Registration No.
333-
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Baltimore Gas and Electric CompanyBALTIMORE GAS AND ELECTRIC COMPANY
(Exact Name of Registrant as Specified in its Charter)
MarylandMARYLAND
(State of Incorporation)
52-0280210
(I.R.S. Employer Identification No.)
DavidDAVID A. Brune, Vice PresidentBRUNE, VICE PRESIDENT
39 W. Lexington Street, Baltimore, MarylandLEXINGTON STREET, BALTIMORE, MARYLAND 21201
(410) 234-5511
(Address, including Zip Code, and Telephone Number, including Area Code
of Registrant's Principal Executive Offices and Agent for Service)
Approximate date of commencement of proposed sale to the public:APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the
effective date of this Registration Statement as determined by market
conditions.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
----------------------
CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM
CLASS OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO PRICE OFFERING REGISTRATON
BE REGISTERED BE REGISTERED PER UNIT PRICE FEE
- --------------------------------------------------------------------------------
Medium-Term Notes, $200,000,000 100%* $200,000,000 $55,600
Series H
================================================================================
Title of Proposed Proposed
each class maximum maximum Amount of
of securities to Amount to offering price aggregate registration
be registered be registered per unit offering price fee
- --------------------------------------------------------------------------------
Common Stock 3,000,000 Shares $31 1/4* $93,750,000 $28,410
(without par value)
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* Inserted solely for the purpose of calculating the registration fee; computed
soley on the basis of the average of the reported high and low sales prices on
the New York Stock Exchange-Composite Transactions on July 17, 1998, as reported
in The Wall Street Journal pursuant to Rule 457(c).
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act offee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
may determine.MAY DETERMINE.
================================================================================
The information in his prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED ___________, 1998
PROSPECTUS
[GRAPHIC$200,000,000
MEDIUM-TERM NOTES SERIES H
[BGE LOGO OMITTED]
3,000,000 Shares
Common Stock Baltimore Gas and Electric CompanyBALTIMORE GAS AND ELECTRIC COMPANY
39 W. Lexington Street
Baltimore, Maryland 21201
(410) 234-5000
----------------TERMS OF SALE
THE FOLLOWING TERMS MAY APPLY TO THE NOTES WHICH WE MAY SELL AT ONE OR MORE
TIMES. THE FINAL TERMS FOR EACH NOTE WILL BE INCLUDED IN A PRICING SUPPLEMENT.
WE WILL RECEIVE BETWEEN $199,750,000 AND $198,500,000 OF THE PROCEEDS FROM THE
SALE OF THE NOTES, AFTER PAYING THE AGENTS COMMISSIONS OF BETWEEN $250,000 AND
$1,500,000.
- - Mature 9 months to 30 years
- - Fixed or floating interest rate. The floating interest rate formula may be
based on:
Commercial paper rate
Prime rate
CD rate
Federal Funds effective rate
LIBOR
Treasury rate
CMT rate
- - Remarketing features
- - Certificate or book-entry form
- - Subject to redemption and repurchase at option of BGE may sell sharesor holder
- - Not convertible, amortized or subject to a sinking fund
- - Interest paid on fixed rate notes on May 1 and November 1
- - Interest paid on floating rate notes monthly, quarterly, semi-annually,
or annually
- - Minimum denominations of common stock from time to time through the agent
under our continuous offering program. We will receive all the proceeds from the
sale$1,000, increased in multiples of the stock, less expenses, after paying the agent a commission of not
more than 5 cents per share. The proceeds we receive will depend on the number
of shares we sell and the market price of our stock at the time of sale. We also
may sell shares of common stock in fixed price offerings, special offerings or
block transactions. For these types of sales, we will prepare and distribute a
prospectus supplement which will describe the sale. Our common stock is listed
on the New York, Chicago and Pacific stock exchanges under the symbol "BGE."
-----------------
We urge you to carefully read this prospectus which will describe the
specific terms of the offering before you make your investment decision.
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
- --------------------------------------------------------------------------------
SALOMON SMITH BARNEY
- Agent -
____________________, 1998$1,000
WE URGE YOU TO CAREFULLY READ THIS PROSPECTUS AND THE PRICING SUPPLEMENT WHICH
WILL DESCRIBE THE SPECIFIC TERMS OF THE OFFERING BEFORE YOU MAKE YOUR INVESTMENT
DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
AGENTS
(ONCE THE REGISTRATION STATEMENT IS EFFECTIVE, THE DATE OF THE PROSPECTUS WILL
BE INSERTED HERE)
TABLE OF CONTENTS
Page
------
Where You Can Find More Information...................................PAGE
----
WHERE YOU CAN FIND MORE INFORMATION ........................................ 3
BGE...................................................................Forward-Looking Statements ............................................. 3
BGE......................................................................... 4
UsePRICING SUPPLEMENT.......................................................... 4
USE OF PROCEEDS............................................................. 5
RATIO OF EARNINGS TO FIXED CHARGES.......................................... 5
DESCRIPTION OF THE NOTES.................................................... 6
General................................................................. 6
Redemptions............................................................. 6
Repurchases............................................................. 6
Remarketed Notes........................................................ 6
Book-Entry Notes - Registration, Transfer,
and Payment of Proceeds....................................................... 4
Common Stock DividendsInterest and Price Range................................ 5
DescriptionPrincipal................................ 6
Book-Entry Notes - Method of Common Stock........................................... 6
PlanRepurchase................................. 8
Certificate Notes - Registration, Transfer, and
Payment of Distribution.................................................. 6
Legal Opinions........................................................ 7
Experts............................................................... 7Interest and Principal..................................... 8
Certificate Notes - Method of Repurchase................................ 8
Interest Rate........................................................... 8
General.......................................................... 8
Fixed Rate Notes................................................. 9
Floating Rate Notes.............................................. 9
General.................................................... 9
Date of Interest Rate Change............................... 9
When Interest Rate Is Determined........................... 10
When Interest Is Paid...................................... 10
Commercial Paper Rate Notes................................ 11
Prime Rate Notes........................................... 11
CD Rate Notes.............................................. 12
Federal Funds Effective Rate Notes......................... 12
LIBOR Notes................................................ 13
Treasury Rate Notes........................................ 14
CMT Rate Notes............................................. 14
Event of Default..................................................... 16
Modification of Indenture............................................ 17
Consolidation, Merger or Sale........................................ 17
PLAN OF DISTRIBUTION........................................................ 17
LEGAL OPINIONS.............................................................. 18
EXPERTS..................................................................... 18
GLOSSARY.................................................................... 19
2
WHERE YOU CAN FIND MORE INFORMATION
General
We file annual, quarterly and currentspecial reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N. W.N.W., Washington, D.C., 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. The SEC maintains an internet site at http://www.sec.gov that
contains reports, proxy and information statements, and other information,
regarding issuers (including BGE) that file documents with the SEC
electronically. Our SEC filings may also be obtained from our web site at
http://www.bge.com.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all the common stock.
This prospectus is part of a registration statement that we filed with the SEC.notes.
