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Registration No.AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCD.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PUBLIC SERVICE COMPANY OF NEW MEXICO
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)
New Mexico Alvarado Square 85-0019030
(State or Other Jurisdiction Albuquerque, New Mexico 87158 (I.R.S. Employer
of Incorporation or Organization) (505) 241-2700its charter)
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New Mexico 85-0019030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
M. H. Maerki
Senior Vice President and Chief Financial Officer
Public Service Company of New Mexico
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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JOHN R. LOYACK
Senior Vice President and Chief Financial Officer
PUBLIC SERVICE COMPANY OF NEW MEXICO
Alvarado Square
Albuquerque, New Mexico 87158
Tel: (505) 241-2700
Fax: (505) 241-2368
E-mail: jloyack@pnm.com
(Name, Address, Including Zip Code,address, including zip code, and Telephone Number, Including Area Code,telephone number, including area code,
of Agentagent for Service)
Copies To:
Charlesservice)
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It is respectfully requested that the Commission send copies of all orders,
notices and communications to:
CHARLES L. Moore, Esq. Michael F. Cusick, Esq.
KeleherMOORE, ESQ. TIMOTHY MICHAEL TOY, ESQ.
KELEHER & McLeod,MCLEOD, P.A. Winthrop, Stimson, Putnam & RobertsPILLSBURY WINTHROP LLP
414 Silver Avenue, S.W., 12th Floor One Battery Park Plaza
Albuquerque, New Mexico 8710287103 New York, New York 1000410004-1490
Tel: (505) 346-4646 Tel: (212) 858-1000
Fax: (505) 346-1345 Fax: (212) 858-1500
E-mail: clm@keleher-law.com E-mail: ttoy@pillsburywinthrop.com
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Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective.effective as determined
by market conditions and other factors.
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If the only securities being registered on this formForm are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /[ ]
If any of the securities being registered on this formForm 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/[X]
If this formForm is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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
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TITLE OF CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER UNIT(2) PRICE==============================
Proposed maximum aggregate Amount of
Title of each class of securities to be registered offering price (1)(2) ============================ ========================= ========================== ========================= ========================registration fee(3)
- ---------------------------------------------------------------- ---------------------------- ------------------------------
Senior Unsecured Notes $650,000,000 100% $650,000,000 $191,750unsecured notes..........................................
Preferred stock.................................................
- ---------------------------------------------------------------- ---------------------------- ------------------------------
Total $285,000,000 $23,056.50
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(1) Or the equivalentIncludes an indeterminate number or amount of any securities denominatedsenior unsecured notes and
preferred stock as may from time to time be issued at indeterminate prices
provided that in a foreign currency
or composite currency.
(2) Exclusiveno event will the aggregate initial price of accrued interest,all senior
unsecured notes and preferred stock sold under this registration statement
exceed $285,000,000. Also includes such additional principal amount of
senior unsecured notes, if any, issued with an original issue discount such
that the aggregate initial offering price of all such senior unsecured
notes discounted, together with the aggregate initial offering price of all
such other securities registered and estimatedissued hereunder, will not exceed
$285,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
contained herein will be used as a combined prospectus and will relate to
an aggregate of $500,000,000 principal amount of securities, consisting of
(a) the $285,000,000 aggregate principal amount of securities being
registered hereby and (b) $215,000,000 aggregate principal amount of
securities that are as yet unsold that previously were registered under the
Company's Registration Statement on Form S-3 (No. 333-53367) that was
initially filed with the Commission on May 22, 1998. This Registration
Statement constitutes Post-Effective Amendment No. 1 to Registration
Statement No. 333-53367, which shall become effective concurrently with
this Registration Statement in accordance with Section 8(c) of the
Securities Act of 1933.
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 THATWHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)8(a),
MAY DETERMINE.
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Information contained hereinThe information in this prospectus is subject to completion or amendment. Anot complete and may be changed. Public
Service Company of New Mexico may not sell these securities until the
registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomesCommission is
effective. This prospectus shallis not constitute an offer to sell or the
solicitation ofthese securities and it is
not soliciting an offer to buy nor shall there be any sale of these securities in any state in which suchjurisdiction where the
offer solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.is not permitted.
SUBJECT TO COMPLETION, DATED MAY 21, 1998JUNE 12, 2003
PROSPECTUS
$650,000,000$500,000,000
PUBLIC SERVICE COMPANY OF
NEW MEXICO
SENIOR UNSECURED NOTES
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Public Service Company of New Mexico (the "Company") intends to issueAND
PREFERRED STOCK
We may offer from time to time up to $650,000,000 (or the equivalentan aggregate of $500,000,000 of
our securities. We will provide specific terms of our securities, including
their offering prices, in foreign currencysupplements to this prospectus. The supplements may
also add, update or composite currency) aggregate principal amount of its senior unsecured notes
(the "SUNs"),change information contained in this prospectus. You should
read this prospectus and any supplements carefully before you invest.
We may offer these securities directly or if any SUNs are issued at an original issue discount, such
greater amount as shall result in net proceedsthrough underwriters, agents
or dealers. The supplements to the Company of $650,000,000,
whichthis prospectus will be offered to the public on terms determined by market conditions at
the time of sale. The SUNs may be issued in one or more series with the same or
various maturities at par, at a premium or with an original issue discount. When
particular SUNs are offered, a prospectus supplement (a "Prospectus
Supplement"), together with this Prospectus, will be delivered setting forthdescribe the terms of such SUNs,any
offering of these securities, including where applicable, the specific designation,
aggregateany underwriting arrangements. See also
"Plan of Distribution" on page 16 of this prospectus.
Our principal amount, denominations, maturity, rate of interest (or manner
of calculation thereof)executive offices are located at Alvarado Square,
Albuquerque, New Mexico, 87158 and time of payment thereof, any redemption provisions,
the initial public offering price and any other specific terms in connection
with the offering and sale of such SUNs. The SUNs will be unsecured and
unsubordinated obligations of the Company ranking equally with all existing and
future unsecured and unsubordinated obligations of the Company. Unless otherwise
specified in the applicable Prospectus Supplement, the SUNs will be represented
by global certificates (each, a "Registered Global SUN") registered in the name
of a nominee of The Depository Trust Company, New York, New York (the
"Depositary"). Beneficial interests in the SUNs will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
(with respect to participants' interests) and its participants. Except as
described in this Prospectus, SUNs in certificated form will not be issued in
exchange for Registered Global SUNs.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BYour telephone number is (505) 241-2700.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION ORNOR ANY STATE SECURITIES
COMMISSION NOR HAS THEAPPROVED OR DISAPPROVED OF THESE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACYDETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR ADEQUACY OF THIS
PROSPECTUS.COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of SUNs unless
accompanied by a Prospectus Supplement. The Company may sell SUNs through
underwriters, dealers or agents, or directly to one or more purchasers. The
applicable Prospectus Supplement will set forth the names of the underwriters,
dealers or agents, if any, the net proceeds to the Company from any such sale,
and any applicable commissions or discounts. See "Plan of Distribution" for
possible indemnification arrangements for underwriters, dealers, and agents.
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The date of this Prospectusprospectus is , 1998._________, 2003.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED INABOUT THIS PROSPECTUS
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE SUNS OFFERED HEREBY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company hasThis prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission, (the
"Commission")or SEC, using a "shelf"
registration process. Under this shelf registration process, we may sell the
securities or combinations of the securities described in this prospectus in one
or more offerings up to a total dollar amount of $500,000,000. This prospectus
provides you with a general description of the securities that we may offer.
Each time we offer any of the securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
For more detailed information about the securities, you can read the
exhibits to the registration statement. Those exhibits have been either filed
with the registration statement (togetheror with all amendments thereto,
the "Registration Statement") on Form S-3 under the Securities Act of 1933 (the
"Securities Act"), with respect to the SUNs offered hereby. This Prospectus,
filed as a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
In addition, certain documents filed by the Company with the Commission have
been incorporated herein by reference. See "Incorporation of Certain Information
by Reference." For further information regarding the Company and the SUNs
offered hereby, reference is made to the Registration Statement, including the
exhibits and schedules thereto and the documents incorporated herein by
reference. The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements andour other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549;
and at the regional offices of the Commission at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding reporting companies under the Exchange Act,
including the Company, at http://www.sec.gov. The Common Stock of the Company is
listed on the New York Stock Exchange. Reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 are hereby incorporated by reference.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the SUNs shall be deemed to beSEC filings incorporated by
reference in this Prospectus and be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporatedregistration statement.
Unless otherwise indicated or deemed to be incorporated by referenceunless the context otherwise requires,
all references in this Prospectus shall be deemedprospectus to be modified"PNM", "we", "our", "us", or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference, modifies or
replaces such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to:
Barbara Barsky, Vice President of Strategy, Analysis and Investor Relations,similar
references mean Public Service Company of New Mexico Alvarado Square, Albuquerque, New Mexico
87158, or by telephone at (505) 241-2477.
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THEand all of its
subsidiaries.
PUBLIC SERVICE COMPANY Public Service CompanyOF NEW MEXICO
We are a public service company that was organized under the laws of New Mexico (the "Company") was incorporated
in
the State of New Mexico in 1917 and has its principal offices at Alvarado
Square, Albuquerque, New Mexico 87158 (telephone number 505-241-2700). The
Company ison May 9, 1917. We are a public utility primarily
engaged in the generation, transmission, distribution, sale and salemarketing of
electricity and in the transmission, distribution and sale of natural gas within
the State of New Mexico.
In addition, in pursuing new
business opportunities, the Company is focusing on energyOur utility operations include electric services and utility related
activities under its Energy Services Business Unit. The Company is also
operating the City of Santa Fe's water system.
The total populationgas services.
Electric services consist of the area served by one or moredistribution, transmission and generation of
electricity for retail electric customers in New Mexico. Gas services include
the transportation and distribution of natural gas to end users. Our wholesale
operations consist of the Company's
utility servicesgeneration and sale of electricity into the wholesale
market based on three product lines which are long-term contracts, forward sales
and short-term sales.
Upon the completion of a one-for-one share exchange between us and PNM
Resources, Inc. on December 31, 2001, we became a wholly owned subsidiary of PNM
Resources, Inc.
Our executive offices are located at Alvarado Square, Albuquerque, New
Mexico 87158, and our telephone number is estimated(505) 241-2700.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports and other information with
the SEC. These SEC filings are available over the Internet at the SEC's web site
at http://www.sec.gov. You may also read and copy any document we file at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the
Public Reference Room and their copy charges. You may also inspect our SEC
reports and other information at the New York Stock Exchange, 20 Broad Street,
New York, New York 10005. We also maintain a website at www.pnm.com. Information
contained on our website does not constitute part of this prospectus.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus
the information we file separately with it, which means we may disclose
important information by referring you to those other documents. The information
we incorporate by reference is considered to be approximately 1.3 million,part of which 52.1%
livethis prospectus. Any
future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, until we
sell all of these securities will automatically update, replace and supersede
the information contained in this prospectus and in previously filed documents
incorporated by reference in this prospectus. This prospectus incorporates by
reference those future filings as well as the greater Albuquerque area.
Forfollowing documents that we have
filed previously with the SEC:
- - Annual Report on Form 10-K for the year ended December 31, 1997, the Company derived 63.6% of its
operating revenues from electric operations, 26.0% from natural gas operations
and 10.4% from energy services operations.
As of December 31, 1997, the Company employed 2,789 persons.
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SUMMARY FINANCIAL AND OPERATING INFORMATION
The following material is qualified in its entirety2002, as
updated by reference to thefinancial information incorporated herein by reference (as specified above). The selected
data presented below under the caption "Selected Earnings Statement Data" as of
the end of and for each of the yearsincluded in the five year periodCurrent Report on Form
8-K filed June 12, 2003.
- - Quarterly Report on Form 10-Q for the quarter ended DecemberMarch 31, 1997, are derived from2003.
- - Current Reports on Form 8-K dated April 10, 2003, April 22, 2003, May
29, 2003 and June 12, 2003.
You may request a copy of any of these this filings at no cost by
writing or telephoning us at the consolidated financial statements offollowing address:
Public Service Company of New Mexico
and subsidiaries, which financial statements have been
audited by Arthur Andersen LLP, independent public accountants. The
consolidated financial statements as of December 31, 1997 and 1996, and for each
ofc/o PNM Resources, Inc.
Investor Relations
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2477
You should rely only on the yearsinformation contained in, the three-year period ended December 31, 1997, and the report
thereon, areor incorporated
by reference elsewhere in, this Prospectus.prospectus and any prospectus supplement. We have not, and
any underwriters, agents or dealers have not, authorized anyone else to provide
you with different information. We are not, and any underwriters, agents or
dealers are not, making an offer of these securities or soliciting offers to buy
these securities in any state where the offer or solicitation is not permitted.
