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
30268 Federal Register / Vol. 61, No. 116 / Friday, June 14, 1996 / Notices

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3A zero plus tick is a price equal to the last sale

where the last preceding transaction at a different

price was at a lower price. Conversely, a zero minus

tick is a price equal to the last sale where the last

preceding transaction at a different price was at a

higher price.

4Securities Exchange Act Release No. 36014 (July

21, 1995), 60 FR 38870. The Commission originally

approved the pilot program in Securities Exchange

Act Release No. 33957 (Apr. 22, 1994), 59 FR 22188

(‘‘1994 Approval Order’’). On April 21, 1995, the

Commission granted a three month extension to the

pilot program, ending on July 21, 1995. Securities

Exchange Act Release No. 35635 (Apr. 21, 1995), 60

FR 20780.

5 15 U.S.C. 78f.

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78k(b).

8 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1) (1988).

[Release No. 34–37288; File No. SR–Amex–

96–16]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange, Inc.

Relating to Amendments to Rule 170

Pertaining to Specialists’ Liquidating

Transactions

June 7, 1996.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 30,

1996, the American Stock Exchange,

Inc. (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which Items have

been prepared by the self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex requests permanent

approval of a pilot program that amends

Exchange Rule 170 to permit a specialist

to effect a liquidating transaction on a

zero minus tick, in the case of a ‘‘long’’

position, or zero plus tick, when

covering a ‘‘short’’ position, without

Floor Official approval.3 The pilot

program also amends Exchange Rule

170 to set forth the affirmative action

that specialists are required to take

subsequent to effecting various types of

liquidating transactions.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization included

statements concerning the purpose of

and basis for the proposed rule change

and discussed any comments it received

on the proposed rule change. The text

of these statements may be examined at

the places specified in Item III below.

The self-regulatory organization has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

On July 21, 1995, the Commission

approved a one-year extension of a pilot

program that amends Exchange Rule

170 to permit a specialist to effect a

liquidating transaction on a zero minus

tick, in the case of a ‘‘long’’ position, or

a zero plus tick, when covering a

‘‘short’’ position, without Floor Official

approval.4 The amendments also set

forth the affirmative action that

specialists are required to take

subsequent to effecting various types of

liquidating transactions.

During the course of the pilot

program, the Exchange has monitored

compliance with the requirements of the

Rule, and the Amex’s findings in this

regard have been forwarded to the

Commission under separate cover. The

Exchange believes the amendments

have provided specialists with

flexibility in liquidating specialty stock

positions in order to facilitate their

ability to maintain fair and orderly

markets, particularly during unusual

market conditions. In addition, the

specialist’s concomitant obligation to

participate as dealer on the opposite

side of the market after a liquidating

transaction has been strengthened. The

Exchange is therefore proposing

approval of the amendments to

Exchange Rule 170.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act 5

in general and furthers the objectives of

Section 6(b)(5) 6 in particular in that it

is designed to promote just and

equitable principles of trade, remove

impediments to and perfect the

mechanism of a free and open market,

and, in general, protect investors and

the public interest. The proposed rule

change also is consistent with Section

11(b) of the Act 7 which allows

exchanges to promulgate rules relating

to specialists in order to maintain fair

and orderly markets.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The proposed rule change will impose

no burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, DC 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. § 552, will be

available for inspection and copying at

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, DC 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of the Amex. All submissions

should refer to File No. SR–Amex–96–

16 and should be submitted by July 5,

1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–15112 Filed 6–13–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37294; File No. SR–

MBSCC–96–01]

Self-Regulatory Organizations; MBS

Clearing Corporation; Notice of Filing

of a Proposed Rule Change To Modify

Participants Fund Deposit

Requirements

June 10, 1996.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

March 8, 1996, MBS Clearing