- - Annual Report on Form 10-K for the year ended December 31, 1997;
- - Quarterly ReportReports on Form 10-Q for the quarterquarters ended March 31, 1998 and
June 30, 1998; and
- - Current Report on Form 8-K dated June 15, 1998.
YouThis prospectus is part of a registration statement we filed with the SEC.
Any person, including any beneficial owner, may request a copy of these filings,
at no cost, by writing or telephoning us at:at the following address:
Shareholder Services
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
410-783-5920
You should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone else to provide
you with different information. We are not making an offer of the
common stockthese notes in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of any date
other than the date on the front of those documents.
Forward-Looking StatementsFORWARD-LOOKING STATEMENTS
We make statements in this prospectus and the documents we incorporate by
reference that are considered forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. Sometimes
these statements will contain words such as "believes," "expects," "intends,"
"plans" and other similar words. These statements are not guarantees of our
future performance and are subject to risks, uncertainties and other important
factors that could cause our actual performance or achievements to be materially
different from those we project. These risks, uncertainties and factors include:
- - general economic, business and regulatory conditions;
- - energy supply and demand;
- - competition;
- - federal and state regulations;
3
- - availability, terms and use of capital;
- - nuclear and environmental issues;
- - weather; and
- - industry restructuring and cost recovery (including the potential effect of
stranded costs).
Given these uncertainties, you should not place undue reliance on these
forward-looking
3
statements. Please see the documents we incorporate by reference
for more information on these factors. These forward-looking statements
represent our estimates and assumptions only as of the date of this prospectus.
BGE
BGE is a public utility that has served the central Maryland area for over 175
years. BGE produces, purchases and sells electricity and purchases, transports
and sells natural gas. BGE also jointly owns and operates two electric
generating plants and one hydroelectric plant in Pennsylvania.
BGE also has wholly owned subsidiaries that are engaged in several diversified
business activities, including:activities. We have combined our diversified businesses under
Constellation Enterprises, Inc. They are as follows:
- - energyConstellation Power Source, Inc. - our power marketing activities;business;
- - Constellation Power, Inc. - our power generation projects;business;
- - Constellation Energy Source, Inc. - our energy products and services
business;
- - BGE Home Products & Services, Inc. and Subsidiaries - our home products,
and commercial building systems;systems and residential and small commercial natural
gas brokering business;
- - investment activities;Constellation Investments, Inc. - our financial investments business; and
- - Constellation Real Estate Group, Inc. - our real estate.estate and senior-living
facilities business.
PRICING SUPPLEMENT
The pricing supplement for each offering of notes will contain the specific
information and terms for that offering. The pricing supplement may also add,
update or change information contained in this prospectus. It is important for
you to consider the information contained in this prospectus and the pricing
supplement in making your investment decision.
4
USE OF PROCEEDS
We will use theThe net proceeds from the sale of common stockthe notes will be used for general corporate
purposes relating to our utility business, including repayment of commercial
paper borrowings used to finance construction, other capital expenditures, and
operations. If we do not use the net proceeds immediately, we will temporarily invest
them in short term, interest bearingshort-term, interest-bearing obligations. For current information on our
commercial paper balances and average interest rate, see our most recent Form
10-K and 10-Q. See WhereWHERE YOU CAN FIND MORE INFORMATION.
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is as
follows:
TWELVE MONTHS TWELVE MONTHS ENDED DECEMBER 31,
ENDED ----------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------- ---- ---- ---- ---- ----
3.11 2.78 3.10 3.21 3.14 3.00
For current information on the Ratio of Earnings to Fixed Charges, please see
our most recent Form 10-K and 10-Q. See WHERE YOU CAN FIND MORE INFORMATION.
5
DESCRIPTION OF THE NOTES
GENERAL
We will issue the notes under an indenture between us and the Trustee, The Bank
of New York, dated July 1, 1985 and supplemented on October 1, 1987 and January
26, 1993. This prospectus briefly outlines some of the indenture provisions. If
you would like more information on these provisions, review the indenture and
its supplements that we filed with the SEC. See WHERE YOU CAN FIND MORE
INFORMATION on how to locate the indenture and the supplements. You Can Find More Information.
4may also
review the indenture at the Trustee's offices at 101 Barclay Street, New York,
New York.
The indenture does not limit the amount of notes that may be issued. Each series
of notes may differ as to their terms. For current information on our debt
outstanding see our most recent Form 10-K and 10-Q. See WHERE YOU CAN FIND MORE
INFORMATION.
The notes are unsecured and will rank equally with all our unsecured
indebtedness. The notes will be denominated in U.S. dollars and we will pay
principal and interest in U.S. dollars. The notes will not be subject to any
conversion, amortization, or sinking fund. It is anticipated that the notes will
be "book-entry," represented by a permanent global note registered in the name
of The Depository Trust Company, or its nominee. However, we reserve the right
to issue notes in certificate form registered in the name of the noteholders.
In the discussion that follows, whenever we talk about paying principal on the
notes, we mean at maturity, redemption or repurchase. Also, in discussing the
time for notices and how the different interest rates are calculated, all times
are New York City time, unless otherwise noted.
The following terms may apply to each note as specified in the applicable
pricing supplement and the note. The applicable pricing supplement will describe
the terms for the notes including: interest rate, remarketing provisions, our
right to redeem notes, the holders' right to tender notes, and any other
provisions.
REDEMPTIONS
We may redeem notes at our option. Notes may be redeemable in whole or in part
in increments of $1,000 upon no more than 60, and not less than 30, days prior
notice. If we do not redeem all the notes of a series at one time, the Trustee
selects the notes to be redeemed in a manner it determines to be fair.
REPURCHASES
The noteholder may have the right to cause us to repurchase the notes. We will
repurchase the notes in whole or in part in increments of $1,000. The method for
repurchases differs for book-entry and certificate notes, and is discussed on
page 8.
REMARKETED NOTES
We may issue notes with remarketing features that allow holders the option to
sell their notes back to us. In turn, we have the option to retire these notes
or remarket and sell them to new holders.
BOOK-ENTRY NOTES - REGISTRATION, TRANSFER, AND PAYMENT OF INTEREST AND PRINCIPAL
Book-entry notes of a series will be issued in the form of a global note that
will be deposited with The Depository Trust Company, New York, New York ("DTC").
This means that we will not issue certificates to each holder. One global note
will be issued to DTC who will keep a computerized record of its participants
(for example, your broker) whose clients have purchased the
6
COMMON STOCK DIVIDENDSnotes. The participant will then keep a record of its clients who purchased the
notes. Unless it is exchanged in whole or in part for a certificate note, a
global note may not be transferred; except that DTC, its nominees, and their
successors may transfer a global note as a whole to one another.
Beneficial interests in global notes will be shown on, and transfers of global
notes will be made only through, records maintained by DTC and its participants.
DTC has provided us the following information: 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 United States
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants ("Direct Participants") deposit with DTC. DTC
also records the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
computerized records for Direct Participant's accounts. This eliminates the need
to exchange certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a Direct
Participant. The rules that apply to DTC and its participants are on file with
the SEC.
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.