You should not assume that the information contained in this prospectus and any
prospectus supplement is accurate as of any date other than the date on the
front of such document or that the information incorporated by reference in this
prospectus is accurate as of any date other than the date of the document
incorporated by reference.
RATIO OF EARNINGS TO FIXED CHARGES
The selected unaudited data presented below under the caption "Selected Earnings
Statement Data" and "Capitalization"following table shows our ratio of earnings to fixed charges for
the three-month periods ended March 31,
1997 and 1998, and as of March 31, 1998, are derived from the unaudited
consolidated financial statements of Public Service Company of New Mexico and
its subsidiaries, which Arthur Andersen LLP have reviewed in accordance with
professional standards for a review of such interim financial information.indicated:
Three Months
Ended
March 31, Year Ended December 31, --------- -----------------------Ended
2002 2001 2000 1999 1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Dollars in thousands)March 31, 2003
SELECTED EARNINGS
STATEMENT DATA:
Electric, Gas, Water,
Energy Services Revenues $ 329,764 $ 298,822 $ 1,135,267 $ 883,386 $ 808,465 $ 904,711 $ 873,878
Operating Expenses ........ 297,485 262,129 1,011,222 757,367 695,077 753,633 740,594
Earnings (Loss) Before
Interest Charges and
Income Taxes ............ 47,681 53,924 183,927 167,781 184,289 191,776 (32,741)
Interest Charges, Net ..... 13,787 14,234 56,214 54,707 57,934 70,587 85,823
Income Taxes (Benefit)(1) . 12,680 14,794 46,718 40,494 50,793 40,871 (57,078)
Net Income (Loss) from
Continuing Operations ... 21,214 24,896 80,995 72,580 75,562 80,318 (61,486)
ELECTRIC SALES (MWH) ......... 3,383,876 2,858,554 13,320,542 10,981,516 8,619,878 9,315,084 8,822,004
GAS THROUGHPUT -
DECATHERMS (000'S)(2) ...... 32,540 32,099 84,610 100,096 109,594 132,071 135,332
RATIO OF EARNINGS TO FIXED
CHARGES(3) ................. 2.14 2.30 2.05 1.94 1.99 1.83 0.27(4)2.13 3.65 3.05 2.40 2.19 1.64
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table shows our ratio of earnings to combined
fixed charges and preferred stock dividends for the periods indicated:
As ofThree Months
Year Ended December 31, Ended
2002 2001 2000 1999 1998 March 31, 1998
--------------------
Amount Percent
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CAPITALIZATION: (in thousands)2003
Short-Term Debt........................................................... $ 243,860 14.8%
Long-Term Debt............................................................ 574,344 34.7
Cumulative Preferred Stock, without
Mandatory Redemption Requirements....................................... 12,800 0.8
Common Shareholders' Equity............................................... 822,112 49.7
---------- -----
Total Capitalization(5)......................................... $1,653,116 100.0%
========== =====
2.12 3.63 3.03 2.38 2.18 1.63
- ------------
(1) Income Taxes (Benefit) calculated on earnings (loss) from continuing
operations.
(2) On June 30, 1995, the Company sold substantially all of the gas gathering
and processing assets. Gas Throughput data for 1995, 1996, 1997 and the
first three months of 1997 and 1998 reflect the effects of such sale.
(3) For purposes of computing the Ratio of Earnings to Fixed Charges, earnings
have been calculated by adding back the provision for income taxes and
fixed charges. Fixed charges include total interest charges (without
reduction for the allowance for borrowed funds used during construction),
the interest portion of all rents and certain payments under a purchase
power contract.
(4) The less than 1:1 ratio for 1993 was primarily the result of the write-down
of certain assets resulting from the stipulation filed with the New Mexico
Public Utility Commission recommending that electric retail rates be
reduced by $30 million. The fixed charge coverage deficiency aggregated
approximately $119 million for 1993.
(5) Total capitalization does not include the present value of the Company's
lease obligations for Palo Verde Nuclear Generating Station ("PVNGS") Units
1 and 2 and Eastern Interconnection Project as debt.
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USE OF PROCEEDS
On April 27, 1998, the Company requested the New Mexico Public Utility
Commission ("NMPUC") approval to issue up to $435 million principal amount of
SUNs to provide funds to refinance the lease debt associated with the sale and
leaseback portions of the Company's interests in PVNGS Units 1 and 2 ("Lease
Debt"). As of May 1, 1998, the Company held $277 million principal amount of
Lease DebtExcept as an investment with the remaining $151 million principal amount of
Lease Debt held by the public in the form of Lease Obligation Bonds. The net
proceeds from such $435 million principal amount of SUNs would be applied in
accordance with NMPUC authorization, including the repayment of short-term debt.
Issuance of additional SUNs would require additional regulatory approval, and
the net proceeds from the issuance of any additional SUNs are expected to be
applied to general corporate purposes, except as may otherwise be set forth in a prospectus supplement, the
applicable Prospectus Supplement.proceeds from the sale of these securities may be used to retire outstanding
debt, to finance a portion of our capital expenditures and for other general
corporate purposes.
DESCRIPTION OF SUNSSENIOR UNSECURED NOTES
GENERAL
The following description sets forth certain general terms and
provisions of our senior unsecured notes, or SUNs. When we offer SUNs in the
future, a prospectus supplement will explain the particular terms of those SUNs,
and the extent to which any of these general provisions will not apply.
The SUNs will be issuedour unsecured and unsubordinated obligations ranking
equally with all of our existing and future unsecured and unsubordinated
obligations. We may issue the SUNs from time to time in one or more series,
under an Indenture (the "Indenture")the indenture dated as of August 1, 1998 between the Companyus and JPMorgan Chase
Bank, formerly known as The Chase Manhattan Bank (Trustee). This indenture, as
trustee (the "Trustee"). The
following description of certainit may be amended and supplemented from time to time, is referred to in this
prospectus as the Indenture.
We have summarized selected provisions of the Indenture below. You
should read this summary together with the Indenture and the officer's
certificates or other documents establishing the SUNs summarizesfor a complete
understanding of the material terms thereof but does not purportprovisions that may be important to be complete,you. You should also
read this prospectus and such summariesany applicable prospectus supplement before you make
any investment decision. The following descriptions of the SUNs and the
Indenture are subjectqualified by reference to the detailed provisionsIndenture, which is filed as an
exhibit to the registration statement of which this prospectus is a part.
References to certain sections of the Indenture to which
reference is hereby made, including the definition of certainare included in parentheses.
Whenever particular provisions or defined terms used herein
and those terms made a part ofin the Indenture are referred to
under this "Description of Senior Unsecured Notes," such provisions or defined
terms are incorporated by reference herein. The Indenture is qualified under the
Trust Indenture Act of 1939. You should refer to the Trust Indenture Act of 1939
(the "Trust Indenture Act"), and for other information regardingprovisions that apply to the SUNs.
The Indenture is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Numerical references in parentheses below are
to sections in the Indenture. Wherever particular sections or defined terms of
the Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. Capitalized terms that are used and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
GENERAL
The Indenture provides for the issuance from time to time of SUNs by
the Company in an unlimited aggregate principal amount by specification in an
indenture supplemental to the Indenture or in a Board Resolution, or in an
Officer's Certificate pursuant to one or more indentures supplemental to the
Indenture or a Board Resolution. (Section 3.01) The SUNs may be issued in one or
more series, each of which series may be issued in one or more Tranches.
Reference is made to the applicable Prospectus Supplementprospectus supplement relating to the
particularany series of SUNs being offered
thereby forwill include specific terms relating to that offering. These terms will include
any of the following terms of the SUNs:
(i)that apply to that series:
- - the title of the SUNs ofSUNs;
- - the series, which shall distinguish the SUNs of
such series from the SUNs of all other series; (ii) any limit upon the aggregatetotal principal amount of the SUNs of such series that may be authenticated and
delivered under the Indenture; (iii) the Person or Persons (without specific
identification) to whom interest on SUNs of such series, or any Tranche thereof,
shall be payable on any Interest Payment Date, if other than the Persons in
whose names such SUNs (or one or more Predecessor SUNs) are registered at the
close of business on the Regular Record Date for such interest; (iv)SUNs;
- - the date or dates on which the principal of the SUNs of such series, or any Tranche thereof,
iswill be payable
or any formula or other method or other means by which such date or
dates shalland how it will be determined, by reference to an index or other fact or event
ascertainable outside of the Indenture or otherwise (without regard to any
provisions for redemption, prepayment, acceleration, purchase or extension); (v)paid;
3
- - the rate or rates at which the SUNs of such series, or any Tranche thereof,
shallwill bear interest, if any, (includingand how
the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates at which such
SUNs shall bear interest prior to Maturity, and, if applicable, the rate or
rates at which overdue premium or interest shall bear interest, if any), or any
formula or other method or other means by which such rate or rates shallwill be determined, by reference to an index or other fact or event ascertainable
outside of the Indenture or otherwise;determined;
- - the date or dates from which such
interest shall accrue;on the SUNs will accrue, the
interest payment dates on which interest will be paid, and the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date, if any,record
dates for the interest payable
on such SUNs on any Interest Payment Date; (vi)payments;
- - the right, if any, to extend the interest payment periods for the SUNs
and the duration of suchthe extension;
(vii)- - the place or places at which or methods by which (A)where payments will be made;
- - whether we have the principal of and premium, if any,
and interest, if any, on SUNs of such series, or any Tranche thereof, shall be
payable, (B) registration of transfer of SUNs of such series, or any Tranche
thereof, may be effected, (C) exchanges of SUNs of such series, or any Tranche
thereof, may be effected and (D) notices and demandsoption to or upon the Company in
respect ofredeem the SUNs of such series, or any Tranche thereof, and the Indenture
may be served; the SUN Registrar and any Paying Agent or Agents for such series
or any Tranche thereof; and, if such is the case, that the principal of such SUNs
shall be
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7
payable without presentment or surrender thereof; (viii) the period or periods
within which, the price or prices at which andso, the terms and conditions upon
which any SUNs of
such series, or any Tranche thereof, may be redeemed, in whole
or in part, at the option of the Company and, if other than by a Board
Resolution, the manner in which any election by the Company to redeem such SUNs
shall be evidenced; (ix) the obligation, if any, of the Company to redeem or
purchase any SUNs of such series, or any Tranche thereof, pursuant toour redemption option;
- - any sinking fund or analogousother provisions or at the optionoptions held by holders of the
Holder (as defined
herein) thereof andSUNs that would obligate us to repurchase or otherwise redeem the periodSUNs;
- - if the SUNs will be issued in denominations other than $1,000;
- - any index or periods withinformula used for determining principal, premium or
interest;
- - the currency in which the price or prices at
which and the terms and conditions upon which any SUNs of such series, or any
Tranche thereof, shallpayments will be redeemed or purchased, in whole or in part, pursuant
to such obligation; (x)made if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which SUNs of such series, or any Tranche
thereof, shall be issuable; (xi) if the amount of principal of or any premium or
interest on any SUNs of such series, or any Tranche thereof, may be determined
with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined to the extent not established pursuant to clause (v)
of this paragraph; (xii) if other than the currency of the United States
of
America, the currency, currencies or currency units in which the principal of or
any premium or interest on any SUNs of such series, or any Tranche thereof,
shall be payabledollars, and the manner of determining the equivalent thereofof those amounts
in the
currencyUnited States dollars;
- - if payments may be made on any of the United States of America for any purpose; (xiii) if the
principal ofSUNs, at our election or any premium or interest on any SUNs of such series, or any
Tranche thereof, is to be payable, at the
holder's election, of the Company or the Holder
thereof, in one or more currencies ora currency units other than that or those in which suchthe SUNs are
stated to be payable, then the currency currencies or currency
units in which the principal of or any premium or interest on such SUNs as to
which such election isthose payments may be
made, shall be payable, the periods within which and the terms and conditions upon which suchof the election is to be made and the amount somanner of
determining those amounts;
- - the portion of the principal payable (or the manner in which such amount shall be determined); (xiv)upon acceleration of maturity, if
other than the entire principal amount thereof, the portion of the principal amount of
any SUNs of such series, or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof; (xv)principal;
- - if the principal amount payable aton the Stated Maturity of any SUNs of such series, or any Tranche
thereof,maturity date will not be determinable
as of anyon one or more dates prior to the Stated Maturity,maturity date, the amount which shallwill
be deemed to be thesuch principal amount or the manner of suchdetermining it;
- - whether the provisions described under "Discharge, Defeasance and
Covenant Defeasance" will apply to the SUNs;
- - whether the SUNs will be issuable as global securities and, if so, the
securities depositary;
- - any changes or additions to the events of any such date for any purposedefault under the Indenture
or under such
SUNs, including the principal amount thereof which shall be due and payable upon
any Maturity other than the Stated Maturitychanges or which shall be deemedadditions to be
Outstanding (as defined herein) as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be the principal
amount shall be determined); (xvi) if applicable, that the SUNs of such series,
or any Tranche thereof, in whole or any specified part, shall be defeasible
pursuant to the Defeasance provisions of the Indenture or that the SUNs of such
series, but not Tranches thereof alone, shall be defeasible pursuant to the
Covenant Defeasance provisions of the Indenture or both such sections and, if
other than by a Board Resolution, the manner in which any election by the
Company to defease such SUNs shall be evidenced; (xvii) if applicable, that any
SUNs of such series, or any Tranche thereof, shall be issuable in whole or in
part in the form of one or more Global SUNs and, in such case, the respective
Depositaries for such Global SUNs, the form of any legend or legends which
shall be borne by any such Global SUN and any circumstances in which any such
Global SUN may be exchanged in whole or in part for SUNs registered, and any
transfer of such Global SUN in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global SUN or a nominee
thereof; (xviii) any addition to or change in the Events of Default which
applies to any SUNs of such series, or any Tranche thereof, and any change in
the right of the Trustee or the requisite Holders of such SUNs to declare the
principal amount thereof due and payable pursuant toour covenants under the Indenture; (xix) any
addition to or change in the covenants set forth in the Indenture which applies
to SUNs of such series, or any Tranche thereof; and
(xx)- - any other terms of such series, or any Tranche thereof (which terms shallthe SUNs not be inconsistent with the provisionsterms of the
Indenture). (SectionIndenture.
