and redemption premium, if

any.

Applicants also request authority to

issue First Mortgage Bonds as security

for the payment of the New Bonds, at its

option, depending upon market

conditions at the time of issuance of the

New Bonds. The First Mortgage Bonds

will be held by the Trustee solely for the

benefit of the holders of the New Bonds

and will not be transferable except to a

successor Trustee. The First Mortgage

Bonds will be issued in the exact

amounts and have substantially the

same terms as the New Bonds.

Applicants also state that the First

Mortgage Bonds and the New Bonds

may include: (i) up to a 15 year optional

redemption limitation; (ii) an omission

of sinking fund provisions; and (iii) a

limitation on dividends to a percentage

of net income available for dividends on

common stock if the Applicant’s

common stock equity is not maintained

at a certain percentage of total

capitalization. Applicants request that

the Commission authorize these

deviations from the Statement of Policy.

The proceeds of the offering of the

New Bonds will be used to: (i) redeem

the Old Bonds pursuant to the terms of

the Indenture; and (ii) reimburse the

Applicant’s treasuries for any

expenditures made that qualify for taxexempt financing or to provide for

current solid waste expenditures. The

proceeds of any offering may also be

used to reimburse the Applicants’

treasuries for Old Bonds previously

acquired.

Applicants may be required to deposit

the proceeds of the New Bonds with the

Trustee in connection with the

Redemption of the Old Bonds. Any

additional funds required to pay for the

redemption of Old Bonds and the costs

of issuance of the New Bonds will be

provided by the Applicants from

internally generated funds and shortterm borrowings pursuant to orders of

the Commission dated March 31, 1993,

September 28, 1993, March 18, 1994,

June 15, 1994 and March 21, 1995

(HCAR Nos. 25777, 25897, 26007, 26066

and 26254, respectively), or subsequent

orders.

Applicants propose to manage interest

rate risk and/or lower their interest costs

through the use of hedging products,

including fixed-for-floating interest rate

swaps, forward swaps (i.e., where a

swap agreement is entered into but the

exchange of fixed and floating payments

does not begin until a future date, which

is generally the call date on outstanding

bonds), caps and collars and through

forward transactions. Applicants also

request authorization to enter into

revenue (or offsetting) interest rate swap

arrangements, or other contractual

arrangements, in order to limit the

impact of anticipated movements in

interest rates or offset the effect of

existing interest rate swap agreements.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15111 Filed 6–13–96; 8:45 am]

BILLING CODE 8010–01–M