We will wire principal and interest payments to DTC's nominee. We and the
Trustee will treat DTC's nominee as the owner of the global notes for all
purposes. Accordingly, we, the Trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global notes to owners of
beneficial interests in the global notes.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global notes as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to Direct Participants whose accounts are credited
with notes on a record date, by using an omnibus proxy. Payments by participants
to owners of beneficial interests in the global notes, and voting by
participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with notes held
for the account of customers registered in "street name." However, payments will
be the responsibility of the participants and not of DTC, the Trustee or us.
Notes represented by a global note will be exchangeable for certificate notes
with the same terms in authorized denominations only if:
- - DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days; or
- - we determine not to require all of the notes of a series to be represented
by a global note and notify the Trustee of our decision.
7
BOOK-ENTRY NOTES - METHOD OF REPURCHASE
Participants, on behalf of the owners of beneficial interests in the global
notes, may exercise the repurchase option by delivering written notice to our
paying agent at least 30, but no more than 60, days prior to the date of
repurchase. The paying agent, The Bank of New York, must receive notice by 5:00
p.m. on the last day for giving notice. Procedures for the owners of beneficial
interests in global notes to notify their participants of their desire to have
their note repurchased will be governed by the customary practices of the
participant. The written notice to the paying agent must state the principal
amount to be repurchased. It is irrevocable and a duly authorized officer of the
participant (with signatures guaranteed) must sign it.
CERTIFICATE NOTES - REGISTRATION, TRANSFER,
AND PRICE RANGE
When our BoardPAYMENT OF INTEREST AND PRINCIPAL
If we issue certificate notes, they will be registered in the name of Directors declares dividends they alsothe
noteholder. The notes may be transferred or exchanged, pursuant to
administrative procedures in the Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by contacting the
paying agent.
Holders of over $5 million in principal amount of notes can request that payment
of principal and interest be wired to them by contacting the paying agent at the
address set forth above at least one business day prior to the payment date.
Otherwise, payments will be made by check.
CERTIFICATE NOTES - METHOD OF REPURCHASE
Noteholders desiring to exercise their repurchase option must notify the paying
agent at least 30 but not more than 45 days prior to the repayment date by
providing the bank:
- - the note, with the section entitled "Option to Elect Repayment" on the
reverse of the note completed; or
- - a fax or letter (first class, postage prepaid) from a member of a national
securities exchange, the National Association of Securities Dealers, or a
bank or trust company in the United States which states the following:
the name of the holder;
the principal amount of the note and the amount to be repurchased;
the certificate number or the maturity and a description of the terms
of the note;
a statement that you wish to sell all or a portion of your note; and
- - a guaranty that the note with the section entitled "Option to Elect
Repayment" on the reverse of the note completed, will be received by the
paying agent within 5 business days.
The note and form must be received by the paying agent by such 5th business day.
Your notice of repurchase is irrevocable.
If you sell a portion of a note, the old note will be canceled and a new note
for the remaining principal amount will be issued to you.
INTEREST RATE
GENERAL
We have provided a GLOSSARY at the end of this prospectus to define the
capitalized words used in discussing the interest rates payable on the notes.
8
The interest rate on the notes will either be fixed or floating. The interest
paid will include interest accrued to, but excluding, the date of maturity,
redemption or repurchase. Interest is generally payable to the person in whose
name the note is registered at the close of business on the record datesdate before
each interest payment date. Interest payable at maturity, redemption, or
repurchase, however, will be payable to the person to whom principal is payable.
The first interest payment on any note originally issued between a record date
and interest payment dates.date or on an interest payment date will be made on the
interest payment date after the next record date. Interest payments, other than
those payable at maturity, redemption or repurchase will be paid, at our option,
by check or wire transfer.
FIXED RATE NOTES
Each pricing supplement will designate the fixed rate of interest payable on a
note. Interest will be paid May 1 and November 1, and upon maturity, redemption
or repurchase. If any payment date falls on a day that is not a Business Day,
payment will be made on the next Business Day and no additional interest will be
paid. The record dates for such notes will be April 15 (for interest to be paid
on May 1) and October 15 (for interest to be paid on November 1). Interest
payments will be the amount of interest accrued to, but excluding, each May 1
and November 1. Interest will be computed using a 360-day year of twelve 30-day
months.
FLOATING RATE NOTES
GENERAL
Each floating rate note will have an interest rate formula. The formula may be
based on:
- - the commercial paper rate;
- - the prime rate; the CD rate;
- - the federal funds effective rate;
- - the LIBOR;
- - the Treasury rate;
- - the CMT rate; or
- - another interest rate index.
The applicable pricing supplement will also indicate the Spread and/or Spread
Multiplier, if any. In addition, any floating rate note may have a maximum or
minimum interest rate limitation.
Upon request, the Calculation Agent will provide the current interest rate and,
if different, the interest rate which will become effective on the next Interest
Reset Date.
DATE OF INTEREST RATE CHANGE
The interest rate on each floating rate note may be reset daily, weekly,
monthly, quarterly, semi-annually, or annually. The Interest Reset Date will be:
- - for notes which reset daily, each Business Day;
- - for notes (other than Treasury rate notes) which reset weekly, the
Wednesday of each week;
- - for Treasury rate notes which reset weekly, the Tuesday of each week;
- - for notes which reset monthly, the third Wednesday of each month;
- - for notes which reset quarterly, the third Wednesday of March, June,
September and December;
- - for notes which reset semi-annually, the third Wednesday of the two
months of each year indicated in the applicable pricing supplement; and
- - for notes which reset annually, the third Wednesday of the month of each
year indicated in the applicable pricing supplement.
The initial interest rate or interest rate formula on each note effective until
the first Interest Reset Date will be indicated in the applicable pricing
supplement. Thereafter, the interest rate will be the rate determined on the
next Interest
9
Determination Date, as explained below. Each time a new interest rate is
determined, it will become effective on the subsequent Interest Reset Date. If
any Interest Reset Date is not a Business Day, then the Interest Reset Date will
be postponed to the next Business Day. However, in the case of a LIBOR note, if
the next Business Day is in the next calendar month, the Interest Reset Date
will be the immediately preceding Business Day.
WHEN INTEREST RATE IS DETERMINED
The Interest Determination Date for all notes (except Treasury rate notes) is
the second Business Day before the Interest Reset Date.
The Interest Determination Date for Treasury rate notes will be the day of the
week in which the Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are typicallyusually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the 10thauction is
usually held on Tuesday. However, the auction may be held on the preceding
Friday. If an auction is held on the preceding Friday, that day will be the
Interest Determination Date pertaining to the Interest Reset Date occurring in
the next week. If an auction date falls on any Interest Reset Date then the
Interest Reset Date will instead be the first Business Day immediately following
the auction date.
WHEN INTEREST IS PAID
Interest is paid as follows:
- - for notes which reset daily or weekly, on the third Wednesday of March,
June, September and December;
- - for notes which reset monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December (as indicated
in the applicable pricing supplement);
- - for notes which reset quarterly, on the third Wednesday of March, June,
September, and we normally mail dividendsDecember;
- - for notes which reset semi-annually, on the third Wednesday of the two
months specified in the applicable pricing supplement;
- - for notes which reset annually, on the third Wednesday of the month
specified in the applicable pricing supplement; and
- - at maturity, redemption or repurchase.