(See Section 3.01)
All SUNs of any one series or, if issued in Tranches thereof, any such
Tranche, shallwill be substantially identical except as to
denomination and except as may otherwise be determined in the manner provided
for in the Indenture. With
respect to SUNs of a series subject to a Periodic Offering, the indenture
supplemental to the Indenture or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such supplemental indenture or
Board Resolution, as the case may be, may provide general terms or parameters
for SUNs of such series and provide either that the specific terms of SUNs of
such series, or any Tranche thereof, shall be specified in a Company Order or
that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by the Indenture.
(Section(See Section 3.01)
The Indenture doesSUNs are not containsecured by any restriction on the payment of
dividendsproperty or except as set forthassets and represent our
unsecured debt obligations. As discussed below under " -- Certain Covenants, - RestrictionRestrictions on Liens
and - Restrictions on Sale and Lease-Back Transactions," any financial
covenants. The SUNs will be unsubordinatedthe Indenture contains
certain limitations on our ability to create liens and unsecured obligationsenter into sale and
leaseback transactions. Such limitations do not afford holders of the CompanySUNs
protection in the event of a highly
4
leveraged or other transaction involving us that may adversely affect the
holders of the SUNs. The Indenture does not limit our ability to pay dividends
or limit our ability to incur other unsecured and unsubordinated debt ranking
equally with all of our existing and future unsecured and unsubordinated
obligations. However, debt to capital requirements in certain of our financial
instruments and unsecured obligationsregulatory agreements would limit the amount of additional debt
we could issue.
SUNs may be sold at a substantial discount below their principal
amount. You should consult the applicable prospectus supplement for a
description of certain special United States federal income tax considerations
which may apply to SUNs sold at an original issue discount or denominated in a
currency other than United States dollars.
GLOBAL SUNS
We may issue some or all of the Company. Claims of Holders of SUNs as book-entry securities. Any such
book-entry securities will be effectively subordinated to the claimsrepresented by one or more fully registered global
securities. We will register each global security with or on behalf of holders of secured debt of the Company
with respect to the collateral securing
6
8
such claims. Currently the Company has outstanding $111,000,000 of first
mortgage bonds secured by the Company's owned interest in PVNGS; no future bonds
may be issued under the mortgage securing such bonds.
REGISTERED GLOBAL SUNS
Unless otherwise specifieda
securities depositary identified in the applicable Prospectus Supplement, the
Depositary will act as securities depository for the SUNs and the SUNs will be
issued only as Registered Global SUNs registered in the name of Cede & Co. (the
Depositary's partnership nominee). Unless otherwise specified in the applicable
Prospectus Supplement, one or more Registered Global SUNs will be issued for the
SUNs representing the aggregate principal amount of such series of SUNs andprospectus supplement. Each
global security will be deposited with the Depositary. If, however,securities depositary or its nominee
or a custodian for the aggregate principal amountsecurities depositary.
As long as the securities depositary or its nominee is the registered
holder of any issue exceeds $200 million, one certificatea global security representing SUNs, that person will be considered
the sole owner and holder of the global security and the SUNs it represents for
all purposes. Except in limited circumstances, owners of beneficial interests in
a global security:
- - may not have the global security or any of the SUNs it represents
registered in their names;
- - may not receive or be entitled to receive physical delivery of
certificated SUNs in exchange for the global security; and
- - will not be considered the owners or holders of the global security or
any of the SUNs it represents for any purposes under the SUNs or the
Indenture.
We will make all payments of principal and any premium and interest on
a global security to the securities depositary or its nominee as the holder of
the global security. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of securities in definitive
form. These laws may impair the ability to transfer beneficial interests in a
global security.
Ownership of beneficial interests in a global security will be limited
to institutions having accounts with the securities depositary or its nominee,
which are called "participants" in this discussion, and to persons that hold
beneficial interests through participants. When a global security representing
SUNs is issued, the securities depositary will credit on its book entry,
registration and transfer system the principal amounts of SUNs the global
security represents to the accounts of its participants. Ownership of beneficial
interests in a global security will be shown only on, and the transfer of those
ownership interests will be effected only through, records maintained by:
- - the securities depositary, with respect to each $200 million of principal amountparticipants' interests; and
an additional certificate will be
issued- - any participant, with respect to any remaining principal amount of such issue.
The Depositary is a limited-purpose trust company organized underinterests the New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositaryparticipant holds securities that its participants (the "Direct
Participants") deposit with the Depositary. The Depositary also facilitates the
settlement among Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Direct Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The Depositary 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. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly (the "Indirect Participants," and together with the Direct
Participants, the "Participants"). The rules applicable to the Depositary and
its Participants are on file with the Commission.
Purchases of SUNs within the Depositary's system must be made by or
through Direct Participants, which will receive a credit for the SUNs on the
Depositary's records. The ownership interest of each actual purchaser of each
SUN (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interest in the SUNs are to be accomplished by entries
made on the books of Participants acting on
behalf of Beneficial Owners.
Beneficial Ownersother persons.
Payments to owners of beneficial interests held through participants
will not receive certificates representing their ownership
interestbe the responsibility of those participants. The securities depositary may
from time to time adopt various policies and procedures
5
governing payments, transfers, exchanges and other matters relating to
beneficial interests in SUNs except in the event that usea global security. None of the book-entry systemfollowing will have any
responsibility or liability for any aspect of the securities depositary's or any
participant's records relating to beneficial interests in a global security
representing SUNs, for payments made on account of those beneficial interests or
for maintaining, supervising or reviewing any records relating to those
beneficial interests:
- - PNM;
- - the Trustee; or
- - an agent of either of them.
REDEMPTION
We will set forth any terms for the SUNs is discontinued.
To facilitate subsequent transfers, all SUNs deposited by Direct
Participants with the Depositary are registered in the name of Cede & Co. The
depositredemption of the SUNs within a
prospectus supplement. Unless we indicate differently in a prospectus
supplement, the Depositary and their registration in the name of
Cede & Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the SUNs; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such SUNs
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be governedredeemable upon notice by arrangements among them, subjectmail to any statutory or regulatory
requirements as may be in effect from timethe holders
between 30 and 60 days prior to time.
Redemption notices shall be sent to Cede & Co.the redemption date. If less than all of the
SUNs of aany series or Tranche are beingto be redeemed, the Depositary's practice is to
determine by lotTrustee will select the amount of the interest of each Direct Participant in such
series or TrancheSUNs to be
redeemed. NeitherIn the Depositary nor Cede & Co.absence of any provision for selection, the Trustee will consent or vote with respectchoose
a method of random selection that it deems fair and appropriate. (See Sections
11.03 and 11.04)
The SUNs will cease to bear interest on the SUNs. Under its usual procedures,redemption date. We will
pay the Depositary mails an omnibus proxy
(an "Omnibus Proxy") to the Participants as soon as possible after
7
9
the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accountsredemption price and any accrued interest once the SUNs are creditedsurrendered
for redemption. (See Section 11.06) If only part of a SUN is redeemed, the
Trustee will deliver to you a new SUN of the same series for the remaining
portion without charge. (See Section 11.07)
We may make any redemption, at our option, conditional upon the receipt
by the paying agent or agents, on or prior to the date fixed for redemption, of
money sufficient to pay the redemption price. If the paying agent or agents have
not received the money by the date fixed for redemption, we will not be required
to redeem the SUNs. (See Section 11.04)
PAYMENT
Except as may be provided in the prospectus supplement, interest, if
any, on each SUN payable on each interest payment date will be paid to the
person in whose name the SUN is registered as of the close of business on the
regular record date (identifiedfor the interest payment date. Interest payable at maturity,
however, will be paid to the person to whom the principal is paid. If there has
been a default in the payment of interest on any SUN, the defaulted interest may
be paid to the holder of that SUN as of the close of business on a date to be
fixed by the Trustee, which will be between 10 and 15 days prior to the date we
proposed for payment of the defaulted interest, or in any other manner permitted
by any securities exchange on which that SUN may be listed, if the Trustee finds
it practicable. (See Section 3.07)
REGISTRATION OF TRANSFER AND EXCHANGE
Unless otherwise specified in a listing attached toprospectus supplement, the Omnibus Proxy).
Principal, premium, if any,transfer of
the SUNs may be registered, and interest payments on the SUNs may be exchanged for other SUNs of the
same series, of authorized denominations and with the same terms and principal
amount, at the corporate trust office of the Trustee. We may change the place
for registration of transfer and exchange of the SUNs and may designate
additional places for registration and exchange. Unless otherwise provided in
the prospectus supplement, no service charge will be made to Cede & Co., as nominee of the Depositary. The Depositary's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive payment on
such payment date. Payments by participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers held in bearer formany transfer or
registered
in "street-name," and will be the responsibility of such Participant and not of
the Depositary or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
redemption premium, if any, and interest, if any, to Cede & Co., as nominee of
the Depositary, is the responsibility of the Company or the respective trustees
(with funds furnished by the Company). Disbursement of such payments to Direct
Participants is the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants. Registered Global SUNs will settle in immediately available funds
in the secondary trading market. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
SUNs.
The Depositary may discontinue providing its services as securities
depository with respect to the SUNs at any time by giving reasonable notice to
the Company. Under such circumstances and in the event that a successor
securities depository is not obtained, SUNs certificates are required to be
printed and delivered. In addition, the Company may decide to discontinue use of
the system of book-entry transfers through the Depositary (or a successor
securities depository). In that event, SUNs certificates will be printed and
delivered.
The Company will not have any responsibility or obligation to
Participants or the persons for whom they act as nominees with respect to the
accuracy of the records of the Depositary, its nominee or any Direct or Indirect
Participant with respect to any ownership interest in the SUNs, or with respect
to payments to or providing of notice for the Direct Participants, the Indirect
Participants or the Beneficial Owners.
So long as Cede & Co. is the registered owner of the SUNs, as nominee
of the Depositary, references herein to Holders of the SUNs shall mean Cede &
Co. or the Depositary and shall not mean the Beneficial Ownersexchange of the SUNs. The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from the Depositary. Neither
the Company, the Trustee nor the underwriters, dealersHowever, we may require payment to cover any
6
tax or agents takes
responsibilityother governmental charge that may be imposed. We will not be required to
execute or to provide for the accuracyregistration of transfer of, or completeness thereof.
CERTAIN COVENANTS
The following covenants applythe exchange of:
- - any SUN during a period of 15 days prior to all series,giving any notice of
redemption; or
- - any Tranches thereof,SUN selected for redemption except the unredeemed portion of SUNs:
Restrictions on Liens.any
SUN being redeemed in part.
(See Section 3.05)
RESTRICTIONS ON LIENS
The Indenture provides that so long as any SUNs are outstanding, the Companywe
will not issue, assume, or guarantee any Debt (as defined herein)below) secured by any
mortgage, security interest, pledge, or lien (herein referred to as a "mortgage")(Mortgage) of or upon any of our
stock or on any Operating Property (as defined herein)below), owned as of the Company, whether owned at the date of
the Indenture or thereafter acquired, without in any such case effectivelyalso securing the Outstandingoutstanding SUNs
(as defined herein) (together with, if(so long as the Company shall so
determine, any other Debt of or guaranteed by the Company ranking senior to, or
equally with, the SUNs)is so secured) equally and ratably with suchthe Debt.
This covenant shalllimitation does not apply in the case of any Debt secured by:
(i) mortgages- - Mortgages on any property or shares of stock existing at the time we
acquired them;
- - Mortgages on any property or shares of acquisition thereof; (ii) mortgages on propertystock of a
corporation existing at the time such corporation isan entity with which we
consolidated or merged into or consolidated
with the Company,which transfers or at the time of a sale, lease, or other disposition of the
properties of such corporation or a division thereof as an entiretyleases all or
substantially as an entiretyall of its properties to the Company, provided that such mortgage as a
result of such merger, consolidation, sale, lease, or other disposition is not
extended to property owned by the Company immediately prior thereto; (iii)
mortgagesus;
- - Mortgages on any property to secure all or part of the cost of
acquiring, constructing, developing, or substantially repairing,
altering, or improving suchthe property, or to secure indebtedness incurred
to provide funds for any such
purposeof these purposes or for the reimbursement of
funds previously expended for any such purpose,
provided such mortgages areof these purposes if created or assumed contemporaneously with, or within eighteen (18) months after, such acquisition or completion of construction,
development, or substantial repair, alteration, or improvement or within six (6)
months thereafter pursuant
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10
to a
commitment for financing arranged with a lender or investor within such
eighteen (18) monthcertain period;
(iv) mortgages- - Mortgages in favor of the United States of America or any State
thereof, or any department, agency, or instrumentality or political
subdivision of the United States of America or any State thereof, or
for the benefit of holders of securities issued by any such entity, to
secure any Debt incurred for the purpose of financing all or any part
of the purchase price or the cost of constructing, developing or
substantially repairing, altering, or improving the property subject to
such mortgages; (v) mortgagesMortgages;
- - Mortgages on any property (x) which, at any time subsequent to January
1, 1985 through the date of the Indenture, was leased to the Company,us, or (y)
pursuant to the terms of any lease to the Companyus in effect at any time
subsequent to January 1, 1985 through the date of the Indenture, title
to which would not have been vested in the Companyus (assuming suchthat the lease
remained in effect on the date of determination as suchthe lease was in
effect immediately prior to the date of the Indenture);
or
(vi) any- - the extension, renewal or replacement (or successive extensions, renewals,
or replacements), in whole or in part, of any mortgageMortgage referred to
in the
foregoing clauses (i) to (v), inclusive;above; provided, however, that the principal amount of Debt so secured thereby
and not otherwise authorized by saidthe previous clauses, (i)
to (v), inclusive, shall not exceed
the principal amount of Debt, plus any premium or fee payable in
connection with any such extension, renewal, or replacement, so secured
at the time of such extension, renewal, or replacement.
(Section 10.05(a)) Notwithstanding the foregoing, so long as any SUNs are Outstanding, the Companyoutstanding, we
may issue, assume, or guarantee Debt, or permit to exist Debt, secured by
mortgages which would otherwise be subject to the foregoing restrictions up to
an aggregate principal amount that, together with the principal amount of all of
our other Debt, of the Company secured by mortgages (other than mortgages permitted by the
Indenture that would otherwise be subject to the foregoing restrictions) and the
Value (as defined below) of all Sale and Lease-BackLease-
7
Back Transactions (as defined below) in existence at such time (other than
certain Sale and Lease-Back Transactions specified in the Indenture), does not
exceed at the time the greater of ten percent (10%) of Net Tangible Assets (as
defined herein)below) or ten percent (10%) of Capitalization. (Section 10.05(b))Capitalization (as defined below).
Taking into account the
$111,000,000 of outstanding first mortgage bonds, the Company currently could
secure debt of up to approximately $102,000,000 without also equally and ratably
securing the SUNs.
Restrictions on Sale and Lease-Back Transactions.(See Section 10.05)
RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS
The Indenture provides that so long as any SUNs are Outstanding, the Companyoutstanding, we
will not enter into any Sale and Lease-Back Transaction with respect to any
Operating Property if in any case, the commitment by or on behalf of the purchaser is or was obtained more than eighteen (18)18
months after the later of (i) the completion of the acquisition, construction,
or development of suchthe Operating Property or (ii) the placing in operation of suchthe
Operating Property or of suchthe Operating Property as constructed, developed, or
substantially repaired, altered, or improved, unless (x) the Company would beunless:
- - we are entitled pursuant to the Indenture to issue, assume, or
guarantee Debt secured by a mortgage on such Operating Property without
equally and ratably securing the SUNsSUNs; or
(y) the Company would
be- - we are entitled pursuant to the Indenture, after giving effect to suchthe
Sale and Lease-Back Transaction, to incur $1.00 of additional Debt
secured by mortgagesmortgages; or
(z) the Company shall- - we apply or cause to be applied,applied:
- in the case of a sale or transfer for cash, an amount
equal to the net proceeds thereof (but not in excess
of the net book value of suchthe Operating Property at
the date of such sale or transfer) and,, or,
- in the case of a sale or transfer otherwise than for
cash, an amount equal to the fair value (as
determined by the Boardour board of Directors)directors) of the
Operating Property so leased, to the retirement,
within one hundred eighty (180)180 days after the effective date of suchthe Sale
and Lease-Back Transaction, of our Debt
of the Company ranking
senior to, or equally with, the SUNs; provided, however,
thatSUNs. However, the
amount to be applied to suchthe retirement of Debt shallwill
be reduced by an amount equal to the principal
amount, plus any premium or fee paid in connection
with any redemption in accordance with the terms of
Debt voluntarily retired by us within the Company within such one hundred eighty (180) day180-day
period, excluding retirement pursuant to mandatory
sinking fund or prepayment provisions and payments at
maturity.
(Section 10.10)
The Company's existing sale and lease-back
transactions regarding Units 1 and 2 of PVNGS and certain transmission
facilities, office buildings and other equipment are excluded from this
provision of the Indenture.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless: (i) the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a Person organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental to the Indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium, and interest on all the SUNs and the performance or observance
of every covenant of the Indenture on the part of the Company to be
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performed or observed; (ii) immediately after giving effect to such transaction
and treating any indebtedness which becomes an obligation of the Company as a
result of such transaction as having been incurred by the Company at the time of
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with the Indenture and that all conditions precedent therein
provided for relating to such transaction have been complied with. (Section
8.01)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the SUNs of
any series are: (i) the Company defaults in the payment of any interest upon any
SUN of that series when it becomes due and payable, and continuance of such
default for a period of 60 days; (ii) the Company defaults in the payment of the
principal of or any premium on any SUN of that series at its Maturity; (iii) the
Company defaults in the deposit of any sinking fund payment, when and as due by
the terms of a SUN of that series; (iv) the Company defaults in the performance
of or breaches any covenant or warranty of the Company in the Indenture (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this paragraph specifically dealt with or which has expressly been
included in the Indenture solely for the benefit of series of SUNs other than
that series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of a majority in
principal amount of the Outstanding SUNs of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the Indenture, unless the
Trustee, or the Trustee and Holders of a principal amount of SUNs of such series
not less than the principal amount of SUNs the Holders of which gave such
notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or the
Trustee and the Holders of such principal amount of SUNs, as the case may be,
shall be deemed to have agreed to an extension of such period if corrective
action is initiated by the Company within such period and is being diligently
pursued; (v) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; (vi) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action by the Board
of Directors; or (vii) any other Event of Default provided with respect to SUNs
of that series. (Section 5.01)
The Indenture provides that if an Event of Default with respect to SUNs
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of a majority in principal amount of the
Outstanding SUNs of that series may declare the principal amount of all the SUNs
of that series (or, if any SUNs of that series are Original Issue Discount SUNs,
such portion of the principal amount of such SUNs as may be specified by the
terms thereof) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable; provided, however, that if an Event of Default shall have occurred and
be continuing with respect to more than one series of SUNs, the Trustee or the
Holders of not less than a majority in
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principal amount of the Outstanding SUNs of all such series, considered as one
class (and not the Holders of the SUNs of any one of such series), may make such
declaration of acceleration. (Section 5.02)
At any time after such a declaration of acceleration with respect to
SUNs of any series has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee, the related Event of Default and
its consequences will be automatically waived, resulting in an automatic
rescission and annulment of the acceleration of the SUNs if (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay (A) all overdue
interest on all SUNs of that series, (B) the principal of (and premium, if any,
on) any SUNs of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such SUNs, (C) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such SUNs, and (D) all amounts due to the Trustee as
provided in the Indenture; and (ii) any other Event of Default with respect to
SUNs of that series, other than the non-payment of the principal of SUNs of that
series which have become due solely by such declaration of acceleration, has
been cured or waived as provided in the Indenture. No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereon.
(Section 5.02)
The Holders of not less than a majority in principal amount of the
Outstanding SUNs of any series may on behalf of the Holders of all the SUNs of
such series waive any past default under the Indenture with respect to such
series and its consequences, except a default (i) in the payment of the
principal of or any premium or interest on any SUN of such series, or (ii) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended by supplemental Indenture without the consent of the Holder of each
Outstanding SUN of such series affected, provided, however, that if any such
default shall have occurred and be continuing with respect to more than one such
series of SUNs, the Holders of a majority in aggregate principal amount of the
Outstanding SUNs of all such series, considered as one class, shall have the
right to waive such default, and not the Holders of the SUNs of any one such
series. Upon any such waiver, such default shall cease to exist, and any and all
Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of the Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. (Section
5.13)
If an Event of Default shall have occurred and be continuing in respect
of a series of SUNs, the Holders of a majority in principal amount of the
Outstanding SUNs of such series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
SUNs of such series; provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one series of SUNs, the
Holders of a majority in aggregate principal amount of the Outstanding SUNs of
all such series, considered as one class, shall have the right to make such
direction, and not the Holders of the SUNs of any one of such series; and
provided, further, that (i) such direction shall not be in conflict with any
rule of law or with the Indenture; (ii) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction, and
(iii) subject to the provisions of the Indenture the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability. (Section
5.12)
The Indenture provides that no Holder of any SUN of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to the Indenture, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (i) such Holder has previously given written
notice to the Trustee of a continuing Event of Default with respect to the SUNs
of that series; (ii) the Holders of not less than a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class,
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee under the Indenture;
(iii) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request; (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(v) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class.
(Section 5.07)
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that upon Company Request the Indenture shall
cease to be of further effect (except as to any surviving rights of registration
of transfer or exchange of SUNs therein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of the Indenture, when (i) either (A)
all SUNs theretofore authenticated and delivered (other than (x) SUNs which have
been destroyed, lost or stolen and which have been replaced or paid and (y) SUNs
for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for cancellation;
or (B) all such SUNs not theretofore delivered to the Trustee for cancellation
(x) have become due and payable, or (y) will become due and payable at their
Stated Maturity within one year, or (z) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (B)(x), (y) or (z) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
of making the following payment, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such SUNs, money in an amount
sufficient to pay and discharge the entire indebtedness on such SUNs not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of SUNs which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be; (ii) the Company has paid or caused to be paid all other sums
payable under the Indenture by the Company; and (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent therein provided for relating to the satisfaction
and discharge of the Indenture have been complied with. Notwithstanding the
satisfaction and discharge of the Indenture, the obligations of the Company to
compensate and reimburse the Trustee, the obligations of the Company to any
Authenticating Agent and the obligations under the Indenture of the Trustee to
apply the trust money and make repayments, shall survive. If the Company shall
have paid or caused to be paid the principal of and premium, if any, and
interest on any SUN, as and when the same shall have become due and payable or
the Company shall have delivered to the Trustee for cancellation any outstanding
SUN, such SUN shall cease to be entitled to any benefit under the Indenture.