If interest is payable on a day which is not a Business Day, payment will be
postponed to the next Business Day. However, for LIBOR notes, if the next
Business Day is in the next calendar month, interest will be paid on the
preceding Business Day.
The record date will be 15 calendar days prior to each shareholderday interest is paid,
whether or not such day is a Business Day.
The interest payable will be the amount of interest accrued to, but excluding,
the interest payment date. However, for notes on which the interest resets daily
or aboutweekly, the 1stinterest payable will include interest accrued to and including
the record date prior to the interest payment date. If the interest payment date
is also a day that principal is due, the interest payable will include interest
accrued to, but exclude, the date of January, April, Julymaturity, redemption or repurchase.
The accrued interest for any period is calculated by multiplying the principal
amount of a note by an accrued interest factor. The accrued interest factor is
computed by adding the interest factor calculated for each day in the period to
the date for which accrued interest is being calculated. The interest factor
(expressed as a decimal rounded upwards if necessary, as described below) is
computed by dividing the interest rate (expressed as a decimal rounded upwards
if necessary) applicable to such date by 360, unless
10
the notes are Treasury rate notes or CMT rate notes in which case it will be
divided by the actual number of days in the year.
All percentages resulting from any calculation of floating rate notes will be
rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and October. We have paid dividends9.876544%
(or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upwards).
COMMERCIAL PAPER RATE NOTES
Each commercial paper rate note will bear interest at the rate (calculated with
reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier,
if any) specified on our
common stock continuously since 1910.
The rangethe commercial paper rate note and in the applicable
pricing supplement.
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the high and low sale pricesrate on such date for commercial paper having the Index Maturity specified
in the applicable pricing supplement as published in H.15(519) under the heading
"Commercial Paper."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Commercial Paper Rate will be the Money Market Yield
of our common stock, reportedthe rate on the Commercial Paper Interest Determination Date for commercial
paper having the Index Maturity specified in the applicable pricing supplement
as published in Composite Quotations under the heading "Commercial Paper."
(b) If the rate is not published or in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Commercial Paper Rate for that Commercial Paper Interest
Determination Date will then be calculated by the Calculation Agent in the
following manner.
The Wall Street Journal,Commercial Paper Rate will be calculated as the Money Market Yield of the
average for the offered rates, as of 11:00 A.M., on that date, of three leading
dealers of commercial paper in New York Stock Exchange-Composite Transactionsselected for commercial paper having the
applicable Index Maturity placed for an industrial issuer whose bond rating is
"AA," or the equivalent, from a nationally recognized rating agency.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
PRIME RATE NOTES
Each prime rate note will bear interest at the rate (calculated with reference
to the Prime Rate and dividends paid per share werethe Spread and/or Spread Multiplier, if any) specified on
the prime rate note and in the applicable pricing supplement.
"Prime Rate" means, with respect to any Prime Rate Interest Determination Date,
the rate set forth on such date in H.15(519) under the heading "Bank Prime
Loan."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Prime Rate will be the average (rounded upwards, if
11
necessary, to the next higher one-hundred thousandth of a percentage point) of
the rates of interest publicly announced by each bank that appear on the Reuters
Screen USPRIMEONE Page as its prime rate or base lending rate as in effect for
that Prime Rate Interest Determination Date.
(b) If fewer than four, but more than one, rates appear on the Reuters Screen
USPRIMEONE Page, the Prime Rate will be the average of the prime rates (quoted
on the basis of the actual number of days in the year divided by a 360-day year)
as of the close of business on the Prime Rate Interest Determination Date by
four major money center banks in New York selected by the Calculation Agent.
(c) If fewer than two rates appear, the Prime Rate shall be determined on the
basis of the rates furnished in New York by the appropriate number of substitute
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, having total equity capital of at least
$500 million and being subject to supervision or examination by a Federal or
State authority, as selected by the Calculation Agent.
(d) Finally, if the banks are not quoting as mentioned above, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
CD RATE NOTES
Each CD rate note will bear interest at the rate (calculated with reference to
the CD Rate and the Spread and/or Spread Multiplier, if any) specified on the CD
rate note and in the applicable pricing supplement.
"CD Rate" means, with respect to any CD Rate Interest Determination Date, the
rate on that date for negotiable certificates of deposit having the Index
Maturity specified in the applicable pricing supplement as published in
H.15(519) under the heading "CDs (Secondary Market)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the CD Rate will be the rate on that CD Rate Interest
Determination Date for negotiable certificates of deposit having the applicable
Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on that
Calculation Date, the CD Rate for that CD Interest Determination Date shall be
calculated by the Calculation Agent as follows:
Price Range Dividends
------------------------ Paid Per
High Low Share
--------- --------- -----------
1996
First Quarter ................. 29 1/2 26 1/8 .39
Second Quarter ................ 28 5/8 25 1/2 .39
Third Quarter ................. 28 5/8 25 .40
Fourth Quarter ................ 28 3/4 25 3/4 .40
1997
First Quarter ................ 28 26 1/2 .40
Second Quarter ............... 27 24 3/4 .40
Third Quarter ................ 28 1/16 26 .41
Fourth Quarter ............... 34 5/16 25 13/16 .41
1998
First Quarter ................ 34 1/8 29 3/4 .41
Second Quarter ............... 32 15/16 29 1/4 .41
Third Quarter ................ 31 5/8 30 5/8 .42
(through July 17, 1998)
The book value per share of our common stock at March 31, 1998 was $ 19.57. The
last reported sale priceCD Rate will be calculated as the average of the common stocksecondary market offered
rates, as of 10:00 A.M., of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in New York selected by the Calculation Agent for
negotiable certificates of deposit of major United States money market banks
with a remaining maturity closest to the Index Maturity specified in the
applicable pricing supplement in a denomination of $5,000,000.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
FEDERAL FUNDS EFFECTIVE RATE NOTES
Each federal funds effective rate note will bear interest at the rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
and/or Spread Multiplier, if any) specified on
12
the federal funds effective rate note and in the applicable pricing supplement.
"Federal Funds Effective Rate" means, with respect to any Federal Funds
Effective Interest Determination Date, the rate on such date for Federal Funds
as published in H.15(519) prior to 11:00 A.M. under the heading "Federal Funds
(Effective)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 11:00 A.M. on the
Calculation Date, then the Federal Funds Effective Rate will be the rate on that
Federal Funds Effective Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Federal Funds Effective Rate for that Federal Funds
Effective Interest Determination Date will be calculated by the Calculation
Agent as follows:
The Federal Funds Effective Rate will be the average of the rates, as of 11:00
A.M. on that date, for the last transaction in overnight Federal Funds arranged
by three leading brokers of federal funds transaction in New York Stock Exchangeselected by
the Calculation Agent.
(c) Finally, if fewer than three brokers are quoting as mentioned above, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
LIBOR NOTES
Each LIBOR note will bear interest at the rate (calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any) specified on July 17, 1998 was $31 3/8.