(Section 4.01)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Defeasance) applied to any SUNs or the SUNs of any
series, or any Tranche thereof, as the case may be, the Company shall be deemed
to have been discharged from its obligations with respect to such SUNs as
described in this paragraph on and after the date the conditions as described in
the second paragraph below are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such SUNs and to have
satisfied all its other obligations under such SUNs and the Indenture insofar as
such SUNs are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of such SUNs to receive, solely from the
trust fund described in the second paragraph below and as more fully set forth
in the Indenture, payments in respect of the principal of and any premium and
interest on such SUNs when payments are due, (ii) the Company's obligations with
respect to such SUNs under the sections of the Indenture dealing with temporary
notes; registration and registration of transfer and exchange; mutilated,
destroyed, lost and stolen notes; maintenance of office or agency; or money for
notes payments to be held in trust, and with respect to compensation and
reimbursement of the Trustee, (iii) the rights, powers, trusts, duties and
immunities of the Trustee under the Indenture and (iv) the provisions described
in this paragraph. Subject to compliance with the Article in the Indenture
regarding Defeasance and Covenant Defeasance, the Company may exercise its
option to have the provisions described in this paragraph (Defeasance) applied
to any SUNs notwithstanding the prior exercise of its option to have the
provisions described in the paragraph below (Covenant Defeasance) applied to
such SUNs. (Section 13.02)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Covenant Defeasance) applied to the SUNs or the
SUNs of any series, but not to Tranches thereof alone, as the case may be, (i)
the Company shall be released from its obligations under the sections of the
Indenture dealing with restrictions on liens, maintenance of properties and
restrictions on sale and lease-back transactions, and any covenants for the
benefit of the Holders of such SUNs provided pursuant to the Article of the
Indenture setting forth covenants and the sections of the Indenture dealing with
entering into supplemental indentures without the consent of Holders for the
purpose of adding covenants, securing the SUNs and establishing the form or
terms of SUNs of any series or Tranche and the section of the Indenture
specifying Events of Default and (ii) the occurrence of any event specified in
the section of the Indenture
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dealing with default in the performance, or breach, of any covenant or warranty
of the Company (with respect to specified sections of the Indenture) shall be
deemed not to be or result in an Event of Default with respect to such SUNs as
provided in the Indenture and described in this paragraph on and after the date
the conditions described in the paragraph below are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such SUNs, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified section of the Indenture (to the extent so specified in the
case of default in the performance or breach of any covenant or warranty of the
Company), whether directly or indirectly by reason of any reference elsewhere
therein to any such section or by reason of any reference in any such section to
any other provision in the Indenture or in any other document, but the remainder
of the Indenture and such SUNs shall be unaffected thereby. (Section 13.03)
The Indenture provides that the following shall be the conditions to
the application of the Defeasance and Covenant Defeasance provisions, as the
case may be: (i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such SUNs, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination of (A) and (B), in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee to pay and discharge, the principal of
and any premium and interest on such SUNs on the respective Stated Maturities or
on any Redemption Date established as described in clause (ix) below, in
accordance with the terms of the Indenture and such SUNs. As used in this
paragraph, "U.S. Government Obligation" means (x) any security which is (1) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (2) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (1) or (2), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt; (ii) in the event of an election to have the
provisions of the Indenture relating to Defeasance apply to any SUNs or the SUNs
of any series, or any Tranche thereof, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date of the Indenture, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such SUNs will
not recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such SUNs and
will be subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit, Defeasance and discharge
were not to occur; (iii) in the event of an election to have the provision of
the Indenture relating to Covenant Defeasance apply to the SUNs or the SUNs of
any series, but not Tranches thereof alone, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such SUNs will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such SUNs and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur; (iv) the Company shall have
delivered to the Trustee an Officers' Certificate to the effect that neither
such SUNs nor any other SUNs of the same series, as the case may be, if then
listed on any securities exchange, will be delisted as a result of such deposit;
(v) no event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to such SUNs or any other SUNs shall have occurred
and be continuing at the time of such deposit or, with regard to certain
bankruptcy Events of Default, at any time on or prior to the 90th day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day); (vi) such Defeasance or Covenant
Defeasance shall not cause the Trustee to have a conflicting interest within the
meaning of the Trust Indenture Act (assuming all SUNs are in default within the
meaning of such Act); (vii) such Defeasance or
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Covenant Defeasance shall not result in a breach or violation of, or constitute
a default under, any other agreement or instrument to which the Company is a
party or by which it is bound; (viii) such Defeasance or Covenant Defeasance
shall not result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment Company Act of 1940
unless such trust shall be registered under such Act or exempt from registration
thereunder; (ix) if the SUNs are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of such
redemption shall have been duly given pursuant to the Indenture or provision
therefor satisfactory to the Trustee shall have been made; and (x) the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such
Defeasance or Covenant Defeasance have been complied with. (Section 13.04)
MODIFICATION OF THE INDENTURE
The Indenture provides that without the consent of any Holders, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental to the
Indenture, in form satisfactory to the Trustee, for any of the following
purposes: (i) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in the
Indenture and in the SUNs; or (ii) to add to the covenants of the Company or
other provisions for the benefit of the Holders of all or any series of SUNs, or
any Tranche thereof, (and if such covenants are to be for the benefit of less
than all series of SUNs or Tranches thereof, stating that such covenants are
expressly being included solely for the benefit of such series or Tranche or
Tranches) or to surrender any right or power conferred in the Indenture upon the
Company; or (iii) to add any additional Events of Default for the benefit of the
Holders of all or any series of SUNs, or any Tranche or Tranches thereof (and if
such additional Events of Default are to be for the benefit of less than all
series of SUNs or any Tranches thereof, stating that such additional Events of
Default are expressly being included solely for the benefit of such series or
Tranche or Tranches); or (iv) to add to or change any of the provisions of the
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of SUNs in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance of
SUNs in uncertificated form; or (v) to change or eliminate any provision of the
Indenture or to add any new provision to the Indenture; provided, however, that
if such change, elimination or addition shall adversely affect the interests of
the Holders of SUNs of any series, or a Tranche thereof, Outstanding on the date
of such indenture supplemental to the Indenture in any material respect, such
change, elimination or addition shall become effective (a) with respect to such
series or Tranche only pursuant to the provisions described in the succeeding
paragraph or (b) when no SUN of such series or Tranche remains Outstanding; or
(vi) to secure the SUNs; or (vii) to establish the form or terms of SUNs of any
series or Tranche as permitted by the Indenture; or (viii) to evidence and
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the SUNs of one or more series and to add to or change
any of the provisions of the Indenture as shall be necessary to provide for or
facilitate the administration of the trusts thereunder by more than one Trustee;
or (ix) to cure any ambiguity, to correct or supplement any provision in the
Indenture which may be defective or inconsistent with any other provision
thereof, or to make any other changes to the provisions of the Indenture or to
add other provisions with respect to matters or questions arising under the
Indenture, provided that such other changes or additions shall not adversely
affect the interests of the Holders of SUNs of any series in any material
respect. Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the Indenture or at any time
thereafter shall be amended and (A) if any such amendment shall require one or
more changes to any provisions of the Indenture or the inclusion therein of any
additional provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise, the Indenture
shall be deemed to have been amended so as to conform to such amendment to the
Trust Indenture Act, and the Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental thereto to effect or evidence
such changes or additional provisions; or (B) if any such amendment shall permit
one or more changes to, or the elimination of, any provisions of the Indenture
which, at the date of the execution and delivery of the Indenture or at any time
thereafter, are required by the Trust Indenture Act to be contained therein, the
Indenture shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental thereto to evidence such amendment
thereof. (Section 9.01)
The Indenture also contains provisions providing that with the consent
of the Holders of not less than a majority in aggregate principal amount of the
SUNs of all series then Outstanding, considered as one class, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution,
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and the Trustee may enter into one or more indentures supplemental to the
Indenture for the purpose of adding any provisions to, or changing in any manner
or eliminating any of the provisions of, the Indenture; provided, however, that
if there shall be SUNs of more than one series Outstanding under the Indenture
and if a proposed supplemental indenture shall directly affect the rights of the
Holders of SUNs of one or more, but less than all, of such series, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding SUNs of all series so directly affected, considered as one class,
shall be required; and provided further, that if the SUNs of any series shall
have been issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of SUNs of one or
more, but less than all, of such Tranches, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding SUNs of all
Tranches so directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall: (i) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any SUN, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or reduce the amount of the principal of an Original
Issue Discount SUN or any other SUN which would be due and payable upon a
declaration of acceleration of the Maturity thereof, or change the coin or
currency (or other property) in which any SUN or any premium or interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), without, in any such case, the
consent of the Holder of such SUN, or (ii) reduce the percentage in principal
amount of the Outstanding SUNs of any series or Tranche, the consent of whose
Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with any provision of the
Indenture or of any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the consent of the
Holder of such SUN, or (iii) modify any of the provisions described in this
paragraph and the sections of the Indenture regarding waiver of past defaults
and waiver of certain covenants with respect to the SUNs of any series or any
Tranche thereof, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding SUN affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to the "Trustee". (Section
9.02)
A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of SUNs or one or more Tranches
thereof, or which modifies the rights of the Holders of SUNs of such series or
Tranches with respect to such covenant or other provision, shall be deemed not
to affect the rights under the Indenture of the Holders of SUNs of any other
series or Tranche. It shall not be necessary for any Act of Holders under the
section of the Indenture described in this paragraph to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
Act shall approve the substance thereof. A waiver by a Holder of such Holder's
right to consent described in the preceding paragraph shall be deemed to be a
consent of such Holder. (Section 9.02)
INFORMATION CONCERNING THE TRUSTEE
The Trustee under the Indenture will be The Chase Manhattan Bank. The
Company maintains normal banking arrangements with The Chase Manhattan Bank. The
Chase Manhattan Bank also serves as trustee under an indenture for the holders
of certain other senior unsecured notes of the Company, (ii) serves as trustee
for the holders of two series of bonds secured by, among other things, the
Company's payments under its PVNGS leases (these bonds were issued by a party
unaffiliated with the Company), as well as trustee under the lease indentures
related to such leases, and (iii) has a commitment to lend the Company up to $50
million under a revolving credit agreement. The Chase Manhattan Bank also acts
as administrative agent and a letter of credit issuing bank under the revolving
credit agreement, and an affiliate of The Chase Manhattan Bank acted as arranger
under such revolving credit agreement. In addition, affiliates of The Chase
Manhattan Bank are the lessors with respect to three leases with the Company
relating to the sale and leaseback of portions of Unit 1 and Unit 2 of PVNGS.
Subject to the provisions in the Indenture and the applicable
provisions of the Trust Indenture Act: (i) the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties; (ii) any request or direction of the Company
mentioned in the Indenture
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17
shall be sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided in the Indenture, and any resolution of the Board
of Directors shall be sufficiently evidenced by a Board Resolution; (iii)
whenever in the administration of the Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action under the Indenture, the Trustee (unless other evidence be
specifically prescribed in the Indenture) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate; (iv) the Trustee may consult with
counsel of its selection, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it under the Indenture in good faith
and in reliance thereon; (v) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by the Indenture at the
request or direction of any Holder pursuant to the Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction; (vi) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall (subject
to applicable legal requirements) be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; (vii) the Trustee
may execute any of the trusts or powers under the Indenture or perform any
duties thereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it under the Indenture; and
(viii) except as otherwise provided in the Indenture the Trustee shall not be
charged with knowledge of any Event of Default with respect to the SUNs of any
series for which it is acting as Trustee unless either (A) a Responsible Officer
of the Trustee shall have actual knowledge of the Event of Default, or (B)
written notice of such Event of Default shall have been given to the Trustee by
the Company, any other obligor on the SUNs or by any Holder of such SUNs.
(Section 6.03)
The Indenture contains a covenant that the Company will file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such information, documents and
reports to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants thereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates). (Section
7.04)
CERTAIN DEFINITIONS
The term "Debt""Capitalization," as definedused above, means the total of all the
following items appearing on, or included in, our consolidated balance sheet:
(i) liabilities for indebtedness maturing more than twelve (12) months from the
Indenturedate of determination; and (ii) any common stock, preferred stock, premium on
capital stock, capital surplus, capital in excess of par value, and retained
earnings (however the foregoing may be designated), less, to the extent not
otherwise deducted, the cost of shares of our capital stock held in our
treasury.
The term "Debt," as used above, means any outstanding debt for money
borrowed evidenced by notes, debentures, bonds, or other securities.
The term "Net Tangible Assets"Assets," as defined in the Indentureused above, means the amount shown
as total assets on theour consolidated balance sheet, of the Company, less the following: (i)
intangible assets including, but without limitation, such items as goodwill,
trademarks, trade names, patents, and unamortized debt discount and expense and
8
other regulatory assets carried as an asset on the
Company'sour consolidated balance sheet;
and (ii) appropriate adjustments, if any, on account of minority interests.
Net Tangible Assets shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged and that are
approved by the independent accountants regularly retained by the Company, and
may be determined as of a date not more than sixty (60) days prior to the
happening of the event for which such determination is being made.
The term "Operating Property"Property," as defined in the Indentureused above, means (i) any interest in
real property owned by the Companyus and (ii) any asset owned by the
Companyus that is depreciable in
accordance with generally accepted accounting principles.
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18
The term "Original Issue Discount SUN" as defined in the Indenture
means any SUN which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the Maturity
thereof.
The term "Outstanding" as defined in the Indenture when used with
respect to SUNs, means, as of the date of determination, all SUNs theretofore
authenticated and delivered under the Indenture, except: (i) SUNs theretofore
cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) SUNs
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such SUNs;
provided that, if such SUNs are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture or provision therefor satisfactory to
the Trustee has been made; (iii) SUNs as to which Defeasance has been effected
pursuant to Section 13.02 of the Indenture; and (iv) SUNs which have been paid
pursuant to Section 3.06 of the Indenture or in exchange for or in lieu of which
other SUNs have been authenticated and delivered pursuant to the Indenture,
other than any such SUNs in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such SUNs are held by a bona fide
purchaser in whose hands such SUNs are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the SUNs Outstanding under the Indenture, or the
Outstanding SUNs of any series or Tranche, have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action under the Indenture as of any date or whether or not a quorum is present
at a meeting of Holders, (A) the principal amount of an Original Issue Discount
SUN (as defined herein) which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such date
upon acceleration of the Maturity thereof to such date pursuant to Section 5.02
of the Indenture, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a SUN is not determinable, the principal amount of such SUN
which shall be deemed to be Outstanding shall be the amount as specified or
determined as contemplated by Section 3.01 of the Indenture, (C) the principal
amount of a SUN denominated in one or more foreign currencies or currency units
which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by Section
3.01 of the Indenture, of the principal amount of such SUN (or, in the case of a
SUN described in clause (A) or (B) above, of the amount determined as provided
in such clause), and (D) SUNs owned by the Company or any other obligor upon the
SUNs or any Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all SUNs Outstanding under the
Indenture, or all Outstanding SUNs of each such series and each such Tranche, as
the case may be, determined without regard to this clause (D)) shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action, or
upon such determination as to the presence of a quorum, only SUNs which the
Trustee actually knows to be so owned shall be so disregarded. SUNs so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such SUNs and that the pledgee is not the Company or any
other obligor upon the SUNs or any Affiliate of the Company or of such other
obligor.
The term "Sale and Lease-Back Transaction"Transaction," as defined in the Indentureused above, means any
arrangement with any Personentity providing for the leasing to the Companyus of any Operating
Property (except for temporary leases for a term, including any renewal thereof,
of not more than forty-eight (48) months), which Operating Property has been or
is to be sold or transferred by the Companyus to such person;entity; provided, however, Sale and
Lease-backLease-Back Transaction shall not include any arrangement (i) first entered into
prior to the date of the Indenture and (ii) involving the exchange of any
Operating Property for any property subject to an arrangement specified in the
preceding clause (i).
The term "Value," as used above, means, with respect to a Sale and
Lease-Back Transaction, as of any particular time, the amount equal to the
greater of (1) the net proceeds to us from the sale or transfer of the property
leased pursuant to such Sale and Lease-Back Transaction or (2) the net book
value of such property, as determined in accordance with generally accepted
accounting principles by us at the time of entering into such Sale and
Lease-Back Transaction, in either case multiplied by a fraction, the numerator
of which shall be equal to the number of full years of the term of the lease
that is part of such Sale and Lease-Back Transaction remaining at the time of
determination and the denominator of which shall be equal to the number of full
years of such term, without regard, in any case, to any renewal or extension
options contained in such lease.
RESTRICTIONS ON MERGERS AND SALE OF ASSETS
Under the terms of the Indenture, we may not consolidate with or merge
into any other entity or convey, transfer or lease our properties and assets
substantially as an entirety to any entity, unless:
- - the surviving or successor entity is organized and validly existing
under the laws of any domestic jurisdiction and it expressly assumes
our obligations on all SUNs and under the Indenture;
- - immediately after giving effect to the transaction, no event of default
and no event which, after notice or lapse of time or both, would become
an event of default shall have occurred and be continuing; and
- - we deliver to the Trustee, an officer's certificate and an opinion of
counsel as to compliance with the foregoing.
(See Section 8.01)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that we may be:
- - discharged from our obligations, with certain limited exceptions, with
respect to any series of SUNs, as described in the Indenture, such a
discharge being called a "defeasance" in this prospectus; and
- - released from our obligations under certain restrictive covenants
especially established with respect to any series of SUNs, including
the covenants described under "Restrictions on Liens" and
9
"Restrictions on Sale-Leaseback Transactions" as described in the
Indenture, such a release being called a "covenant defeasance" in this
prospectus. (See Sections 13.02 and 13.03)
We must satisfy certain conditions to effect a defeasance or covenant
defeasance. Those conditions include the irrevocable deposit with the Trustee,
in trust, of money or government obligations which through their scheduled
payments of principal and interest would provide sufficient money to pay the
principal and any premium and interest on those SUNs on the maturity dates of
those payments or upon redemption. (See Section 13.04)
Under current United States federal income tax laws, a defeasance would
be treated as an exchange of the relevant SUNs in which holders of those SUNs
might recognize gain or loss. In addition, the amount, timing and character of
amounts that holders would thereafter be required to include in income might be
different from that which would be includible in the absence of that defeasance.
We urge investors to consult their own tax advisors as to the specific
consequences of a defeasance, including the applicability and effect of tax laws
other than United States federal income tax laws. (See Section 13.04)
Under current United States federal income tax law, unless accompanied
by other changes in the terms of the SUNs, a covenant defeasance should not be
treated as a taxable exchange.
MODIFICATION OF THE INDENTURE
We and the Trustee may enter into one or more supplemental indentures
without the consent of any holder of the SUNs for any of the following purposes:
- - to evidence the assumption by any permitted successor of our covenants
in the Indenture and in the SUNs;
- - to add to our existing covenants or to surrender any of our rights or
powers under the Indenture;
- - to add additional events of default;
- - to change, eliminate, or add any provision to the Indenture; provided,
however, if the change, elimination, or addition will adversely affect
the interests of the holders of the SUNs of any series in any material
respect, that change, elimination, or addition will become effective
only:
- when the consent of the holders of a majority in
aggregate principal amount of the SUNs of that series
has been obtained in accordance with the Indenture;
or
- when no SUNs of the affected series remain
outstanding under the Indenture;
- - to secure the SUNs;
- - to establish the form or terms of the SUNs of any other series as
permitted by the Indenture;
- - to evidence and provide for the acceptance of appointment of a
successor trustee;
- - to provide for or facilitate the administration of the trusts by more
than one Trustee;
- - to cure any ambiguity or inconsistency or to make any other provisions
with respect to matters and questions arising under the Indenture;
provided that the action does not adversely affect the interests of the
holders of the SUNs of any series in any material respect.
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(See Section 9.01)
If the Trust Indenture Act of 1939 is amended after the date of the
Indenture to require changes to the Indenture, the Indenture will be deemed to
be amended so as to conform to that amendment of the Trust Indenture Act of
1939. We and the Trustee may, without the consent of any of the holders, enter
into one or more supplemental indentures to evidence that amendment. (See
Section 9.01)
The consent of the holders of a majority in aggregate principal amount
of the SUNs of all series then outstanding, considered as one class, is required
for all other modifications to the Indenture. However, if less than all of the
series of SUNs outstanding are directly affected by a proposed supplemental
indenture, then only the consent of the holders of a majority in aggregate
principal amount of the outstanding SUNs of all series that are directly
affected will be required. No amendment or modification may:
- - change the stated maturity of the principal of, or any installment of
principal of or interest on, any SUN, or reduce the principal amount of
any SUN or its rate of interest or change the method of calculating the
interest rate or reduce any premium payable upon redemption, or change
the currency in which payments are made, or impair the right to
institute suit for the enforcement of any payment on or after the
stated maturity of any SUN, without the consent of the holder;
- - reduce the percentage in principal amount of the outstanding SUNs of
any series which consent is required for any supplemental indenture or
any waiver of compliance with a provision of the Indenture or any
default thereunder and its consequences, or reduce the requirements for
quorum or voting, without the consent of all the holders of the series;
or
- - modify certain provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults
with respect to the SUNs of any series, without the consent of the
holder of each outstanding SUN affected thereby.
(See Section 9.02)
A supplemental indenture which changes the Indenture solely for the
benefit of one or more particular series of SUNs, or modifies the rights of the
holders of the SUNs of one or more series, will not affect the rights under the
Indenture of the holders of the SUNs of any other series. (See Section 9.02)
The Indenture provides that the SUNs owned by us or anyone else
required to make payment on the SUNs will be disregarded and considered not to
be outstanding in determining whether the required holders have given a request
or consent. (See Section 1.01)
We may fix in advance a record date to determine the required number of
holders entitled to give any request, demand, authorization, direction, notice,
consent, waiver or other such act of the holders, in certain situations. If the
record date is fixed, the holders of the outstanding SUNs of the relevant series
on that record date, and no other holders, will be entitled to take or revoke
the relevant action, whether or not those holders remain holders after that
record date. No action, however, will be effective unless taken on or prior to
the applicable expiration date by holders of the requisite principal amount of
the outstanding SUNs of that series on that record date. Any request, demand,
authorization, direction, notice, consent, election, waiver or other act of a
holder will bind every future holder of the same SUNs and the holder of every
SUN issued upon the registration of transfer of or in exchange of those SUNs. A
transferee will be bound by our acts or those of the Trustee taken in reliance
thereon, whether or not notation of that action is made upon that SUN. (See
Section 1.04)
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EVENTS OF DEFAULT
"Event of default" when used in the Indenture with respect to any
series of SUNs, means any of the following:
- - failure to pay interest on any SUN of the applicable series for 60 days
after it is due;
- - failure to pay the principal of or premium on any SUN of the applicable
series when due (whether at maturity or upon earlier redemption);
- - failure to pay the deposit of any sinking fund payment, when and as due
by the terms of the applicable series;
- - failure to perform any other covenant in the Indenture, other than a
covenant that does not relate to that series of SUNs, that continues
for 90 days after we receive written notice from the Trustee, or we and
the Trustee receive a written notice from the holders of a majority in
principal amount of the SUNs of such series; however, the Trustee or
the Trustee and such holders can agree to an extension of the 90-day
period and this extension will be automatic if we are diligently
pursuing action to correct the default;
- - certain events in bankruptcy, insolvency or reorganization of PNM; or
- - any other event of default provided with respect to the SUNs of that
series.
(See Section 5.01).
REMEDIES
Acceleration of Maturity
If an event of default with respect to any one series of SUNs occurs
and continues, either the Trustee or the holders of a majority in principal
amount of the outstanding SUNs of that series may declare the principal amount
of all the SUNs of that series to be due and payable immediately. However, if
the event of default is applicable to more than one series of SUNs, the Trustee
or the holders of a majority in principal amount of all the outstanding SUNs of
all series, considered as one class, and not the holders of any one series, may
make a declaration of acceleration. (See Section 5.02)
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the event of default giving rise to the declaration of acceleration
will be considered waived, and the declaration and its consequences will be
considered rescinded and annulled, if:
- - we have paid or deposited with the Trustee a sum sufficient to pay:
- all overdue interest on all the SUNs of the series;
- the principal of and premium, if any, on any SUNs of
the series which have otherwise become due and
interest, if any, that is currently due;
- interest, if any, on overdue interest (to the extent
lawful); and
- all amounts due to the Trustee under the Indenture;
and
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- - any other event of default with respect to the SUNs of that series has
been cured or waived as provided in the Indenture.
(See Section 5.02)
The holders of a majority in principal amount of the outstanding SUNs
of any series may on behalf of the holders of all the SUNs of that series waive
any past default under the Indenture with respect to that series and its
consequences, except a default (i) in the payment of the principal of or any
premium or interest on any SUN of that series, or (ii) in respect of a covenant
or provision of the Indenture which cannot be modified or amended without the
consent of the holder of each outstanding SUN of the series affected. However,
if a default occurs and continues with respect to more than one series of SUNs,
the holders of a majority in aggregate principal amount of the outstanding SUNs
of all such series, considered as one class, has the right to waive the default,
and not the holders of the SUNs of any one such series. Upon any waiver, the
default ceases to exist, and any and all events of default arising therefrom is
deemed to have been cured, for every purpose of the Indenture; but no waiver
will extend to any subsequent or other default or impair any right consequent
thereon. (See Section 5.13)
Right to Direct Proceedings
If an event of default with respect to any series of SUNs occurs and
continues, the holders of a majority in principal amount of the outstanding SUNs
of that series have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the SUNs of that series.