5the LIBOR
note and in the applicable pricing supplement.
LIBOR will be determined by the Calculation Agent as follows:
(a) With respect to any LIBOR Interest Determination Date, LIBOR will be
determined by either:
(1) the average of the offered rates for deposits of not less than
$1,000,000 in U.S. dollars having the Index Maturity specified in the applicable
pricing supplement, beginning on the second Business Day immediately after that
date, that appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time,
on that date, if at least two offered rates appear on the Reuters Screen LIBO
Page; or
(2) the rate for deposits in U.S. dollars having the Index Maturity
designated in the applicable pricing supplement, beginning on the second London
Business Day immediately after such date, that appears on the Telerate Page 3750
as of 11:00 A.M., London time, on that date.
If neither Reuters Screen LIBO Page nor Telerate Page 3750 is specified in the
applicable pricing supplement, LIBOR will be determined as if Telerate Page 3750
had been specified.
In the case where (1) above applies, if fewer than two offered rates appear on
the Reuters Screen LIBO Page, or, in the case where (2) above applies, if no
rate appears on the Telerate Page 3750, LIBOR for that date will be determined
as follows:
(b) LIBOR will be determined based on the rates at approximately 11:00
A.M., London time, on that LIBOR Interest Determination Date at which deposits
of not less than $1,000,000 in U.S. dollars having the applicable Index Maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank
13
DESCRIPTIONmarket selected by the Calculation Agent that in the Calculation Agent's
judgment is representative for a single transaction in such market at such time
(a "Representative Amount"). The offered rates must begin on the second Business
Day immediately after that LIBOR Interest Determination Date.
The Calculation Agent will request the principal London office of each such bank
to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR for such date will be the average of such quotations.
(c) If fewer than two quotations are provided, LIBOR for that date will be the
average of the rates quoted at approximately 11:00 A.M., New York City time, on
such date by three major banks in New York, selected by the Calculation Agent.
The rates will be for loans in U.S. dollars to leading European banks having the
specified Index Maturity beginning on the second Business Day after that date
and in a Representative Amount.
(d) Finally, if fewer than three banks are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
TREASURY RATE NOTES
Each Treasury rate note will bear interest at the rate (calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any)
specified on the Treasury rate note and in the applicable pricing supplement.
"Treasury Rate" means, with respect to any Treasury Interest Determination Date,
the rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable pricing
supplement as published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) by 9:00 A.M. on the applicable
Calculation Date, the rate will be the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the United
States Department of the Treasury.
(b) If the results of the auction of Treasury bills having the applicable Index
Maturity are not published in H.15(519) by 9:00 A.M., or otherwise published or
reported as provided above by 3:00 P.M., on the Calculation Date, or if no
auction is held in a particular week, then the Treasury Rate shall be calculated
by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the average of the secondary market bid rates as of
approximately 3:30 P.M. on the Treasury Interest Determination Date, of three
leading primary United States government securities dealers in New York selected
by the Calculation Agent for the issue of Treasury bills with a remaining
maturity closest to the specified Index Maturity.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the period will be the same as the rate of interest in
effect for the prior interest reset period.
CMT RATE NOTES
Each CMT rate note will bear interest at the rate (calculated with reference to
the
14
CMT Rate and the Spread or Spread Multiplier, if any) specified on such CMT rate
note and in the applicable pricing supplement.
"CMT Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page under the caption "... Treasury
Constant Maturities.. Federal Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.," under the column for the applicable Index Maturity
designated in the applicable pricing supplement for:
(1) if the Designated CMT Telerate Page is 7055, the rate for the
applicable CMT Interest Determination Date; or
(2) if the Designated CMT Telerate Page is 7052, the week, or the month,
as applicable, ended immediately preceding the week in which the CMT Interest
Determination Date occurs.
The following procedures will occur if the rate cannot be set as described
above:
(a) If no page is specified in the applicable pricing supplement and on the face
of such CMT Rate Note, the Designated CMT Telerate Page shall be 7052, for the
most recent week. If such rate is no longer displayed on the relevant page, or
if it is not displayed by 3:00 P.M. on the related Calculation Date, then the
CMT Rate will be the Treasury constant maturity rate for the applicable Index
Maturity as published in the relevant H.15 (519).
(b) If that rate is no longer published in H.15(519), or is not published by
3:00 P.M. on the related Calculation Date, then the CMT Rate for such CMT
Interest Determination Date will be the Treasury constant maturity rate for the
applicable Index Maturity (or other United States Treasury rate for such Index
Maturity for that CMT Interest Determination Date with respect to such Interest
Reset Date) as may then be published by either the Federal Reserve Board or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519).
(c) If that information is not provided by 3:00 P.M. on the related Calculation
Date, then the CMT Rate for that CMT Interest Determination Date will be
calculated by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity, based on the average of the
secondary market closing offer side prices as of approximately 3:30 P.M. on that
CMT Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in New York selected by the Calculation Agent. These dealers
will be selected from five such Reference Dealers.
The Calculation Agent will eliminate the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Note") with an original
maturity of approximately the applicable Index Maturity and a remaining term to
maturity of not less than such Index Maturity minus one year.
If two Treasury Notes with an original maturity as described in the preceding
sentence have remaining terms to maturity equally close to the applicable Index
Maturity, the quotes for the Treasury Note with the shorter remaining term to
maturity will be used.
(d) If the Calculation Agent cannot obtain three such Treasury Note quotations,
the CMT Rate for that CMT
15
Interest Determination Date will be calculated by the Calculation Agent as
follows:
The rate will be calculated as a yield to maturity based on the average of the
secondary market offer side prices as of approximately 3:30 P.M. on that CMT
Interest Determination Date of three Reference Dealers in New York selected by
the Calculation Agent using the same method described above, for Treasury Notes
with an original maturity of the number of years that is the next highest to the
applicable Index Maturity with a remaining term to maturity closest to such
Index Maturity and in an amount of at least $100 million.
If three or four (and not five) of the Reference Dealers are quoting as
described above, then the CMT Rate will be based on the average of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated.
(e) Finally, if fewer than three Reference Dealers are quoting as mentioned, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
EVENT OF COMMON STOCK
Below isDEFAULT
"Event of Default" means any of the following:
- - failure to pay the principal of (or premium, if any, on) any note of a
brief summaryseries when due and payable;
- - failure to pay for 30 days any interest on any note of your rights asany series;
- - failure to perform any other requirements in the notes, or in the
indenture in regard to such notes, for 60 days after notice; or
- - certain events of insolvency.
An Event of Default for a particular series of notes does not necessarily mean
that an Event of Default has occurred for any other series of notes issued under
the indenture. If an Event of Default shall have occurred and be continuing the
Trustee or the holders of our common stock. You can
findat least 25% of the principal amount of the notes of
the series affected by an Event of Default may require us to repay the entire
principal of the notes of such series immediately. Subject to certain
conditions, this requirement may be rescinded by the holders of at least a
complete descriptionmajority in aggregate principal amount of these rights in our Charter. See Where You Can
Find More Information.