However, if an event of default occurs and continues with respect to more than
one series of SUNs, the holders of a majority in aggregate principal amount of
the outstanding SUNs of all such series, considered as one class, have the right
to make the direction, and not the holders of the SUNs of any one of such series
and that (i) such direction will not be in conflict with any rule of law or with
the Indenture; (ii) the Trustee may take any other action deemed proper by the
Trustee and not inconsistent with direction, and (iii) subject to the provisions
of the Indenture the Trustee will have the right to decline to follow any
direction if the Trustee in good faith determines that the proceeding so
directed would involve the Trustee in personal liability. (See Section 5.12)
Limitation on Right to Institute Proceedings
No holder of SUNs of any series will have any right to institute any
proceeding, judicial or otherwise, with respect to the Indenture, or for the
appointment of a receiver or trustee, or for any other remedy under the
Indenture, unless:
- - the holder has previously given to the Trustee written notice of a
continuing event of default;
- - the holders of a majority in aggregate principal amount of the
outstanding SUNs of all series in respect of which an event of default
has occurred and is continuing, considered as one class, have made a
written request to the Trustee, and have offered reasonable indemnity
to the Trustee to institute proceedings; and
- - the Trustee has failed to institute any proceeding for 60 days after
notice and has not received any direction inconsistent with the written
request of the holders during that period.
(See Section 5.07)
No Impairment of Right to Receive Payment
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The limitations on the right to institute proceedings, however, do not
apply to a suit by a holder of a SUN for payment of the principal of or premium,
if any, or interest if any, on that SUN on or after the applicable due date.
(See Section 5.08)
Annual Notice to Trustee
We will provide to the Trustee an annual statement by an appropriate
officer as to whether we are in default in the performance and observance of any
of the terms, provisions and conditions of the Indenture. (See Section 10.04)
NOTICES
Notices to holders of the SUNs will be given by mail to the holders at
the addresses that appear in the security register. (See Section 1.06)
TITLE
We, the Trustee, and any of our agents or the agents of the Trustee,
may treat the person in whose name the SUNs are registered as the absolute owner
thereof, whether or not such SUNs may be overdue, for the purpose of making
payments and for all other purposes irrespective of notice to the contrary. (See
Section 3.08)
GOVERNING LAW
The Indenture and the SUNs are governed by, and construed in accordance
with, the laws of the State of New York. (See Section 1.12)
REGARDING THE TRUSTEE
The Trustee is JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank. In addition to acting as Trustee, JPMorgan Chase Bank acts, and
may act, as trustee under our and our affiliates' other various indentures and
trusts. JPMorgan Chase Bank also participates in our revolving credit facility
and affiliates of JPMorgan Chase Bank are lessors with respect to three of our
leases relating to the sale and leaseback of portions of Unit 1 and Unit 2 of
the Palo Verde Nuclear Generating Station.
The Trustee may resign at any time by giving us written notice or be
removed at any time by an act of the holders of a majority in principal amount
of any series of SUNs then outstanding delivered to the Trustee and PNM. In
addition, provided that no event of default has occurred or is continuing, we
may appoint a new trustee upon delivering to the Trustee, a resolution of our
board of directors appointing a successor trustee and the successor's acceptance
of our appointment. In this case, the Trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the Indenture. In any event, the resignation or removal of the Trustee, and
no appointment of a successor trustee, will be effective until the acceptance of
appointment by a successor trustee. (See Section 6.10)
The Trustee will perform only those duties that are specifically set
forth in the Indenture unless an event of default under the Indenture occurs and
continues. In case an event of default occurs and continues, the Trustee will
exercise the same degree of care and skill as a prudent individual would
exercise in the conduct of his or her own affairs. (See Section 6.01)
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DESCRIPTION OF PREFERRED STOCK
The following descriptions of our capital stock and the relevant
provisions of our Restated Articles of Incorporation and By-Laws are summaries
and are qualified by reference to our Restated Articles of Incorporation and
By-Laws which have been previously filed with the SEC and are exhibits to the
registration statement of which this prospectus is a part. The following also
summarizes certain applicable provisions of the New Mexico Business Corporation
Act and the New Mexico Public Utility Act and those summaries are qualified by
reference to those Acts.
OUR CAPITAL STOCK, GENERALLY
Our authorized capital stock consists of 10,000,000 shares of preferred
stock, without par value, issuable in series from time to time, and 40,000,000
shares of common stock, without par value. As of May 31, 2003, our only series
of outstanding preferred stock is our Cumulative Preferred Stock, 1965 Series,
4.58%, of which 128,000 shares are outstanding. All of our common stock is
currently held by PNM Resources.
PREFERRED STOCK
Our board of directors is authorized by resolution to provide from time
to time for the issuance of shares of preferred stock in series and to fix, from
time to time before issuance, the designation, preferences, privileges and
voting powers of the shares of each series of preferred stock and its
restrictions or qualifications, limited to the following:
- - the serial designation, authorized number of shares and the stated
value;
- - the dividend rate, if any, the date or dates on which the dividends
will be payable, and the extent to which the dividends may be
cumulative;
- - the price or prices at which shares may be redeemed, and any terms,
conditions and limitations upon any redemption;
- - the amount or amounts to be received by the holders in the event of
dissolution, liquidation, or winding up of our assets;
- - any sinking find provisions for redemption or purchase of shares of any
series;
- - the terms and conditions, if any, on which shares may be converted
into, or exchanged for, shares of other series of preferred stock of
the corporation, but may not be converted into, or exchanged for,
shares of our common stock;
- - the voting rights, if any, for the shares of each series, limited to
circumstances when:
- we fail to pay dividends on the applicable series; and
- when a proposed amendment to our Restated Articles of
Incorporation would have an adverse impact on the rights and
privileges of our preferred stockholders.
The holders of our preferred stock do not have a preemptive right to
acquire authorized but unissued shares, securities convertible into shares or
carrying a right to subscribe to or acquire shares, except under the terms and
conditions as may be provided by our board of directors.
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A prospectus supplement will describe the terms of any preferred stock
being offered, including whether the preferred stock will be listed on any
securities exchange.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements made in this prospectus and other documents we file with the
SEC that relate to future events or our expectations, projections, estimates,
intentions, goals, targets and strategies are made pursuant to the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based upon current expectations and estimates and we assume no obligation to
update this information. Because actual results may differ materially from those
expressed or implied by the forward-looking statements, we caution investors not
to place undue reliance on these statements. Factors that could cause actual
results to differ, and that will affect our future financial condition, cash
flow and operating results include interest rates, weather, fuel costs, changes
in supply and demand in the market for electric power, wholesale power prices,
market liquidity, the competitive environment in the electric and natural gas
industries, the performance of generating units and transmission system, state
and federal regulatory and legislative decisions and actions, the outcome of
legal proceedings and the performance of state, regional and national economies.
For a detailed discussion of the important factors that affect us and that could
cause actual results to differ from those expressed or implied by our
forward-looking statements, please see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our current and future Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, and also our current
and future Current Reports on Form 8-K, filed with the SEC.
PLAN OF DISTRIBUTION
GENERAL
The CompanyWe may sell the SUNs beingsecurities offered hereby: (i)pursuant to this prospectus in one
or more series in any of three ways: (1) through underwriters or dealers; (2)
through agents; or (3) directly to purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters;a limited number of purchasers or (v) throughto a combination of any such methods of sale.
17
19
The distribution ofsingle
purchaser.
THROUGH UNDERWRITERS OR DEALERS
If underwriters are used in the SUNssale, the offered securities will be
acquired by the underwriters for their own account and may be effectedresold from time
to time in one or more transactions, either: (i)including negotiated transactions, at a fixedthe
initial public offering price or at varying prices which may be
changed; (ii) at market prices prevailingdetermined at the time of sale; (iii) at prices
relatedthe
sale. The offered securities may be offered to such prevailing market prices;the public either through
underwriting syndicates represented by one or (iv) at negotiated prices.
Offersmore managing underwriters or
directly by one or more managing underwriters. The underwriter or underwriters
with respect to offered securities will be named in the prospectus supplement
relating to the offering and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover page of the
prospectus supplement. Unless otherwise set forth in the prospectus supplement,
the obligations of the underwriters to purchase the SUNsoffered securities will be
subject to some conditions precedent, and the underwriters will be obligated to
purchase all of the offered securities if any are purchased.
THROUGH AGENTS
Offered securities may be solicited directly by the Company.
Offers to purchase SUNs may also be solicited bysold through agents designated by the
Companyus from
time to time. Any suchA prospectus supplement will set forth the name of any agent who may be deemed to be an
"underwriter" as that term is defined in the Securities Act,
involved in the offer or sale of the SUNs in respect ofoffered securities for which this Prospectusthe prospectus
supplement is delivered will
be named, andas well as any commissions payable bythat we will pay to that
agent. Unless otherwise indicated in the Company to suchprospectus supplement, that agent will
be acting on a reasonable best efforts basis for the period of its appointment.
16
DIRECTLY
We may sell the offered securities directly to one or more purchasers.
In this case, no underwriters or agents would be involved.
GENERAL INFORMATION
The prospectus supplement with respect to the offered securities will
set forth the terms of the offering of the offered securities, including:
- - the name or names of any underwriters, dealers or agents;
- - the purchase price of the offered securities and the proceeds to us
from their sale;
- - any underwriting discounts, agents' commissions and other items
constituting underwriting compensation;
- - any initial public offering price; and
- - any discounts or concessions allowed or reallowed or paid to dealers.
Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If so indicated in the prospectus supplement with respect to the
offered securities, we may authorize agents, underwriters or dealers to solicit
offers by certain specified institutions to purchase the offered securities from
us at the initial public offering price set forth in the applicable Prospectus Supplement.
Ifprospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
dealer is utilizedspecified date in the sale of the SUNs in respect of which
this Prospectus is delivered, the Companyfuture. These contracts will sell such SUNsbe subject to the dealer, as
principal. The dealer, who may be deemed to be an "underwriter" as that term is
defined in the Securities Act, may then resell such SUNs to the public at
varying prices to be determined by such dealer at the time of resale.
If an underwriter or underwriters are utilized in the sales of the
SUNs, the Company will execute an underwriting agreement with such underwriters
at the time of such sale and the name of the underwriters will beconditions
set forth in the applicable Prospectus Supplement,prospectus supplement, which will be used byalso set forth the underwriters to
make resalescommission
payable for solicitation of the SUNs in respect of which this Prospectus is delivered to the
public. In connection with the sale of SUNs, suchcontracts.
Agents, underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
SUNs for whom they may act as agents. Underwriters may also sell SUNs to or
through dealers and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Any underwriting
compensation paid by the Company to underwriters in connection with the offering
and sale of SUNs, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled under agreements
that may be entered into with the Company,us to indemnification by the
Companyus against certain civil liabilities,
including certain liabilities under the Securities Act. UnderwritersAct of 1933, or to
contribution by us with respect to payments which those agents, underwriters and
agentsdealers may engagebe required to make in transactions with, or
perform servicesrespect thereof.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from the Company's Current Report on Form 8-K dated June 12, 2003
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports, which are incorporated herein by reference (which reports express
an unqualified opinion and include explanatory paragraphs referring to the
realignment of segments for financial reporting purposes and its adoption of
EITF 02-3, Issues Involved in Accounting for Derivative Contracts Held for
Trading Purposes and Contracts Involved in Energy Trading and Risk Management
Activities).
The financial statement schedules of the Company incorporated by
reference in this prospectus from the Company's Annual Report on Form 10-K (as
updated by the Company's Current Report on Form 8-K dated June 12, 2003) have
been audited by Deloitte & Touche, LLP, independent auditors, as stated in their
report which is incorporated herein by reference.
The aforementioned reports have been so incorporated and included in
reliance upon such firm given their authority as experts in accounting and
auditing.
With respect to the unaudited interim financial information for the
Companyperiods ended March 31, 2003 and 2002, which is incorporated herein by
reference, Deloitte & Touche LLP have applied limited procedures in accordance
with professional standards for a review of such information. However, as
stated in their
17
reports included in the ordinary courseCompany's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2003 and incorporated by reference herein, they did not audit
and they do not express an opinion on that interim financial information (which
review report includes an explanatory paragraph related to the Company's
adoption of business.
LEGAL OPINIONSStatement of Financial Accounting Standards No. 143, Accounting for
Asset Retirement Obligations). Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Securities
Act.