Dividend Rights
We pay dividends on our common stock when declared by our Boardthe notes of Directors.
However, wethe series.
The Trustee must first pay all dividends (and any redemption payments) due on
our preference stock before paying common stock dividends.
Voting Rights
General
Holders of our common stock are entitled to one vote per share on all matters on
which shareholders vote. They have unlimited and exclusive voting rights except
as noted below. Cumulative voting forwithin 90 days after a default occurs, notify the election of Directors is not
permitted.
Preference Stockholder Rights Affecting Common Stockholder Rights
IF WE FAIL TO PAY DIVIDENDS
If we do not pay full dividends on our preference stock for four consecutive
quarters, holders of
the preference stock will vote on all matters on which
shareholders vote, until we pay all the dividends owed.
ON EXTRAORDINARY MATTERS
Owners of two-thirdsnotes of the preference stock must consentseries of the default if we have not remedied it (default is
defined to amend our Charter
to:
- - create any shares of stock ranking priorinclude the events specified above without the grace periods or
equalnotice). The Trustee may withhold notice to the existing preference
stock asholders of such notes of any
default (except in the payment of principal or interest) if it in good faith
considers such withholding in the interest of the holders. We are required to
dividendsfile an annual certificate with the Trustee, signed by an officer, about any
default by us under any provisions of the indenture.
Subject to the provisions of the indenture relating to its duties in case of
default, the Trustee shall be under no obligation to exercise any of its rights
or distributionpowers under the indenture at the request, order or direction of assets,any holders
unless such holders offer the Trustee reasonable indemnity. Subject to the
provisions for indemnification, the holders of a majority in principal amount of
the notes of any series may direct the time, method and place of conducting any
proceedings for any remedy available to, or - - substantially adversely affectexercising any trust or power
conferred on, the contractTrustee with respect to such notes.
16
MODIFICATION OF INDENTURE
Under the indenture, our rights and obligations and the rights of the holders of
any notes may be changed. Any change requires the consent of the holders of not
less than 66 2/3% in aggregate principal amount of the outstanding preference stock.
Liquidation
Our common stock hasnotes of all
series to be affected, voting as one class. However, no par value. If we liquidate, dissolve or wind up our
affairs, you will share equally in any assets remaining after fullchanges to the terms of
payment of liabilities to our creditors and $100 per share plus accrued dividends due to
holdersprincipal or interest, or reducing the percentage required for
changes, is effective against any holder without its consent.
CONSOLIDATION, MERGER OR SALE
We may not merge or consolidate with any corporation or sell substantially all
of our preference stock.
General
You doassets as an entirety unless:
- - we are the continuing corporation or the successor corporation expressly
assumes the payment of principal, and premium, if any, and interest on the
notes and the performance and observance of all the covenants and
conditions of the indenture binding on us; and
- - we, or the successor corporation, are not have any preemptiveimmediately after the merger,
consolidation, or special rights to purchase any sharessale in default in the performance of common stock we may issue at a later date. We have not issued any securities
convertible into shares of our common stock. In addition, as holders of common
stock, you have no redemption, conversioncovenant or
sinking fund rights. When issued to
you,condition in the common stock will be legally issued, fully paid and nonassessable.indenture.
PLAN OF DISTRIBUTION
The common stock willWe may sell the notes (a) through agents; (b) through underwriters or dealers;
or (c) directly to one or more purchasers.
BY AGENTS
Notes may be sold on a continuing basis through the agent, Salomon
Smith Barney.agents designated by us. The
agent agreesagents agree to use itstheir reasonable efforts to solicit purchases for the period
of its appointment. Wetheir appointment under the terms of an agency agreement between the agents
and us.
For each note and in total, we have set out below the offering price, the
compensation we will receive allpay the agents and the proceeds from the sale of the stock, after paying the agent a commission of no more than
5 cents per share andwe will receive, before
deducting expenses of approximately $150,000.$295,000. The amount of the agents'
commissions depends on the maturity of the note they sell.
PER NOTE
--------
Public Offering Price 100%
Agents' Commissions 0.125% -.75%
----------------
Proceeds to BGE
(before expenses) 99.875% - 99.25%
TOTAL
-----
Public Offering Price $200,000,000
Agents' Commissions $250,000 - $1,500,000
---------------------
Proceeds to BGE
(before expenses) $199,750,000 - $198,500,000
The Agents will not be obligated to make a market in the notes. We cannot
predict the amount of trading or liquidity of the notes.
BY UNDERWRITERS
If underwriters are used in the sale, the notes will be acquired by the
underwriters for their own account. The underwriters may resell the notes 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
obligations of the underwriters to purchase the notes will be subject to certain
conditions. The underwriters will be obligated to purchase all the notes of the
series offered if any of the notes are purchased. Any initial public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
17
DIRECT SALES
We may also sell notes directly. In addition, we have agreedthis case, no underwriters or agents would
be involved.
GENERAL INFORMATION
In connection with sales by an agent or an underwritten offering, the SEC rules
permit the underwriters or agents to reimburseengage in transactions that stabilize the
agentprice of the notes. These transactions may include purchases for certainthe purpose of
its expensesfixing or maintaining the price of the notes.
The underwriters or agents may create a short position in the notes in
connection with the saleoffering. That means they sell a larger principal amount of
the common stock.
The agent will sell the sharesnotes than is shown on the New York Stock Exchange,cover page of the prospectus or on any other
exchange on which the shares are listed, at prevailing market prices through (a)
ordinary brokers' transactionsapplicable
pricing supplement. If they create a short position, the underwriters or (b) in block transactions. In block
transactions, the agentagents
may purchase allnotes in the open market to reduce the short position.
If the underwriters or a portionagents purchase the notes to stabilize the price or to
reduce their short position, the price of the shares as principal
for its own account and resell them.notes could be higher than it
might be if they had not made such purchases. The agentunderwriters or agents make no
representation or prediction about any effect that the purchases may also sellhave on the
shares in a fixed price offering. If this happens,
we will sell shares to the agent for its own account at a negotiated price
(which is related to the prevailing market price), and the agent may form a
group of dealers to participate with it
6
in reselling the shares to you. For this type of sale, we will prepare and
distribute a prospectus supplement which will describe the offering price and
the number of shares sold and customary distributors' or sellers' commissions
payable, if any.
The agent may also sell the shares by conducting a special offering or exchange
distribution in accordance with the rules of the stock exchange on which the
shares are listed. We would also prepare and distribute a prospectus supplement
for these types of offerings.
General Information
Dealersnotes.
Underwriters, dealers, and agents that participate in the distribution of the
common stocknotes may be underwriters as defined in the Securities Act of 1933 (1933 Act)(the "Act"),
and any discounts or commissions received by them from us and any profit on the
resale of the common stocknotes by them may be treated as underwriting discounts and
commissions under the 1933 Act.
We may have an agreementagreements with the agentunderwriters, dealers and agents to indemnify
it fromthem against certain civil liabilities, including liabilities under the 1933 Act, or
to contribute with respect to payments which the agentunderwriters, dealers or agents
may be required to make.
We may have similar
agreements withUnderwriters, dealers and other agents.
Dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their business.
In connection with any fixed price offering, exchange distribution, or special
offering, the selling group, which would include dealers who enter into an
underwriting agreement with us, may engage in transactions which stabilize,
maintain or otherwise affect the market price of the common stock. Specifically,
the selling group may overallot in connection with the offering, creating a
short position. In addition, they may bid for, and purchase, the securities in
the open market to cover shorts or to stabilize the price of the common stock.
Finally, the selling group may reclaim selling concessions allowed for
distributing common stock in the offering, if the selling group repurchases
previously distributed common stock in the market to cover overallotments or to
stabilize the price of the common stock. Any of these activities may stabilize
or maintain the market price of the common stock above independent market
levels. The selling group is not required to engage in any of these activities,
and may stop any of the activities at any time.businesses.
LEGAL OPINIONOPINIONS
One of our lawyers, will issue an opinion regarding certain legal matters in
connection with the common stocknotes offered pursuant to this prospectus. Cahill Gordon &
Reindel ( a(a partnership including a professional corporation), New York, NY will
issue an opinion for any underwriters, dealers or agents. Cahill Gordon &
Reindel will rely on the opinion of our lawyers as to matters of Maryland law
and the applicability of the Public Utility Holding Company Act of 1935.
EXPERTS
PricewaterhouseCoopers LLP, independent accountants, audited our annual
financial statements and schedules incorporated by reference in this prospectus
and elsewhere in the registration statement. These documents are incorporated by
reference herein in reliance upon the authority of PricewaterhouseCoopers LLP as
experts in accounting and auditing.
718
================================================================================
You should rely only onGLOSSARY
Set forth below are definitions of some of the information incorporated by reference or providedterms used in this
prospectus. BGE has not authorized anyone else to provide you with
different information. Neither BGE nor the agent is making an offer of these
securities inProspectus.
"BUSINESS DAY" means any state where the offerday other than a Saturday or Sunday that (a) is
not permitted. You should not assume
thata day on which banking institutions in Baltimore, Maryland, or in New York,
New York, are authorized or obligated by law or executive order to be closed,
and (b) with respect to LIBOR Notes only, is a day on which dealings in deposits
in U.S. dollars are transacted in the information in this prospectus is accurate as of any date other thanLondon interbank market.
"CALCULATION AGENT" means the entity chosen by us to perform the duties
related to interest rate calculation and resets for floating rate notes.
"CALCULATION DATE" means the date on which the frontCalculation Agent
calculates an interest rate for a floating rate note, which will be one of this prospectus.
3,000,000 Shares
[GRAPHICthe
following:
"PRIME RATE" - tenth day after the related Prime Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"CD RATE" - tenth day after the related CD Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"CMT RATE" - tenth day after the related CMT Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"COMMERCIAL PAPER RATE" - tenth day after the related Commercial
Paper Rate Interest Determination Date or, if such day is not a
Business Day, the next Business Day.
"LIBOR" - the LIBOR Interest Determination Date.
"TREASURY RATE" - tenth day after the related Treasury Rate
Interest Determination Date or, if such day is not a Business Day, the
next Business Day.
"FEDERAL FUNDS EFFECTIVE RATE" - tenth day after the related
Federal Funds Effective Rate Interest Determination Date or, if such
day is not a Business Day, the next Business Day.
"COMPOSITE QUOTATIONS" means the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities," or any
successor publication, published by The Federal Reserve Bank of New York.
"DESIGNATED CMT TELERATE PAGE" means the display on the Dow Jones
Telerate Service on the page designated in the applicable pricing supplement and
on the face of such CMT Rate Note (or any other page as may replace such page on
that service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519).
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates," or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"INDEX MATURITY" means, with respect to a floating rate note, the period
to maturity of the note on which the interest rate formula is based, as
indicated in the applicable pricing supplement.
19
"INTEREST DETERMINATION DATE" means the date as of which the interest
rate for a floating rate note is to be calculated, to be effective as of the
following Interest Reset Date and calculated on the related Calculation Date
(except in the case of LIBOR which is calculated on the related LIBOR Interest
Determination Date). The Interest Determination Dates will be indicated in the
applicable pricing supplement and in the note.
"INTEREST RESET DATE" means the date on which a floating rate note will
begin to bear interest at the variable interest rate determined on any Interest
Determination Date. The Interest Reset Dates will be indicated in the applicable
pricing supplement and in the note.
"MONEY MARKET YIELD" is the yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a percentage
point) calculated in accordance with the following formula:
D X 360
Money Market Yield = -------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which interest is being calculated.
"REUTERS SCREEN LIBO PAGE" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on that service for the purpose of displaying London interbank
offered rates of major banks).
"REUTERS SCREEN USPRIMEONE PAGE" means the display designated as page
USPRIMEONE on the Reuters Monitor Money Rates Service (or such other page as may
replace the USPRIMEONE page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
"SPREAD" means the number of basis points specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"SPREAD MULTIPLIER" means the percentage specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"TELERATE PAGE 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits).
20
================================================================================
$200,000,000
[BGE LOGO OMITTED]
BALTIMORE GAS AND
ELECTRIC COMPANY
COMMON STOCK
-----------------------Medium-Term Notes
Series H
----------------------------------
PROSPECTUS
-----------------------
SALOMON SMITH BARNEY
__________________ , 1998(Once the registration statement
is effective, the date of the
Prospectus will be inserted here)
------------------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ItemITEM 14. Other Expenses of Issuance and Distribution.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee.............. $28,410$55,600
Services of Independent Accountants.............................. 25,000*
Listing Fees..................................................... 45,000*
Trustee Fees and Expenses........................................ 5,000*
Legal Fees and Expenses.......................................... 25,000*
Transfer Agent and Registrar Fees................................ 5,000*55,000*
Debt Securities Rating Fees...................................... 109,000*
Printing and Delivery Expenses................................... 10,000*
Miscellaneous Expenses........................................... 11,590*
----------15,400*
---------
Total............................................................ $150,000$295,000*
==========
--------------
* Estimated
ItemITEM 15. Indemnification of Directors and Officers.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following description of indemnification allowed under Maryland
statutory law is a summary rather than a complete description. Reference is made
to Section 2-418 of the Corporations and Associations Article of the Maryland
Annotated Code, which is incorporated herein by reference, and the following
summary is qualified in its entirety by such reference.