VALIDITY
The validity of the SUNs offered herebysecurities will be passed upon for the
Companyus by
Keleher & McLeod, P.A., Albuquerque, New Mexico, and, it is currently
anticipated, for any underwriters,
of SUNsdealers or agents by Pillsbury Winthrop Stimson, Putnam &
Roberts,LLP, New York, New York. In giving their
opinions, Winthrop, Stimson, Putnam
& Roberts and Keleher & McLeod, P.A. may rely as to all matters of ArizonaNew York law upon
the opinion of Snell & Wilmer L.L.P., Phoenix, Arizona.Pillsbury Winthrop Stimson,
Putnam & RobertsLLP and Pillsbury Winthrop LLP may rely as to
all matters of New Mexico law upon the opinion of Keleher & McLeod, P.A., and Keleher & McLeod, PA. may relay as to all matters
of New York law upon the opinion of
Pillsbury Winthrop Stimson, Putnam & Roberts.
Winthrop, Stimson, Putnam & RobertsLLP has rendered, and may in the future render, legal
services to the Company.
EXPERTS
The consolidated financial statements of the Company at December 31,
1997us and 1996, and for each of the three years in the period ended December 31,
1997, appearing in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.our affiliates.
18
20
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the expenses the Registrant expects to pay
in connection with the issuance and distribution of the SUNs registered hereby:
ESTIMATED
AMOUNT
CATEGORY OF EXPENSE OF EXPENSE
- ------------------- ----------
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC Filing Fees.......................................... $ 23,057
Printing and Registration Fees......................................................... $ 191,750Engraving Expenses*......................... 5,000
Accounting Fees and Expenses*............................ 15,000
Legal Fees and Expenses*............................................................. 200,000
Cost of Printing*.................................................................... 40,000
Accounting................................. 100,000
Fees and Expenses*........................................................ 40,000Expenses of Trustee*............................ 2,000
Transfer Agent and Registrar Fees*....................... 10,000
Rating Agency Fees................................................................... 150,000
Blue Sky Fees andFees*...................................... 40,000
Miscellaneous*........................................... 2,943
--------
Total Expenses*.......................................................... 3,000
NASD Filing Fee...................................................................... 65,500
Miscellaneous Expenses*.............................................................. 20,000
-----------
*Total...................................................................... $ 710,250
===========................................... $198,000
========
- --------------------------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 87 of Article II of the Company's By-LawsPublic Service Company of New
Mexico's Bylaws contains the following provisionprovisions with respect to
indemnification of directors and officers:
Each person who shall have servedserving as a director or an officer of the
Company,Corporation, or, at the request of the Company,Corporation, as a
director or an officer of any other corporation, partnership or joint venture, whether profit
or nonprofit,company in which the
Company (a) owns shares of capital stock,
(b)Corporation has an ownershipa financial interest (c) is a member, or (d) is a creditor, and regardless of whether
or not suchthe person is then in office, and the heirs, executors,
administrators and personal representatives of any
suchthe person,
shall be indemnified by the CompanyCorporation to the full extent of
the authority of the CompanyCorporation to so indemnify as authorized
by the law
of New Mexico.Mexico law.
Section 53-11-4.1 of the Business Corporation Act of the State
of New Mexico provides that a corporation shall have power to indemnify any
person made (or threatened to be made) a party to any proceeding (whether
threatened, pending or completed) by reason of the fact that the person is or
was a director (or, while a director, is or was serving in any of certain other
capacities) if: (1) the person acted in good faith; (2) the person reasonably
believed: (a) in the case of conduct in the person's official capacity with the
corporation, that the person's conduct was in its best interests; and (b) in all
other cases, that the person's conduct was at least not opposed to its best
interests; and (3) in the case of any criminal proceeding, the person had no
reasonable cause to believe the person's conduct was unlawful. Indemnification
may be made against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by the person in connection with the proceeding, but
may be limited or unavailable with respect to certain proceedings. In some
instances, indemnification of a director may be mandatory or, upon the
application of a director, may be ordered by a court. Reasonable expenses
incurred by a director may, under certain circumstances, be paid or reimbursed
in advance of a final disposition of a proceeding. Unless limited by its
articles of incorporation, a corporation may (or, as the case may be, shall)
indemnify and advance expenses to an officer of the corporation to the same
extent as to a director under Section 53-11-4.1. Also, unless limited by its
articles of incorporation, a corporation has (1) the power to indemnify and to
advance expenses to an employee or agent of the corporation to the same extent
that it may indemnify and advance expenses to directors under the statute and
(2) additional power to indemnify and
to
II-1
21to advance reasonable expenses to an officer, employee or agent who is not a
director to such further extent, consistent with law, as may be provided by its
articles of incorporation, bylaws, general or specific action of its boardBoard of
directors,Directors, or contract.
Section 53-11-4.1 was amended in 1987 to provide that the
indemnification authorized thereunder shall not be deemed exclusive of any
rights to which those seeking indemnification may be entitled under the articles
of incorporation, the by-laws, an agreement, a resolution of shareholders or
directors or otherwise. At the Company's 1987 Annual Meeting of Stockholders,
the stockholders approved certain agreements with the Company's directors and
officers relating to indemnification of directors and officers. Such agreements
have beenPNM has entered into agreements with each director and
officer. The agreementsofficer which provide for indemnification of directors and officers to the
fullest extent permitted by law including advancement of litigation expenses
where appropriate. The agreements provide for the appointment of a reviewing
party by the Board of Directors to make a determination whether claimed
indemnification is permitted under applicable law.
Insurance is maintained on a regular basis (and not
specifically in connection with this offering) against liabilities arising on
the part of directors and officers out of their performance in such capacities
or arising on the part of the CompanyPNM out of its foregoing indemnification provisions,
subject to certain exclusions and to the policy limits.
II-2
ITEM 16. EXHIBITS.
See Exhibit Index.
Exhibit No. Description of Exhibit
- ----------- ----------------------
1.1** Form of Underwriting Agreement for Senior Unsecured Notes.
1.2** Form of Underwriting Agreement for Preferred Stock.
3.1* Restated Certificate of Incorporation of Public Service Company of New Mexico dated May 31, 2002
(Exhibit 3.1.1 to PNM Resources, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June
30, 2002 in File No. 1-6986).
3.2* Bylaws of Public Service Company of New Mexico as adopted and amended May 31, 2002 (Exhibit
3.1.2 to Public Service Company of New Mexico's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2002 in File No. 1-6986).
4.1 Indenture for Senior Notes, dated as of August 1, 1998, between Public Service Company of New
Mexico and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank.
4.2** Form of Supplemental Indenture establishing Senior Unsecured Notes (with form of note attached).
5.1 Opinion of Keleher & McLeod, P.A., counsel for Public Service Company of New Mexico.
5.2 Opinion of Pillsbury Winthrop LLP.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
12.2 Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
15 Letters regarding unaudited interim financial information.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Keleher & McLeod, P.A. (included in Exhibit 5.1).
23.3 Consent of Pillsbury Winthrop LLP (included in Exhibit 5.2).
24 Power of Attorney is contained on the signature page of this registration statement.
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank,
to act as Trustee for the Senior Unsecured Notes.
- ------------------
*Incorporated herein by reference as indicated.
**To be filed by an amendment or pursuant to a report to be filed pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, if applicable.
ITEM 17. 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: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 Statementregistration
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; provided, however, thatregistration statement;
notwithstanding the foregoing,
II-3
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 CommissionSEC pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20%20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective Registration Statement;registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statementregistration statement or any material change to
such information in the Registration Statement;
Provided,registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if 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 CommissionSEC 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.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.
II-2
22
(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 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)(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.
(4) 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 that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities
offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(b) 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 CommissionSEC such indemnification is against public policy as
expressed in the Securities Act of 1933 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 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 Securities Act of 1933, and will be governed
by the final adjudication of such issue.
II-3II-4
23
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORMPursuant to the requirements of the Securities Act, 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 ALBUQUERQUE, STATE OF NEW MEXICO, ON THIS MAY 21,
1998.and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Albuquerque, State of New Mexico, on June 12, 2003.
PUBLIC SERVICE COMPANY OF NEW
MEXICO
By: /s/ B. F. Montoya
-------------------------------------
B. F. MontoyaJeffry E. Sterba
-------------------------------
Jeffry E. Sterba
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH OFFICER OR DIRECTOR OF PUBLIC
SERVICE COMPANY OF NEW MEXICO WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND
APPOINTS B. F. MONTOYA AND M. H. MAERKI EACH OF THEM SINGLY, HIS OR HER TRUE AND
LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL AND SEVERAL POWER OF SUBSTITUTION,
FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS,
AND SUPPLEMENTS TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEY-IN-FACT AND
AGENT FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL
INTENTS AND PURPOSES AS THEY OR HE OR SHE MIGHT OR COULD DO IN PERSON, HEREBY
RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEY-IN-FACT AND AGENT OR HIS OR HER
OR THEIR SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE THEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OFthat each person whose
signature appears below, hereby constitutes and appoints Jeffry E. Sterba, John
R. Loyack and Robin Lumney, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments to this registration
statement, including post-effective amendments, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and conforming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.this registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ B. F. Montoya Principal Executive Officer May 21, 1998
- -------------------------------------- and Director
B. F. MontoyaJeffry E. Sterba Chairman, President and Chief June 12, 2003
Jeffry E. Sterba Executive OfficerOfficer; Director
(Principal Executive Officer)
/s/ M. H. Maerki Principal Financial Officer May 21, 1998
- --------------------------------------
M. H. MaerkiJohn R. Loyack Senior Vice President and Chief June 12, 2003
John R. Loyack Financial OfficerOfficer; Director
(Principal Financial Officer)
/s/ D. M. Burnett Principal Accounting Officer May 21, 1998
- ------------------------------------- and Controller
D. M. Burnett
CorporateRobin Lumney Vice President, Controller and Chief Accounting OfficerJune 12, 2003
II-4II-5
24
Signature Title Date
--------- ----- ----
Robin Lumney Chief Accounting Officer
(Principal Accounting Officer)
/s/ Alice A. Cobb Director June 12, 2003
Alice A. Cobb
/s/ Roger J. T. Ackerman Chairman of the Board May 21, 1998
- --------------------------------------Flynn Director June 12, 2003
Roger J. T. AckermanFlynn
/s/ R. G. ArmstrongMax H. Maerki Director May 21, 1998
- --------------------------------------
R. G. ArmstrongJune 12, 2003
Max H. Maerki
/s/ J. A. Godwin Director May 21, 1998
- --------------------------------------
J. A. Godwin
/s/ L. H. Latterman Director May 21, 1998
- --------------------------------------
L. H. Lattman
/s/ M. LujanEdward Padilla Jr. Director May 21, 1998
- --------------------------------------
M. LujanJune 12, 2003
Edward Padilla Jr.
/s/ R. U. OrtizWilliam Real Director May 21, 1998
- --------------------------------------
R. U. Ortiz
/s/ R. M. Price Director May 21, 1998
- --------------------------------------
R. M. Price
/s/ P. F. Roth Director May 21, 1998
- --------------------------------------
P. F. RothJune 12, 2003
William Real
II-5II-6
25
FORM S-3
PUBLIC SERVICE COMPANY OF NEW MEXICO
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Pagesof Exhibits
- ------ ----------- ------------ -----------------------
1 Form of Underwriting Agreement*
3.1 Restated Articles of Incorporation of the Company, as amended through
May 10, 1985 (incorporated by reference to Exhibit 4-(b) to the
Company's Registration Statement, File No. 2-99990)
3.2 By-Laws of the Company With All Amendments to and including December
5, 1994 (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K4.1 Indenture for the year ended December 31, 1994, File
No. 1-6986)
4.1 Form of Indenture,Senior Notes, dated as of July __,August 1, 1998, between thePublic Service Company of New
Mexico and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as Trustee
4.2 Form of SUN Security (included in Exhibit 4.1 above)
4.3 Form(s) of Supplemental Indenture Relating to SUNs*
5Bank.
5.1 Opinion of Keleher & McLeod, P.A.
12 Statements, counsel for Public Service Company of New Mexico.
5.2 Opinion of Pillsbury Winthrop LLP.
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
12.2 Statement Regarding Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
15 Letter From Arthur Andersen LLP Regarding Unaudited Interim
Financial InformationLetters regarding unaudited interim financial information.
23.1 Consent of Arthur Andersen LLPDeloitte & Touche LLP.
23.2 Consent of Keleher & McLeod, P.A. (included in Exhibit 5 above)5.1).
23.3 Consent of Pillsbury Winthrop LLP (included in Exhibit 5.2).
24 Power of Attorney (seeis contained on the signature page II-4)of this registration statement.
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of TheJPMorgan Chase Manhattan Bank,
to act as Trustee undertrustee for the Indenture between the
Company and The Chase Manhattan Bank, on Form T-1Senior Unsecured Notes.
* To be filed as an Exhibit by means of Form 8-K.
II-6