By a Maryland statute, a Maryland corporation may indemnify any
director who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative ("Proceeding") by reason of the fact
that he is a present or former director of the corporation and any person who,
while a director of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan ("Director"). Such indemnification may be against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with the Proceeding unless it is proven that (a)
the act or omission of the Director was material to the matter giving rise to
the Proceeding and (i) was committed in bad faith, or (ii) was the result of
active and deliberate dishonesty; or (b) the Director actually received an
improper personal benefit in money, property, or services; or (c) in the case of
any criminal action or proceeding, the Director had reasonable cause to believe
his act or omission was unlawful. However, the corporation may not indemnify any
Director in connection with a Proceeding by or in the right of the corporation
if the Director has been adjudged to be liable to the corporation. A Director or
officer who has been successful in the defense of any Proceeding described above
shall be indemnified against reasonable expenses incurred in connection with the
Proceeding. The corporation may not indemnify a Director in respect of any
Proceeding charging improper personal benefits to the Director in which the
Director was adjudged to be liable on the basis that personal benefit was
improperly
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received. Notwithstanding the above provisions, a court of appropriate
jurisdiction, upon application of the Director or officer, may order
indemnification if it determines that in view of all the relevant circumstances,
the Director or officer is fairly and reasonably entitled to indemnification;
however, indemnification with respect to any Proceeding by or in the right of
the corporation or in which liability was adjudged on the basis that personal
benefit was improperly received shall be limited to expenses. A corporation may
advance reasonable expenses to a Director under certain circumstances, including
a written undertaking by or on behalf of such Director to repay the amount if it
shall ultimately be determined that the standard of conduct necessary for
indemnification by the corporation has not been met.
A corporation may indemnify and advance expenses to an officer of the
corporation to the same extent that it may indemnify Directors under the
statute.
The indemnification and advancement of expenses provided or authorized
by this statute may not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a Director or officer may be entitled
under the charter, by-laws, a resolution of shareholders or directors, an
agreement or otherwise.
A corporation may purchase and maintain insurance on behalf of any
person who is or was a Director or officer, whether or not the corporation would
have the power to indemnify a Director or officer against liability under the
provision of this section of Maryland law. Further, a corporation may provide
similar protection, including a trust fund, letter of credit or surety bond, not
inconsistent with the statute.
Article V of the Company's Charter reads as follows:
"A director or officer of the corporation shall not be
personally liable to the corporation or its stockholders for monetary
damages except (i) to the extent that it is proved that the person
actually received an improper benefit or profit in money, property, or
services for the amount of the benefit or profit in money, property or
services actually received or (ii) to the extent that a judgment or
other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person's
action or failure to act was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. It is the intent of this Article that the liability of
directors and officers shall be limited to the fullest extent permitted
by the Maryland General Corporation Law, as amended from time to time.
Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director or officer of the corporation existing at the
time of such repeal or modification."
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Article IV of the Company's By-Laws reads as follows:
"Each person made or threatened to be made a party to an
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a
director or officer of the Company, or, at its request, is or was a
director or officer of another corporation, shall be indemnified by the
Company (to the extent indemnification is not otherwise provided by
insurance) against the liabilities, costs and expenses of every kind
actually and reasonably incurred by him as a result of such action,
suit or proceeding, or any threat thereof or any appeal thereon, but in
each case only if and to the extent permissible under applicable common
or statutory law, state or federal. The foregoing indemnity shall not
be inclusive of other rights to which such person may be entitled."
The Directors and officers of the Company are covered by insurance
indemnifying them against certain liabilities which might be incurred by them in
their capacities as such, including certain liabilities arising under the
Securities Act of 1933. The premium for this insurance is paid by the Company.
Also, see indemnification provisions in the Form of Sales Agency Agreement
which isand the Standard Purchase Provisions, both included in Exhibit 1(a) to this
Registration Statement.
ItemITEM 16. Exhibits.EXHIBITS.
Reference is made to the Exhibit Index filed as a part of this
Registration Statement.
ItemITEM 17. Undertakings.UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
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aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3, Form S-8, or
Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to Directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer or controlling person in
connection with the securities being registered, the
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Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Baltimore
Gas and Electric Company, the Registrant, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Baltimore, State of
Maryland on the 22nd21st day of July,October, 1998.
BALTIMORE GAS AND ELECTRIC COMPANY
(Registrant)
By: /s/ DavidDAVID. A. Brune
------------------BRUNE
------------------------------
David A. Brune, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
------------- ------- ------------SIGNATURE TITLE DATE
- ---------------------------- ------------------- ----------------
Principal executive officer
and director:
*C. H. Poindexter Chairman of the July 22,October 21, 1998
Board and Director
Principal financial
and accounting officer:
/s/ DavidDAVID A. BruneBRUNE Vice President July 22,October 21, 1998
- --------------------
David A. Brune
Directors:
* H. Furlong Baldwin
* Douglas L. Becker
* Beverly B. Byron
* J. Owen Cole
* Dan A. Colussy
* Edward A. Crooke
* James R. Curtiss Directors October 21, 1998
* Jerome W. Geckle Directors July 22, 1998
* Freeman A. Hrabowski, III
* Nancy Lampton
* Charles R. Larson
* George V. McGowan
* George L. Russell, Jr.
* Michael D. Sullivan
*By: /s/ DAVID A. BRUNE
---------------------------------
David A. Brune, -----------------------------------
David A. Brune, Attorney -in-FactAttorney-in-Fact
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EXHIBIT INDEX
Exhibit
Number
1EXHIBIT
NUMBER
- -------
1(a) - Form of Sales Agency Agreement, including Form of
Volume and Pricing ParametersAdministrative Procedures; and Form
of TermsPurchase Agreement, including Standard Purchase Provisions.
1(b) - Form of Interest Calculation Agency Agreement.
4(a)*- Charter of Baltimore Gas and Electric Company,
restatedIndenture dated as of August 16, 1996.July 1, 1985 between the Company and The Bank of
New York (successor to Mercantile-Safe Deposit and Trust Company),
Trustee(Designated as Exhibit 4(a) in File No. 2-98443 Registration
Statement).
4(b)*- Supplemental Indenture dated as of October 1, 1987 between the Company
and The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), Trustee (Designated as Exhibit 34(b) in the Form 10-Q for the quarter ended September
30, 1996,8-K dated November
14, 1996,13, 1987, File No. 1-1910.)
4(b)1-1910).
4(c)*- By-LawsSupplemental Indenture dated as of Baltimore GasJanuary 26, 1993 between the Company
and Electric Company, as
amendedThe Bank of New York (successor to January 23, 1998.Mercantile-Safe Deposit and Trust
Company), Trustee (Designated as Exhibit 3(b)4(c) in the Form 10-K for the year ended December 31,
1997,8-K dated January 29,
1993, File No. 1-1910.)
4(c)*1-1910).
4(d) - Form of Common Stock Certificate. (Designated as
Exhibit 4 toMedium-Term Note, Series H (Fixed Rate).
4(e) - Form S-3 Registration Statement,
Registration No. 33-57658.)of Medium-Term Note, Series H (Floating Rate).
5 - Opinion of Company CounselCounsel.
12* - Computation of Ratio of Earnings to Fixed Charges (Designated as to legality.Exhibit
12 in Form 10-Q for the quarterly period ended June 30, 1998, filed August
13, 1998, File No. 1-1910).
23(a) - Consent of Company Counsel(included in Exhibit 5).
23(b) - Consent of PricewaterhouseCoopers LLP, Independent Certified Public Accountants.
23(b) - Consent of Company Counsel (included in Exhibit 5).II-7
24 - Power of Attorney.
25 - Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1)
of The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), Trustee.
- ------------------
* Incorporated by reference.
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